4WLSCS | Blog

Improving Business Profitability by Increasing Supply Chain Visibility

03.14.2014, by Michael Rogers

Supply chain systems continue to grow in complexity, whether globally or domestically. And business continues to grow even more competitive by the day as newer technologies are introduced and the customers’ deadlines become more stringent. Recognizing the need for supply chain visibility is one of the latest trends that have emerged as a result to the recent economic upheavals.

Supply chain initiatives offered by the uninitiated can be risky. It does not only involve the transportation of goods from one place to another; it also involves precarious time management and inventory management strategies to make sure the deadlines are met at all times. After all, how will your business be affected if goods are delivered a week later than promised? Such delays can shatter the bottom line for any company – whether it is shipping products or waiting for a critical part so as not to shut down production.

Supply Chain visibility allows for efficient tracking at every stage of transportation – whether it is lying in the warehouse, has shipped and in route, or has reached the final customer successfully. Manufacturing and distribution companies need to be able to track their goods at every stage so if an uncontrollable disruption occurs, efficient contingency plans can be put in place to minimize the loss.

In case of an unforeseen disturbance, the shipment can be diverted midway to a “safe” destination as a proactive reaction to the situation. This is only possible when the company is able to track the movement of goods precisely. Such impromptu corrective measures can save the company from massive losses in the form of damaged goods, late deliveries and lost sales.

Greater visibility also offers greater flexibility in terms of inventory management. Companies need not build up safety stock in order to battle unforeseen circumstances. They need to be smart about managing the channels of transport to absorb the fluctuations of demand and supply actively. Consequently, there is lesser company resources invested in the inventory while a major portion is redeemed as profits.

Supply chain visibility is also associated with greater competitive edge. You can easily scoop up competition by investing adequately in technological resources that offer elevated visibility. Consequently, you will be able to meet customer deadlines and make more customers that are looking for diligent services.

In the long run, greater supply chain visibility will surely translate into higher profitability for the company in many ways. It is time for companies to recognize this profit potential and capitalize on this opportunity to maximize available technology. It is all about offering something better than the competition.

Leveling the Playing Field

03.04.2014, by Michael Rogers

Businesses are competing against each other regardless of their size, potential and capacity. Often the small sized businesses are at a disadvantage when facing a larger competitor. This edge allows large scale companies to offer more services at a lesser cost while maintaining their desired profitability. So how can a level playing field be established as far as business competition is concerned?

Large logistics firms make news as they work with huge shippers. Meanwhile, other logistics firms are serving small and mid-size clients with results that can be even more profound. The reason this is possible is a 3rd Party provider can use their technology and leverage in the marketplace to level the playing field. It can give smaller companies the same transportation advantages as their large competitors.

These transportation advantages effectively include freight management, warehousing, carrier selection, pricing analysis and negotiation, technology, market expertise and risk management. These functions are vital to all manufacturing concerns in order to make their products readily available for their customers. If handled by a third party supply chain management company, the services are not only bundled intelligently and take advantage of the provider’s expertise in all areas of the transportation process (as it is their core competency and most likely not that of the company utilizing their services).

On top of this, the transportation advantages from third party supply chain management companies not only reduce costs, but streamline processes and optimize procedures. This cost effectiveness eventually translates into higher profitability for the company. In other words, the small business concerns get a chance to compete with the large scaled businesses on more equitable grounds with similar services provision involved.

By turning over their logistics details to someone who specializes in this field, business owners eliminate time-consuming responsibilities. They don’t have to worry about keeping track of the effectiveness of carriers. They need not invest in transport software, which now has an expected life cycle of about 18 months before something more robust is available. They don’t have to keep constantly on top of regulations and trends. They can keep their eye on what’s most important – their business.

There is a saying applicable to this type of strategic alliance – “Never doubt that a small group of thoughtful, committed people can change the world. Indeed, it is the only thing that ever has.” Small businesses have the power to alter the playing field in their favor. It is not size that puts them at a disadvantage but rather the resources available. By outsourcing the logistics concerns to supply chain management companies, they are able to devote more time and effort towards the core business functions and thereby focus on things that are central to their profitability.

Outsourcing logistics functions can also help in expanding business realms beyond the conventional borders. By partnering with the right logistics provider, a small/medium size business can work through an intricate distribution strategy. This allows the company to grow and compete against the large scaled enterprises effectively and efficiently. This gives all businesses the level playing field to showcase their true potential across all ventures.