The high-revolution has given emerging markets the opportunity to become fully developed, increasing the number of consumers and manufacturers. For existing businesses and shippers, this means more competition and demand for lower costs. Meanwhile, the increasing number of regulations and requirements on shippers has created a paradox between saving money and still meeting all requirements. Therefore, more companies have partnered with third-party logistics providers (3PLs) to achieve greater supply chain savings and presence in such markets through enhanced transportation management systems (TMSs). To maintain your role in the global market, you need to understand how 3PLs contribute to an improve transportation networks.
Greater Supply Chain Savings Thanks to Transportation Management
3PLs Leverage Technology and Data to Improve Operations.
The concept of actionable intelligence is about using technology and software to ensure company goals reflect industry strategy and demands. This involves the combination of data capture, analytic and dashboarding tools to make decisions easier. As a result, companies can realize better control of transportation networks and eliminate redundancies without risking a loss of product availability, while still cutting costs and boosting the bottom line.
For example, companies partnering with 3PLs can maintain control of order and load sizes, decrease accessorial charges and provide higher service levels to customers. Closely relating to auditing, these features and services help prevent product write-offs from oversupplied supply chains. Furthermore, system integration brings disjointed systems together, allowing for better communication, added expenses and reduction of backlogs.
Why Work With a 3PL?
Some companies continue to resist the 3PL revolution. But, the real-world benefits clearly indicate supply chain savings can be greater when working together in such relationships. In fact, the primary reasons for working with a 3PL include the following:
- 3PLs help companies grow and meet demands of new, emerging or recently developed markets.
- Partnerships reduce transportation costs through freight consolidation, appropriate freight classification and selection and increased scrutiny of billing and documentation practices.
- Companies can also bring operational goals and business strategy into alignment, reducing concern among stakeholders and customers alike.
- It boosts competitive advantage, giving upcoming companies an opportunity to compete with Big Box retailers.
Ultimately, working with a 3PL lowers total costs and reduces the occurrence of supply chain errors.
What About 3PLs Offering TMS?
The role of TMS is growing more important in modern transportation and shipping. While many companies look for more supply chain savings and increase profit margins, the TMS remains a stable, reliable source of increased revenue. In other words, the initial benefits may appear minimal, incapable of driving savings in the supply chain. However, the increase in efficiency, visibility, actionability and customer service is giving more companies greater reasons to embrace these new systems, like the Cerasis Rater. Moreover, cost savings translates into lower prices for customers, which helps businesses grow and expand.
Why Do Supply Chains Need Transportation Management?
The supply chain is like a living, breathing aspect of business. However, the nature of business also means that some supply chains can die without the right resources and tools in place to sustain it. As a result, more companies are looking for systematic approaches to cutting costs and eliminate inconsistencies across the business. Any changes to the supply chain that lack enterprise-wide deployment are doomed to fail as other parts of the system struggle to maintain operations with increased or decreased demand on a specific part of the system.
Like your body, if one part stops working, the entire system is threatened and could fail.
Part of the problem lies in the size of today’s supply chains. Throughout history, supply chains have faced great uncertainty relating to product availability and the ability to meet customer demands. However, modern technologies give companies more data points that can be boiled down into better, more accurate forecasts and real-time response to changes in market or inventory. Ultimately, modern TMS systems give companies an opportunity to boost network optimization.
Shippers must also consider how the supply chain has changed in relation to storage and inbound and outbound shipments that may or may not arrive. Now, managing these operations traditionally relied on an inbound freight routing guide. However, the increasing number of vendors and complexity of modern supply chains has made using traditional, paper-based guides obsolescent. Thus, your company must be willing to look to new technologies and services, especially those offered at competitive rates through 3PLs, as a solution to improving operations.
The need for versatility is another major factor in modern supply chain management. Since the number of products increases more with each passing day, having the right tools and resources available to move product immediately is essential to taking advantage of new trends in the market. In other words, partnering with a 3PL can be a major driver of supply chain savings to your bottom line.
What Does It All Mean?
The use of 3PLs will continue to grow throughout 2017 and beyond. For shippers that have not yet adopted an automated, easy-to-use system, like the Cerasis Rater, risks are mounting. Shippers need to act immediately to secure their future and reduce operational costs as more customers abandon purchases in favor of Amazonesque shipping costs and time frames. Ultimately, your customers will force you to evolve your operations and practices to stay competitive and still reap a positive ROI. Their wide-ranging benefits that extend across your entire supply chain, from warehousing to distribution, demonstrate the value of having a transportation network and managing partner to help your business grow and live.