The leading cause of transportation sector inefficiencies is data silos
The trucking industry in the US alone is grappling with a shortage of more than 80,000 drivers this year. Nearly two score other countries are scrambling to fix truck driver shortages to the tune of three million-plus. The inability to utilize vehicle capacity in transportation procurement services can be attributed to several factors. The endemic issue of truck driver shortage is a key obstacle standing in the way of vehicle capacity utilization in transportation procurement. Besides, manual planning approaches mean vehicles end up travelling longer than desirable distances, thus splurging on fuel for no good reason. Travel time just gets extended, and customers are in for delays in delivery. At least in some cases, businesses might be forced to compensate affected customers, which, from the standpoint of the industry, is nothing to celebrate! Chances are that supply-chain partners (e.g., carriers, logistics service providers, shippers) are running legacy systems for logistics management, freight procurement, warehouse operations, and management of core business processes.
A whole lot of issues, ranging from departmentalization, outdated hardware/ software, and the diversity of programming languages, operating systems, project management tools prevent antiquated systems from “talking to each other.” In effect, they serve as little more than isolated data dumps that users across the enterprises must struggle to access. There is light at the end of the tunnel for participants in transportation procurement services. It’s just a question of finding it and how soon.
Challenges of the Service
Give transportation partners reasons to go digital
There are several in-market digital tools, such as software for optimally managing both inflow and outflow of goods. These platforms can sift massive data sets, “crunch” them, and deliver just what’s required, namely in-depth understanding in as few words as possible, to CXOs. So, they can make better and faster decisions in transportation procurement services. Many transportation management systems, for instance, generate carrier performance metrics such as on-time pickups and delivery, billing accuracy, in-transit damage, and transportation cost breakdowns (e.g., order processing, administrative overheads, inventory carrying expenses, warehousing charges, and actual transportation costs). By pointing to the irrefutable benefits of digitizing transportation procurement, businesses can spur on supply chain participants to adopt software, apps, augmented displays, cameras, and more in day-to-day procurement activities.
Present employees with opportunities to continuously learn and improve
To further drive up the skill sets of their transportation procurement partners, businesses should actively consider providing regular training in specific processes (such as project management) and methodologies (e.g., agile, lean six sigma). Resources must get up to speed on general trends in supply chain management and transportation procurement services. By broadening partners’ knowledge horizon, training programs will improve their ability to bring tasks to faster completion. It will help CPOs in the sector make better decisions to save time and do more with the same resources. A good grounding in legal concepts, like modern slavery, for instance, will enable transportation procurement teams to comply with regulatory mandates and promote responsible sourcing in their ecosystem.
Build a culture of experimentation
Transportation procurement services present a landscape swept by constant and continuous change. These often manifest in the form of new pricing tools, bidding platforms predicated on real-time market data, and consolidated at-a-glance RFP dashboards. Improving the workforce’s ability and readiness to engage with change is going to be an important measure in the days ahead. To this end, employees need to be encouraged to put new ideas, tools, and processes to the test and ascertain their relevance and soundness.
How SpendEdge can help you?
Applying their extensive repertoire of core industry knowledge, our 250+ experts in procurement and more than 25 dedicated specialists in our transportation center of excellence help clients identify and engage on a long-term basis with dependable suppliers. Our teams provide the advisory businesses in transportation procurement services need to streamline relationships with suppliers and keep their supply chains up and running incident-free. We work closely with clients, all the way from supplier qualification to negotiation and onboarding, to help develop a vendor base that demonstrates the right mix of cost, competencies, and reliability. This has improved outcomes, going beyond the staple cost considerations, for our expanding clientele across industrial sectors. Enhanced contract management and improved supply-side efficiencies are just some of those payoffs for clients.
Behind the efficiencies our clients have realized are the invaluable market insights our experts provide, which include data on the latest customer shifts, market developments, and pricing in transportation procurement services. All of these work in tandem to enable CXOs at client enterprises make more informed decisions around budgets and supplier engagements. At the same time, with our benchmarking analysis, businesses get to know where they stand in the market and find room for improvement, including in supplier negotiations to achieve new levels of efficiency.
Route optimization solution saves millions of miles for a transportation business
Rail transportation is responsible for moving billions of tons of freight in the US and ranks high as an efficient transport facility for almost every kind of freight. Rail-based freight services bring a clutch of clear benefits like faster delivery, secure transportation using dedicated carriages and containers, and great cost efficiencies. However, when it comes to moving pharma products, issues like temperature control, various transit risks, and, most importantly, chances of product degradation resulting from temperature variations enter the picture. Several pharma businesses had already made some headway in shipping products via rail systems. Naturally, our client, a leading pharma player, was particularly excited about doing a detailed study of the promises and benefits afforded by rail transportation and efficient transportation procurement services.
In early 2022, the client began to work with our analysts to scope out the opportunities in pharma shipments via rail networks as well as address the concerns and challenges therein in a timely manner. Our team set to work, and, before long, we succeeded in dissecting the key developments in transportation procurement services and logistics infrastructure for all the regions under consideration and proceeded to draw informed conclusions. The study included detailed breakdowns of the market drivers and inhibitors.
We also conducted a comparative pricing analysis of various means of transport, taking care to draw the client’s attention to the relative merits and drawbacks of each transportation mode with special focus on the post-Covid era. The study included regulatory insights gleaned from across the focus regions, and the objective here was to mitigate the client’s risks and crank up supply chain efficiency. In the next step, our experts helped the client qualify and shortlist vendors based on relevant KPIs – lead time, dependability, on-time delivery, inventory accuracy, order cycle time, quality, defect rate, and more.
Our insights are helping the client pick the most effective rail shipment routes after weighing in a multiplicity of factors like traffic congestion, time window for deliveries, and cost structure, apart from the safety and security of the pharma cargo.
