Identifying Supply Chain Savings Opportunities with Exception Management | descartes.com
Identifying Supply Chain Savings Opportunities with Exception Management
Introduction
For manufacturers, wholesalers and retailers, supply chain disruptions have costs and consequences. To offset the impact of late shipments, unreported delays and detention, shippers are increasingly requiring 100 percent visibility into the location and status of their freight. Realizing its value, shippers are also willing to invest in real-time visibility that enables them to receive accurate and actionable shipment monitoring information to achieve maximum operational planning.
The Demand for Visibility
Not too long ago, it was virtually impossible to have total visibility into shipment location, dynamic ETA’s and status across a supply chain. Today, the industry is trending toward 100 percent visibility. Descartes MacroPoint’s own Visibility Demand Index indicates a threefold increase in requirements by companies for real-time information on freight status. Shippers now expect 3PLs and brokers to let them know as early as possible when there are disruptions in the supply chain so they can focus on managing by exception to enable corrective action.
- How has visibility demand changed in recent years for shippers?
- Can visibility lead to hard cost savings?
- How will this impact your operations?
Embracing Shipment Tracking Solutions
90 percent of shippers now indicate that freight visibility is viewed as a core service offering and that they are using visibility capabilities as a key factor when choosing brokers, 3PLs and carriers to haul their shipments. Using readily available, highly advanced tools and technologies, shippers are turning to shipment tracking solutions designed to provide frequent and detailed updates on the status of shipments automatically, and to provide tracking information directly through integration with a carrier’s enterprise and transportation management systems.
The Cost of Visibility
Because the rapid growth of shipper freight tracking is meeting a distinct need, and providing for higher supply chain productivity and efficiency, it is essential to understand the cost savings and operational efficiencies that can be attained by real-time visibility. Particularly troubling for many shippers and their customers is the amount of time spent calling and emailing to find out the status of a shipment. In today’s current environment, customers spend countless hours calling shippers for status updates that requires the shipper to call their carriers to get real-time status updates. Not only is this very inefficient, it is also very costly.
Cost Breakdown
| Shipments to be Tracked | % of Shipments Needing Communication | # of Shipments Needing Communication | Average Minutes Spent per Shipment | Total Hours Spent on Communication | Hourly Track and Trace Personnel Cost | Annual Investment | Cost Savings |
|---|---|---|---|---|---|---|---|
| 1,000,000 | 63% | 630,000 | 171 | 78,500 | $15.00 | $2,677,500 | - |
| 1,000,000 | 27% | 270,000 | 177 | 6,500 | $15.00 | $1,147,500 | $1,530,000 |
Conclusion
The ability to reduce manual communication with automated freight visibility can lead to significant cost savings and more effective use of talent. Providing automated visibility can also mean increasingly higher levels of customer satisfaction and efficiency within your supply chain. Descartes MacroPoint’s control tower style freight visibility platform provides automated monitoring and real-time shipment location visibility.