Editor’s Note: This guest contribution the Cerasis blog comes from our friends over at Fronetics an inbound and content marketing company who specializes in marketing for companies with a keen value adding business model for those in the supply chain and logistics industries. We loved this post because as we get towards the end of the year many companies are conducting supply chain planning for 2016 (did I just type that?! where has the time gone!). For our readers, who are in the supply chain and manufacturing space, we want to share information that helps you stay strategic. A huge part of effective strategy in any business function is planning. We will include as well an Infographic below which visualizes the S.M.A.R.T. technique we referenced in our logistics KPIs series.
We will also include a bonus portion of the post to include what is the outlook for the freight marketplace in 2016 and what to consider as you start to plan for better transportation management in 2016.
Supply Chain Planning Starts with Looking Back
As the new year approaches, don’t overlook the valuable information you can glean from conducting a year-end review to kick start your supply chain planning.
Don’t start the new year without asking these 4 essential questions.
What were my biggest accomplishments this year?
Twelve months can seem like a long time when you consider everything that happened over the course of the last 365 days. Setting aside some time to review successful projects, notes of thanks from clients, or a particularly positive performance review reminds us what we’re capable of achieving and gives us a renewed sense of accomplishment.
Try this: Designate a file folder near your workspace to collect any materials or notes related to your successes as they occur. Doing so will make it easier for you to recall your accomplishments and provide quick access to a list of your achievements – helpful for a healthy dose of motivation or last-minute performance reviews.
How satisfied are you with the past year?
Were you successful in meeting the majority of your goals? Do you feel that you worked to your highest potential? Would you have done something differently? What about missed opportunities? Examining what went right and identifying areas for growth and opportunity are powerful exercises that both prevent the recurrence of negative behaviors and reinforce our commitment to priorities.
Try this: Thinking about your experiences of the past year in sum, try to assign a value to your entire year. How would you rate your year on a scale from 1 to 10? 1 to 100? Why? Adding some context to your experiences presents a more accurate picture of your year by tempering unusual highs and lows.
Is my current daily routine structured to make time for my priorities?
It’s easy to fall victim to time suckers, especially when they become ingrained into your routine. Has your daily 15-minute coffee break gradually morphed into 25 minutes? Are your 10-minute “headline scans” now closer to 30 minutes? These small, seemingly innocent extensions can snowball into major time loss, causing unnecessary panic as you scramble to meet deadlines.
Try this: The start of a new year is a great time to reset (or rethink) our daily routines. Build activities into your day. If you’d like to continue your now-daily 25-minute coffee break, think about extending your work day by 25 minutes. Feeling like you can’t absorb everything news-worthy in less than 30 minutes? Set your morning alarm 30 minutes earlier so you can arrive to work having already completed your scan of daily headlines. By taking a hard look at where your time is actually going and then spending a few minutes realigning your daily routine with your priorities, you’re intentionally and consciously assigning time to the things you find the most important.
What is it that I want to achieve next year?
Each new year brings with it a renewed energy to being our best selves. In order to get started, we need to define our priorities and what our success will look like. Setting SMART goals, or goals that are specific, measurable, achievable, realistic, and timely, keeps us moving forward by providing accountability.
Try this: After reviewing your past year, set aside some time to consider what you’ll set out to achieve this year. Create a detailed roadmap to successful completion of your goals.
BONUS: Freight and Transportation Costs Must be Considered in Supply Chain Planning
Looking forward is a big part of your supply chain planning. In the supply chain, you must also consider one of the largest portions of your supply chain budget: freight and transportation costs. ATA economist, Bob Costello, says the U.S. economy will remain strong through 2016, only negative is the driver shortage.
Freight volumes should start to climb again by the end of the year. Costello said current softness in freight is not due to any underlying economic drivers. Rather concerns over truck capacity constraints earlier this year pushed manufacturers and retailers to build up higher than normal inventories. As they work through that inventory, there will be “a healthy rebound” in freight volumes.
By the end of the year, the industry will be short 48,000 drivers, he said. By comparison during the last major driver shortage in 2005, trucking had 20,000 open jobs. Overall the driver shortage is forecast to hit 175,000 by 2024, “and that will slow down the U.S. economy,” Costello said.
“There’s no one cause [for the shortage], and no one solution,” he told the ATA membership. “We’ve seen pay rise in the low double digits these last few years, and that will continue.” More time at home, allowing younger drivers in interstate operations, and better treatment of drivers by everyone in the supply chain will also be part of solving the driver shortfall, according to Costello.
“This [shortage] is far from over, and we have our work cut out for us,” he concluded.
So what does that mean for your supply chain planning and your estimates on freight and transportation costs? It means you may want to expect to spend a little more in 2016 as the driver shortage, an improving economy, as inventories get lower, and we start seeing rate increases from LTL carriers looking to recoup a less than healthy 2015.
Here 5 top tips to help you combat rising freight and transportation costs:
- Consolidate Your Carriers
- Try and Avoid Rush Shipments
- Minding Freight Bill Audits
- Controlling Incoming or Inbound Freight
- Try and Avoid Rush Shipments
- Work with a focused 3PL savvy with transportation management who can offer both technology and services
Use this infographic to help you set, and achieve your SMART goals.
How was your year in review as you tackle the massive project of Supply Chain planning? What were your biggest accomplishments? Are there any goals that you’ll carry over into the new year? Do you regularly set aside time at the close of a year to reflect? We’d love to hear what you do to reset for a new year.
Fronetics Strategic Advisors is a leading management consulting firm. Our firm works with companies to identify and execute strategies for growth and value creation.