Multi-channel retailing, the shelf-connected supply chain, near-shore sourcing, constrained capacity and supply chain differentiation are all trends for manufacturers and retailers that we saw in 2011 and that we will continue to see throughout 2012. So where does transportation fit? As we move into this year and beyond, here are the four must-have transportation resolutions.
So where does transportation fit? Edgar Blanco of MIT’s Center for Transportation & Logistics just offered up his own logistics resolutions on his Forbes blog.
In the same spirit as Edgar, I’d like to put forth my own resolutions to consider as we move into this year and beyond.
Trends such as multi-channel and pop-up retailing are creating new dynamics within the transportation chain including an influx of parcel freight and a change in network order dynamics—both of which can significantly drive up transportation costs. Taking a step back to look at how you can maximize your available network resources to mitigate cost and risk and maximize service will drive considerable value.
Remember That Optimization is NOT a Commodity
While transportation solutions have continued to enjoy an increased adoption rate, many shippers have been opting for simpler, quicker-to-deploy solutions with a “good enough” approach to value. The challenge here is that the problem solving ability of any transportation solution provides the majority of value that drives its business case. This means that significant dollars are being left on the table in lieu of simplicity. Moving forward, shippers should look to measure the cost of the “wrong answer” when evaluating their existing practices.
Look Beyond Analytics
Advanced analytics have become a key technology trend across many solution areas including transportation, but are analytics alone enough? Are there ways to bring those metrics in line into actual operation processes instead of a separate off-line activity? Shippers should look for use cases where analytics can be leveraged to enable real-time, execution-level decision making.
Plan Incrementally and Iteratively
How do you combine the desire to create economic density for effective transportation optimization with the need to be able to react to new orders and rapid changes to existing orders? According to Edgar, he says to embrace uncertainty, but to be sure to develop plans, build resilience in your operations and set up the right protocols to respond. That’s true. The answer is the ability to iteratively and incrementally plan your network only releasing loads for execution that are either optimal or just have to be processed because of time limitations. The rest should be left in the pool for your solver to improve as new data becomes available.
Given the opportunity I have to work with our customers, I look forward to helping them with these resolutions and others and will report on how they are doing. In the meantime, are there any you think we might be missing?