5 Ways to Optimize Your Supply Chain
At a time when trucking capacity is scarce, unpredictable new tariffs are affecting imports, and many suppliers are pushed to capacity, shippers must take advantage of every conceivable way to optimize their supply chains. Through a focus on optimization, supply chain stakeholders can take steps to mitigate volatility and the ever-increasing costs associated with their shipments.
To help our customers and other shippers determine key areas of focus for optimization, we’ve compiled the following list of pain points where most supply chains can tighten up operations.
1. Route Optimization
With modern transportation management systems (TMS), optimizing delivery routes has become easier than ever before, and the ability to take advantage of these solutions has become affordable even for small and medium shippers. Affordable cloud-based TMS evens the playing field, allowing transportation planners to easily plan efficient routes that save on fuel and – perhaps more importantly in the midst of a capacity crunch – driver hours.
Knocking five or ten minutes off each stop may not seem like a big deal, but if you multiply that by 10 or more stops it can give your drivers significant wiggle room while also decreasing overall delivery costs.
2. Load Consolidation
It can be tempting to ship out product piecemeal to make sure it gets to the end user or store shelf as quickly as possible, but this manner of shipping is highly ineffective in terms of cost. Simply put, shipping full truckloads is cheaper.
If your operation only has small shipments, infrequent loads, or slow production times, consider partnering with a third-party logistics provider so your partial loads can be consolidated with those of other shippers on the same lane. The long-term cost savings driven by consolidation will offer a demonstrable positive impact on your transportation budget.
3. Use Multiple Modes
With the amount of trucks that we see hustling goods back and forth each day, it’s sometimes easy to forget that there are other methods to get cargo from Point A to Point B. If capacity is hard to come by on your lane, check out other transportation modes that are going to the same place.
Rail transload has become a popular option as trucking capacity continues to get tighter and the driver shortage grows larger. Remember that trucking and rail do not have to be mutually exclusive, and it’s often far easier to find short haul capacity on the other end of the track.
4. Shipment Leveling
The traditional method for avoiding stockouts on in-demand inventory is simply to carry large amounts of that inventory. However, this method is expensive and largely unnecessary in most cases. Using Lean principles, manufacturers and distributors have teamed up to keep high-demand product in stock using smaller frequent shipments rather than placing large, cumbersome orders that take up valuable warehouse space.
Forecasting is a wonderful tool but is by no means a perfect one. By using shipment leveling, inventory can be easily scaled up or down based on demand. By fulfilling demand in this way, recipients aren’t left with high volumes of unsold SKUs to store—or worse, to dispose of if there is a sudden shift in market demand.
5. Proper Product Labeling
If you’re wondering what labeling has to do with your supply chain, the answer is: Everything. Labels don’t just display your product’s varied regulatory compliance, expiration dates, and branding. Bar codes, RFID labels, and other labeling technologies have become a crucial factor in supply chain visibility.
To drive supply chain optimization, labeling should be integrated with other supply chain technology systems, such as TMS, warehouse management systems, yard management systems, inventory management systems, enterprise resource planning systems, and more. Labels facilitate everything from shipment to storage to returns, and an effective enterprise labeling solution is key to an optimized supply chain.
Ask the Supply Chain Optimization Professionals
These are only some of the areas you can focus on to improve efficiency across your supply chain. At WSI Logistics, we’ve been helping organizations optimize their supply chains for more than 50 years, and we’re happy to help you identify and address any pain points within your operation.