With advancing demands of consumers and the steady growth of e-commerce, shippers and carriers are working to build better relationships and optimize operations. Unfortunately, the modern supply chain remains brittle, subject to the slightest of changes that could spell its doom. While that paints a dire picture, supply chain leaders have another option; they can turn to tactical freight management and develop responsive, adaptive processes. Of course, tactical freight management is difficult at best, so let’s take a closer look at its challenges and opportunities.
What Companies Get Wrong About Freight Management
Supply chain enterprises fall victim to many fallacies in managing freight, says Steve Banker of Forbes. They assume a few small changes will bring lasting, positive results. As history teaches, change can be useful, but failure to understand and manage change effectively will lead to disaster. This is a fundamental principle of war, realized after the desolation of World War II. It is not enough to simply address today’s concerns. Shippers and logistics service providers need to be forward-looking, making changes that have a continuing benefit. This is tactical freight management—improvements that continue to drive business success.
How to Evaluate, Select & Build the Case for A TMS
Tactical Freight Management Applies Data and Insights to Boost Supply Chain Responsiveness and Efficiency
Tactical freight management also applies to much more than just processes. Shippers and carriers should leverage data and work to boost supply chain efficiency. Similarly, supply chain resiliency plays a role in enabling tactical freight management. Since shippers turn to technology, it makes sense that others within the supply chain would follow in kind. With time, every corporation implements tactical values, working to reduce costs, even when those costs may have originally derived from a company’s billing errors.
How to Enable Tactical Management in Your Supply Chain
The path to enabling tactical management is not always clear, but it does follow similar traits in improving supply chain operations. These include:
- Benchmark your operations.
- Automate any repetitive process.
- Integrate your supply chain management systems.
- Diversify your carrier network.
- Enhance communication with drivers and third parties.
- Use metrics to track supply chain performance after changes.
- Hold vendors and business-to-business partners accountable for their actions.
- Consider all the tariffs on the table.
- Look beyond politics, focusing on customers as the driving force of profitability.
- Improve inventory management with the right set of processes, resources, and people.
- Negotiate better freight shipping rates.
- Use auditing services to recapture costs.
- Remember the value and need for sufficient returns management.
- Track data in real-time.
Know How Tactical Freight Management Will Boost Your Supply Chain Functions and All It Implies
Tactical freight and supply chain management have a common thread. They both work to reduce inefficiencies, identify risks and weaknesses, assess possible outcomes, and apply information to choose, as well as guide, operations forward, and achieve the desired result. Does that sound familiar? It should. The scenario is the paragon of modern big data analytics: knowing what happened (descriptive analytics), what may happen (predictive analytics), how it can be recognized earlier based on current findings (preventive analytics), and what can be accomplished to achieve a better result (prescriptive analytics). Today’s supply chain leaders need responsiveness and unwavering commitment to answer customers’ calls for better, faster service. Tactical freight management, including the deployment of a TMS, makes this possible for both any peak season and all logistics planning as well.
Tactical Freight Management Series
This blog post kicks off a comprehensive series on all things tactical freight management so shippers may not forget the fundamentals that are core to achieving an adequate transportation management strategy. Throughout this series, we will take a closer look at tactical supply chain management, including:
- The state of the tactical freight market.
- Trends driving shippers to adopt tactical strategies for success.
- How to use tactical management concepts to increase capacity.
- The role of carrier invoice auditing.
- Choosing a capable carrier or logistics service provider.
- Understanding the challenges of auditing freight invoices internally.
- Why outsourcing supersedes all capabilities.
- How to reweight and reclassify freight.
- The savings possible through auditing.
- How to manage carrier freight effectively and tactically.
- The benefits of freight deconsolidation.
- Best practices in LTL freight consolidation.
- How to approach exception management.
- Why contract freight rates affect profitability.
- How to boost customer service through freight.
- The value of analytics in supply chain managements.
- The leading KPIs to succeed and grow more tactical in operations.
- How to apply data.
- What your company needs to do immediately—this week—to guarantee success.
Stay tuned over the next few weeks for some great practical tips around tactical freight management.
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