In this 3-part blog series, we explore the current state of supply chain digitalization and show how you can use a blend of people, processes, and technology to manage it effectively within your own organization.
When companies put the right amount of time, effort, and investment into their digitalization strategies, the rewards can be downright amazing. Enhanced data collection, better resource management, fewer manual tasks, and an improved customer experience are just a handful of the benefits companies see when they go digital. They can also improve internal and external collaboration; engage their employees (by giving them modern tools to work with); operate more efficiently; and improve their bottom lines.
Digital supply chains present even bigger returns for the companies that embrace them. They not only empower teams to more effectively forecast, plan, and source, but they also provide rich data that those teams can use to make better and faster decisions. With a single version of company performance (e.g., sales, efficiency, cost allocations, profit centers, etc.) on a dashboard that everyone can access, decision makers can readily identify supply chain bottlenecks, find alternate supply sources, and reassign transportation capacity to other carriers or providers.
Cost, Labor, and Sustainability
As a former Supply Chain Manager for GE, Ken Sherman knows a thing or two about what it takes to run a successful supply chain. As the current President of IntelliTrans, Sherman and his team help other companies better understand what goes into a successful digital transformation and then what they get in return for those efforts.
In most cases, the biggest benefits come in the form of lower costs, improved labor performance, and a more environmentally-sustainable business model. Sherman breaks down the three “benefit buckets” as follows:
- Lower costs of doing business. Supply chain digitalization can save companies substantial sums of money. With IntelliTrans’ Global Visibility Platform (GVP) in place, for example, companies can save millions of dollars without having to allocate significant time and energy to managing manual systems, moving data across disparate platforms, and attempting to get full visibility over their end-to-end supply chains. Much of the cost savings comes from having the right distribution plan in place, the best possible modes of transportation selected, the lowest cost carrier or route within that mode, and the right amount of product loaded into those various conveyances. Then, the platform helps those companies “execute flawlessly to minimize the amount of extra or accessorial charges that may be charged by a carrier,” Sherman says. “We saved one client about $3.5 million on a modal conversion project, and another in the plastics industry roughly $4-$6 million a year by getting more product in every hopper car that gets shipped out.” IntelliTrans has also reduced the demurrage fees by 37% for another customer that now has good visibility over scheduling, dwell times and other activities that generate demurrage fees.
- Improved labor performance and more engaged employees. Right now, there’s a lot of pressure on organizations to find workers in a labor-constrained environment. Once onboard, these employees expect to be able to use digital tools to do their jobs. What they don’t expect is to be handed a clipboard and seated at a hulking desktop computer to start their first day on the job. The digital workplace allows easier access to virtual meetings (something that’s gained in importance during the pandemic); removes the barriers of time, location, devices, and network connections; and increases productivity. Even better, when some of the expertise is embedded in the software platform, and not solely reliant on the user’s own knowledge, companies can get more done with fewer human resources. Employees can be allocated to more valued-added projects, versus having to constantly call carriers to find out why shipments haven’t been picked up or delivered yet. “Instead, employees can focus on the tasks that they were really hired for, and those centered on supply chain transformation,” says Sherman. “In addition, new employees can become effective much more quickly because the technology gives them optimal solutions and improved decision support that would otherwise requires years—if not decades—to master.”
- A more environmentally-sustainable business model. Digital transformation also helps companies meet a requirement that more and more of their customers, suppliers, business partners, and other stakeholders are asking for right now: a bigger focus on environmental sustainability. In fact, all eyes are on environmental sustainability as governments, organizations, and end consumers all pay closer attention to their carbon footprints. A sector whose greenhouse gas [GHG] emissions account for about 28% of the U.S.’ total GHG emissions, transportation is one area that’s ripe for improvement. For example, by using rail, companies can reduce their carbon footprint on a per-ton-mile basis compared to other modes. Or, using full truckload, they can operate more sustainably than if they were to use less than truckload (which, in turn, is more sustainable than parcel shipping or airfreight). Using IntelliTransTMS, the only SaaS-based transportation management system that provides shipment execution and visibility across rail, truck, intermodal, barge, and ocean shipments, companies can choose the modes that help them meet their sustainability goals.
Combined, these three benefits help companies work smarter, faster, and better in any business conditions. “By helping our customers reduce their costs, enhance their employees’ success, and improve the sustainability of their companies through carbon footprint reduction,” says Sherman, “we deliver lot of value via our digitalization technology and related services.”