Any discussion on supply chain risk management and applying managed transportation to help prevent risks from coming to fruition is incomplete without touching on the pandemic to overcome supply chain disruption.
Let’s take a closer look at an examination by Industry Week Since risk is everywhere, shippers need to know the top challenges driving increased interest in and demand for managed services
Market volatility is the one that remains constant in today’s supply chain resiliency. Market volatility describes a stage at which volume and capacity availability are misaligned. That can mean ample capacity and not enough shipments or far too many shipments and not enough equipment or drivers. Capacity is also a slightly complex topic, reflecting changes within the available capacity and individual markets, individual modes, and with differing logistics partnerships. The continuous change between shipments tendered and accepted or rejected is making it challenging for shippers to stay strategic.
The solution to overcoming the problem of market volatility is understanding what is happening and in real-time with supply chain risk management. When a shipper cannot understand the various factors playing into market volatility, this is known as the limited granularity of data. Poor granularity means shippers do not know where to prioritize their fulfilment strategies, and that may be more likely to disproportionately distribute inventory.
A traditional inventory replenishment strategy, such as order based on historic patterns, is no longer effective in today’s world. Traditional inventory management strategies were designed with all supply chains being linear, reflecting a manufacturer to retailer to end-user process following reverse logistics. Advancements in technology and the proliferation of e-commerce have created a somewhat cyclic supply chain that can route orders from anywhere.
The evolving supply chain and buying options for consumers is an advantage in the modern world, but without visibility on all inventory throughout a company’s network, it grows more difficult to track. As a result, carrying costs spiral out of control, and stockouts become more likely which means an easier conversation about supply chain risk management.
The increased strain on available resources and the growth of e-commerce create a greater need to manage by exception. Rather than trying to manage each shipment manually, today shippers can leverage technology to enable true management by exception. For instance, the capacity that is needed per shipment. Exceptions are the one-off issues that arise that may require human intervention to resolve.
There was a time when management by exception and manual management were almost identical. But automation and sequential tendering processes within an advanced transportation management system (TMS) have given rise to the ability to manage by exception. As a result, shippers can prioritize in-house processes and only intervene on shipments where human intervention is necessary. Therefore, it is easier to increase the volume of freight moving across both inbound and outbound channels.
In recent months, cybersecurity breaches have led to the complete collapse of whole portions of the supply chain. Without proper firewalls and adequate penetration testing, any shipper is at risk for a breach. Fortunately, shippers that take a proactive approach by properly segmenting systems and conducting regular scans to identify unusual user behaviours can help to mitigate this supply chain risk.
Enhance your Supply Chain Risk Management by Choosing the Right Managed Services Partner. Today, every company needs to be covered from end to end when dealing with the supply chain and how it affects day-to-day and minute-to-minute disruptions. Businesses that thrive and need to do so now, effectively reach out to 3PLs and converse about supply chain risk management.