When it comes to transportation management, a manufacturer's customers basically care about one thing, and one thing only: Get the products delivered on time. According to analyst firm Aberdeen Group, best-in-class manufacturers have an on-time delivery performance of 96.6% or better; laggards, on the other hand, are far behind at 83%. What's more, laggards are paying exorbitant amounts of money to achieve that lackluster performance, as 27.3% of all shipments are expedited. Best-in-class companies, however, use expedited services only 2.9% of the time.
Technologically speaking, best-in-class manufacturers have moved beyond their transportation management solution (TMS) implementations and are now leveraging the data and process automation and management capabilities, according to Aberdeen. They're focusing now on extending their collaboration lines while providing greater insight to their key supply chain partners.
"The focus on collaboration and visibility across internal and external departments has clearly provided the Best-in-Class transportation companies with the flexibility and agility necessary to overcome the rising costs in fuel and other shipping costs," says Brad Wyland, senior research analyst with Aberdeen. "The automation of processes and visibility has enabled transportation managers to better plan for and adjust their shipping decisions on a daily basis, helping them find the most cost-effective options for them and their customers."
The accompanying PACE (pressures, actions, capabilities and enablers) chart illustrates how manufacturers can progress from identifying a problem to focusing on a solution, and as a result become best-in-class themselves.
Pressures
- Increasing freight rates and/or accessorial charges (e.g., fuel)
Actions
- Provide greater internal visibility to freight status and cost
- Reduce outbound freight costs
- Collaborate with carriers/suppliers/customers to create more economical transportation process
Capabilities
- Connectivity with external parties for visibility into shipments and orders
- Process alignment with other departments (e.g., customer service) to create efficiencies
- Collaborate with external parties to create more economical transportation processes
- Providing accurate online information to other departments (e.g., shipment status, costs)
Enablers
- On-premises transportation management software
- EDI communication with carriers and suppliers
- Web portal communication with carriers and suppliers
- Supply chain visibility software
Source: Aberdeen Group
See Also
