Supply Chain Visibility 25
out their entire lifecycle. Working in conjunc-
tion with existing applications (not replacing
them), supply chain visibility solutions can
seamlessly span divisions and third party
logistics suppliers, creating the means for
effective cross-company and cross-supply-
chain collaboration.
Logistics departments can take advan-
tage of track and trace capabilities to moni-
tor the status of shipments in quasi-real-time
and detect potential problems before they
impact customer service through sophisti-
cated alerting mechanisms. By having the
ability to maintain a permanent link between
physical flow of shipments and customer
logical phases of orders, managers can
react to problems faster. For example, if the
inbound shipment for one item is late, they
have the opportunity to notify customers,
propose alternative plans and take actions.
With better information at their disposal, lo-
gistics departments then have a far greater
chance of being able to group customer or-
ders together into one shipment, to reduce through multiple locations along a logical the use of ‘hubs’ are certainly not new.
transportation costs and improve service. route picking up goods along the way. Indeed, both methods have been widely
Instead of just consolidating loads from one discussed, trialled and implemented
location, companies can make additional around the world. It is generally accepted,
Challenge 2: Delivering with cost savings by also consolidating loads however, that neither of these two ap-
from different locations in one run. This proaches can be deployed effectively with-
Optimum Efficiency approach is particularly effective for com- out the use of sophisticated transportation
panies that may need to group items from planning and execution solutions. Clearly,
Order visibility is just the first of the chal- different locations into one customer order. it is not possible for one person or even a
lenges. The second is delivery optimization. By being able to ‘merge goods in-transit,’ team of people to make decisions about
With mass customization, logistics depart- logistics departments are able to create optimal delivery methods on a case-by-
ments must be prepared for endless variety. optimal loads, reducing costs by reducing case basis for each and every order. Nor
Orders may comprise an infinite number of mileage and increasing customer service by can one person or team possibly identify
items, some or all of which may be pack- delivering all of a customer’s ordered goods all of the knock-on implications of each
aged separately; boxes may be of different in one shipment. routing decision to ensure that optimum
sizes and weights; and it may be necessary efficiency is achieved across hundreds of
to co-ordinate the receipt of items from orders, nationally and internationally. But
different warehouses to complete a single Pros and Cons they can with the right tools.
customer order. All of these factors together Advanced transportation manage-
make it extremely difficult for logistics com- Central warehousing has its advantages ment solutions are available today that can
panies to plan loads and routes in a way — but its disadvantages too. If a customer empower logistics professionals with the
that optimizes cost and service levels was on one side of the country and the knowledge to optimize orders into loads to
Whereas mass customization increases warehouse was on the other, the distance maximize cost savings, while still delivering
the complexity for logistics, it is almost that the goods would have to travel would to meet customer expectations. In addition
certain that no additional budget will be be unnecessarily high. What is more, trans- to consolidating multiple orders into loads,
available to take this into account. Rather, portation costs would be incurred that could transportation management solutions can
organizations will continue to maintain pres- have been avoided. It is fairly obvious why determine optimal routing, mode and carrier
sure on logistics departments — along with there is a trend in logistics today towards selection. These solutions give logistics
all other departments — to deliver sustain- using regional hubs in place of central professionals the ability to consider different
able cost savings. warehouses. Goods can be consolidated multi-leg routing options, evaluate the im-
One approach that companies can take at locations that make more logical sense, pact of decisions on customer service and
is to maximize loads per truck through the based on the location of the customer. cost, and plan loads and routes accordingly.
use of ‘continuous runs.’ Each truck passes The concept of ‘continuous runs’ and Additionally these solutions can also
June 2007 Supply Chain Europe
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