Supply Chain Management, Risk ManagementMore than ever before, maintaining flexibility in logistics is essential.Alan Miller is President, TransportGistics, 631-567-4100Your business is likely facing a rapidly escalating number of issues. You can no longer delay; now is the time to take action to get ahead of what may be forthcoming. You need to start establishing multiple contingencies as, more than ever before, maintaining flexibility in logistics is essential.You are now faced with a series of choices: Do you adapt your existing processes to current realities and those that can be anticipated? Do you maintain the status quo; can you? Do you implement a technology solution to augment your contingencies?These are critical questions—the answer should be dependent upon whichever affords you the greatest ability to improve efficiency, maintain flexibility, and drive down costs.In order to maximize your decision, a solution must be adapted to the company's processes, or the company's processes must be adapted to the solution. As a result of this adaptive period, promised advantages are delayed while expenses are accelerated. The larger the solution, the longer the implementation, the higher the risk, the higher the costs, the longer the return. Taking an Incremental ApproachWith an incremental solution acquisition model, companies can achieve the advantages and mitigate risk by deploying a series of solutions in consecutive fashion while propelling a shorter run-up to a return on investment.This serves to accelerate savings, decelerate expenditures, reduce the impact on existing macro-operations, and provides a greater degree of flexibility; changing a plan is much easier and less expensive than changing installed systems and processes.This incremental approach focuses attention on solving experiential issues, whereas deploying all-at-once solutions requires a longer outlook relying upon forecasts and predictions—all while running the risk of magnifying legacy inefficiencies.Do the Simplest or Easiest Work FirstFocus on the low-hanging fruit and address inefficiencies, reduce freight expense, simplify execution, make transportation information immediately visible to all parties involved in the transaction process, improve communications, and increase productivity; remember that simply negotiating, executing, and implementing new transportation rates and pricing does not guarantee any benefit.Concentrate on both simplifying and improving the acquisition of carriers while driving landed costs down either in an open or closed spot market for one-off shipments or heavily trafficked lanes. Your emphasis should also be on ensuring that all parties involved in supply chain transactions are aware of the most appropriate carrier at that moment and associated rules of engagement for any given shipment. Consider validating invoice veracity and supplier performance; look for business analytics and insights. Enforce compliance.The Simpler, the BetterManaging the costs of moving goods through the supply chain is a huge challenge for shippers and consignees—these challenges are increasingly heightened in this environment. A single shipment involves inter-company and intra-company transactions and communications. Streamlining a supply chain is not easy, but the simpler the solution involved, the better.Do something, act. Be smart, be bold, be nimble, and be well.
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