Editor’s Note: This blog post is from SupplyChainOpz. We found it as a great summation of all the things companies must consider when mastering their supply chain. Many studies state that those who can manage the functions with the supply chain, they have a competitive advantage. As a transportation management third party logistics company, we know at Cerasis that transportation makes up a large portion of the costs and efficiencies of any supply chain. Look at these 7 supply chain trends as a guide to better your supply chain today. Contact Cerasis if you would like help in more effective transportation management. 

In this article, Professor Burcu Keskin from University of Alabama will share 7 supply chain trends that working professionals should watch.

As pressure to improve supply chain cost performance increases for many companies, the evaluation and selection of competent suppliers becomes a key concern. Typically, total cost, quality, and delivery performance appear as critical factors in the supplier selection process. However, complex supplier relationships, unreliable sources of material supply, and ever-increasing customer expectations greatly add to the expectations to select the best suppliers and conduct their operations more efficiently.

[INFOGRAPHIC] 7 Supply Chain Trends as Laid out by Supply Chain Expert

Supply Chain Trends

Within this context, a number of supply chain trends have been gaining attention:

1) Customer-driven supply chains

Differentiated customer experiences define the current supply chains. In the past, having a one type product with a long life cycle had been the norm. However, with reduced life cycles, customer-driven innovative products and services have forced supply chains to be flexible and adaptable. The biggest implication of this new imposition on procurement process is that now procurement managers have to deliver suppliers that are cost conscious and timely in their operations but at the same time can adapt to the changing demands of end customers.

2) Connected supply chains

The way we access internet has changed rapidly over the past few years, transitioning from computers to tablets, from tablets to mobile devices, and to “everything.” With “Internet of everything” concept expanding, there are more opportunities to connect supply chains and increase the visibility from order initiation to order delivery. Data coming from different sensors located at different suppliers from their production and transportation operations, carry a lot of information regarding the quality of production process and timeliness of delivery. At the same time, this data may indicate possible issues in the procurement process, regarding product quality and delivery. Monitoring and analysis of this data may provide opportunities to intervene before issues becomes major problems.

3) Risk Management

In the past, many buyers relied on safety stock inventory to mitigate any risks or disruptions to suppliers. However, now with the global supply chains and due to uncertainties over economies, weather, and political situations, new requirements and trends arise to mitigate potential risks. One of these trends, in addition to inventory keeping, is dual/multi-sourcing. Reducing the dependence on a sole supplier is crucial in managing risk.

4) Management of Complexity

Complexity of supply chains is not a fad that will pass rather, the supply chains continue to evolve into networked economies. Hence, managing complexity has become an accepted fact of managing procurement processes. Analysis and optimization of complexity requires a complete understanding of market volatility, fragmented customer segments, globalization, and sustainability. All of these aspects impact procurement processes.

supply chain trends SCM5) Technology Matters

Having a holistic view of information technology offerings for integrating all of the supply chain operations, including procurement processes is crucial in current environment.
BONUS: INFOGRAPHIC: Supply Chain & Logistics Trends from 2014

6) Rethinking Workforce

With connected supply chains and new digital business models, companies needs to rethink the talent development for successful procurement operations. Unfortunately, the traditional workforce training models do not support the current needs. Procurement and supply chain managers that are comfortable with data-driven decision making and have a complete understanding of end-to-end supply chains will be in high demand. Skill gaps will continue to be a challenge for companies.

7) Total Cost Perspective

In the past, many buyers selected purely based on purchase price and quantity discounts. However, when large amounts of products are purchased inventory keeping and management costs are skyrocketed. Therefore, instead of this one-dimensional perspective (procurement price), now buyers have a multi-dimensional approach to consider all dimensions and impact of procurement on other operations (inventory, transportation, handling, etc.) A total cost approach and data-driven optimization to come up with the best plan of action are the desired ways to attack this problem.
In order to help companies decide objectively to reshore manufacturing back to the U.S. or offshore and see Total Cost perspective for yourself, the not-for-profit Reshoring Initiative’s free Total Cost of Ownership Estimator can help corporations calculate the real P&L impact of reshoring or offshoring. http://www.reshorenow.org/TCO_Estimator.cfm
This article originally appeared at SupplyChainOpz

In the Supply Chain Management Review article titled, “Five Supply Chain Trends That Shaped 2012,” there are five trends listed that make manufacturers and distribution companies more effective as relating to their supply chains. These compelling five trends align perfectly with the Cerasis unique value propositions that we offer to our manufacturing and distribution customers.

The FIVE points and how we provide value to those trends:

1.Improved Customer Service Levels over Cost-Cutting: Companies are now focusing on how to improve service levels while simultaneously decreasing costs.”     

In an earlier report we read on the ROI of a TMS, they say that the number one factor a company leverages a TMS is to improve customer service. Think about the cost of losing a customer if you have an inefficient LTL freight shipping process. Additionally, we often do uncover hard cost savings.

2.Execution Moves Ahead of Demand and Supply Planning: The ability to react efficiently and effectively is critical to every supply chain, and it primarily relies upon end to end supply chain process visibility at the transaction level.”

The Cerasis Rater allows for these types of efficient transactions. There is no time wasted negotiationg rates, looking up common commodities/classes, haggling for limit of liability, etc.

We not only allow our customers more time to stay out of the weeds and stay strategic, but we also allow them to execute freight shipments more easily.

3.Resurgence of Contingency Planning:  More importantly, companies want to know how well they performed against their plan and if the plan was truly followed.  When a crisis occurs, individuals have the tendency to find “work arounds” to resolve the issue as quickly as possible.  Companies are focused on developing contingency plans, executing those plans, and understanding in real time if their plans are effective.

It sure is difficult to have a contingency plan if you are in “reactionary” mode all the time; Cerasis frees up supply chain and logistics managers so that they can employ contingency planning, letting them get out of the weeds of shipping LTL Freight

4. End-To-End Partner Communication and Collaborative Execution: Trading partners in 2012 are now acting in a concerted manner based on transparent information {data/visibility} to resolve issues when they happen.

Cerasis stays consultative through our Customer Service Reps, Freight Specialists, and Account Executives as we are always providing value with analysis, reporting, automation, and accounting consolidation as well as reconciliation.

Our mission is to constantly add value and to continuously improve our people and services; collaboration is necessary since we are only as successful as our partner customers.

supply-chain-trends-big-data5. Big Data Is Becoming Mandatory: And combining the data of multiple supply chain partners, turning that data into information and being able to react and execute accordingly requires a lot of data. 

Ahh, the KEY ingredient: VISIBILITY. Are you leaving money on the table by not knowing the history of your carrier choice at time of LTL freight shipment? Are you spending too much time on accounting, claims processing, inbound shipments, and more? How do you get this needed visibility into your supply chain and logistics department today? The Cerasis Rater and your dedicated freight management services team provide full reporting such as “least-cost carrier” (a report showing you the savings if you had chosen the least-cost carrier), freight shipment analysis, invoice auditing, why specific carriers were not chosen, and more.

How much does it cost for you to LOSE a customer? Are you able to answer how many customers you have lost due to inefficient transportation management? Increase customer service with on-time shipments, full supply chain visibility, and freight shipment analysis.

If you need help managing your LTL freight and logistics department, schedule a historical 90-day Freight Invoice Analysis to see where your hard costs savings opportunities lie.

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