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In supply chain operations, manual operations such as end-to-end time and cost calculations, checking routes on maps, comparing freight quotes, and searching for freight availability can take up a lot of time. Quickly changing information will make this process not only manual, but also inaccurate and hence extremely resource intensive.
With more and more customers demanding a faster turnaround in getting shipments out of the warehouse and to their doorstep, these manual processes can become a serious burden that negatively impact a company’s competitive advantage.
It goes without saying that modern businesses should strive for ideal optimization and operate with efficiency. As a small first step, by using digital devices and services, businesses will be able to automate simple and repetitive activities. This will give them a significant competitive advantage as they are better able to schedule deliveries quickly as compared to those who still use traditional methods like post-it notes, emails, and basic Excel in their day-to-day work.
Organizations should pursue change more aggressively when it comes to process simplification through automation. This will be the new norm in most developed countries.
Let’s look at some of the manual processes that take up resources.
Calculating shipping costs manually
A lot of time can be spent calculating shipping costs manually. This is nonetheless an important activity because this usually makes up a large percentage of logistics costs. Unfortunately, many logisticians still use basic Excel spreadsheets. Today there are several off-the-shelf tools available to make this work simpler and much more accurate. These applications can calculate and compare costs and transportation time in a matter of seconds with almost zero errors. More advanced platforms can also be programmed to take into account other factors such as toll charges along certain routes. Some of these solutions can also be programmed to take into consideration preferred routes and map cargo consolidation or break bulk points into routes to maximize efficiency for several shipments at the same time.
Automated carrier selection
In many businesses, carriers are manually selected to fulfill open orders. This process is actually easy to automate, as carrier selection is largely a rules-based activity. For example, the business must decide maximum and minimum rates and thereafter set a priority on timeliness or cost. Several platforms exist that allow users to input the data of existing vendors and predetermine rules for carrier selection. When orders arise, parameters can be fed into a system that automatically decides the best carrier for each shipment quickly. In many instances, such as system would tie into the system that calculates transportation costs.
Access to the spot market
Checking spot market rates is always a good practice. However, keeping track of the spot market for freight rates involves a number of manual activities that are very time-consuming. This usually involves using multiple communication channels and manually transcribing the same information to various non-integrated tools such as your own ERP software or logistics platform. This work can also be simplified using off-the-shelf software with minimal customization required. If additional integration is required, this too is possible, with advanced users even having their ERP systems make freight routing decisions for them and communicating these decisions to all relevant stakeholders through a standard email.
Tracking performance improvements
When pursuing any form of process optimization effort, it is important to understand the current situation comprehensively. This can be done by deploying time studies and other such tools. The idea is to be clear about where the biggest issues are and start projects that improve the situation to fix these issues first. Automation will not necessarily improve operation unless future processes are clearly defined and the change itself is managed well.
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