The Problem with More: Creating Better Visibility and Efficiency in the Supply Chain

The pace of the world seems to be increasing at exponential rates. We have more people on the planet than ever before. And every year, we become more connected and more accustomed to almost immediate access to digital information. With that access comes an increasing expectation of speed in the supply chain: for immediate transactions, expedited delivery and shipping transparency for goods of every kind.

These demands, in turn, create more opportunity. Minds are working faster, and ideas and products are being developed more quickly. But more opportunity also means more competition, more scrutiny and more pressure on margins.

All of these factors are putting unprecedented pressure on the field of logistics. And while expectations and requirements are increasing at a dizzying pace, logistics has limits. The mechanics can’t really speed up more. Trucks, trains, boats and planes can’t physically get that much faster, and goods can’t physically move from A to B any faster.

But the process can, and must, get more efficient, secure and cost-effective. Consider these statistics[1]:

1. 30% of 76 billion packages are damaged, delayed or lost
2. In 2016, $114 million in stolen cargo across North America for an average loss value of $206,836.97
3. 30% of perishable goods don’t reach fork from farm
4. 76% of companies reported at least one supply chain disruption in the last 12 months

It’s easy to understand how these numbers aren’t good for companies and consumers – but they also have a negative impact on the world and the environment. As a global community, we can’t afford more.

Mind the Gaps

Because our supply chain system physically cannot move much faster, we’re trying to push more through it and get more out of it. This challenge is likely to increase due to many other factors putting pressure on the system, such as rising costs for labor, energy and raw materials.

Faster logistics can’t be the answer. Any solution has to work within the current system – increasing visibility in the logistics infrastructure to empower decisions that get back more time and increase efficiency. The pursuit of continuous improvement, so pervasive within the manufacturing process, has to be extended past the dock door and throughout the shipping process. It’s the only shot at real gains in supply chain performance.

But here’s the challenge: You can only improve what you measure. And today, many barriers are still standing in the way of being able to know exactly what you need to know, when you need to know it. Even the information that can be known today is limited, comes in too late or is expensive to reconstruct.

Filling those gaps presents enormous opportunity to transform logistics into a competitive advantage for companies involved in shipping perishable goods, high-value equipment, cold-chain items – or any situation where significant losses can happen quickly at any point.

If you discover, after a product has been received on the other side of the world, that the product is so damaged that it can’t be sold, there’s little you can do to rectify the situation. But what if you could fill the gaps to gain deeper and broader insight, in time to help you fix problems immediately, to ensure critical deliveries can be made on time and in optimal condition, and to make better decisions to avoid costly waste in the future?

Getting Real with “Real Time”

Filling in the gaps of information is one requirement. The second requirement is time – but not “real time.” “Real time” might sound nice, but after all, here’s what “real time” usually means – a tracking system is collecting some data almost instantly. But the data is limited to one broad parameter: often, the location of a truck or ship (less often, some measure of the condition of that vehicle’s cargo). To get any insight you can act on, the data must get into your system for analysis, which creates a delay. And if a mobile connection is unavailable, your central system won’t have the data until well after a problem occurs. So, “real time” may not be really helpful. Moreover, an exact point in time for a piece of data that’s critical for one shipper may be totally irrelevant to another shipper.

A more important discussion – and another crucial gap to fill – is to provide critical and complete information about your shipment … in time. Meaning, in time for you to make another, or better decision. That “time” might be right now, predicting three hours from now, or in a day. The reality is that existing tracking solutions don’t help you easily and cost-effectively collect, analyze and apply the information you need, at whatever time you need it, to prevent or solve a problem.

Shippers and logistics providers need the right data, at the right time, to make informed decisions about their assets and ensure freight safely arrives on time and in pristine condition. And these problems require a different approach, different thinking – a deeper, more multidimensional tracking and monitoring system that is customizable to the unique needs of your company and your industry.

When you gain this information at the package level in time, you have the tools to optimize the logistics like never before.

Sameer Agrawal is vice president of Connected Supply Chain Solutions, Honeywell Safety and Productivity Solutions. For more on Honeywell’s industry perspectives and connected solutions for the supply chain, visit http://hwll.co/LIVE.