Supply chain managers working in an ever more globalized, "I want it now" world too often opt for quick fixes over sustainable solutions to make operations more efficient. Rather than looking to trim costs here and there, their first order of business ought to be increasing visibility into company-wide supply chain expenses in order to find out where money is going, and adopt more lasting improvements. And because the typical company's supply chain covers multiple countries, carriers and modes of transportation, this task really requires a Software-as-a-Service (SaaS) solution to create a central repository for the total supply chain costs. The solution should be easily updated in real time.

SaaS is not the only approach, high or low-tech, to making supply chains more efficient, but it is a far superior one. Many companies, for example, have opted to trim costs by reducing the number of carriers with whom they work: a seemingly logical solution that can actually make the supply chain less nimble. Others have shifted manufacturing operations overseas to save money on materials, failing to measure how those upfront savings may be largely offset by higher transportation costs, import duties, taxes and carrying costs. And some still record many of their supply chain costs on paper, never integrating them into a central database.

The folly of all these approaches points to the mistakes that are inevitably made when the logistics team looks at one piece of the supply chain in isolation. As a solution that shows the big picture, SaaS is far more comprehensive than any other approach, and promises more lasting benefits.

"Despite heightened attention in recent years," a study from the Aberdeen Group concluded, "many companies still do not have timely visibility into the critical processes involved in global supply chain management." That study found that a small minority of companies that had managed to reduce their freight costs did so by using software to better analyze how they were spending their money.

SaaS offers a way for companies to easily store and integrate a lot of data from disparate sources in a single place, so they can access it when they need to expand their carrier networks, or make other adjustment to their shipping practices. With a SaaS system, a company can create an optimized, global transportation plan, and then transform it into an enforceable, company-wide policy against which all shipping decisions can be executed.

Using the SaaS approach, suppliers around the globe and around the clock can log onto your system with a secure ID and password. The system automatically identifies the appropriate carrier and service level for a specific shipment, then notifies the carrier and generates an email and a tracking number confirming the transaction.

SaaS provides a significant improvement over Transportation Management Systems, or TMS, an older approach to managing supply chain logistics which produces routing guides and optimized operating plans but is largely paper-based and very difficult to enforce. The automation provided by SaaS solutions makes it easier to follow consistently, over time.

SaaS can automate logistics activities across all carriers, and help you refine and update your practices in real time, rather than the two to three weeks it might take to implement a change with older enterprise software solutions. If a new corporate policy is adopted banning expensive late night priority shipments, this change can quickly be incorporated into the software. If a company decides to add new carriers or drop some existing ones, the software can be updated as soon as the change is made, and enforced around the world.

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