How data, visibility, and technological advancements play key roles in optimizing your supply chain’s operational and market efficiency
Before diving into some of the top megatrends for the Supply Chain and Logistics industry, it would be relevant to point out the difference between a “trend” and a “megatrend”.
As opposed to its short-term counterpart, a megatrend is a long-term business strategy that will shape the global supply chain and logistics industry landscape affecting policies, decision-making, market behavior, data gathering and analysis as well as the highly evolving technology in the years to come.
In recent years, data and visibility are probably two of the main buzz words circulating across businesses including the freight forwarding industry where these lead to greater market and operational efficiency with the right implementation.
Bernie Hart, VP Customs & Trade Business Development, Flexport provides a concrete example on how data and visibility are relevant from a freight forwarder and importer perspectives:
When you think about a supply chain, whether you're a freight forwarder or an importer, it really is a closed-loop process. You have an importer who's a buyer and an exporter who's a seller in a transaction. Before you even document, the starting point is the purchase order. When you're striking that purchase order, you really need to understand in today's megatrend, what is the true net landed cost on this?
You need to have access to all the data and information for those sanctions, duties, taxes, and fees for what your freight is actually going to cost you in today's environment and do that predictive analysis right upfront. Then you want to match that with your actual landed cost, what it actually costs. You look at the difference between the two and then gradually sweep, shrink that variance over time. It's going to be the businesses that have the capability to be able to do those ‘what-if’ scenarios and can do that predictive net landed cost that are going to be the ultimate winners in this and have the most flexibility from an overall supply chain perspective.
The industry expert sees an unprecedented need for additional data and information, which starts with the purchase order. From a supply chain perspective, mostly every company has a New Product Information (NPI) process from developing a new product idea all through the rollout of the final product. Hence, as a supply chain partner, freight forwarder or customs broker, it would be advantageous to gather that early-stage information as soon as possible.
The benefits of having first-hand information enables multiple parties involved in the supply chain process to minimize the amount of exceptions that happen in the customers’ supply chain thereby improving the overall cycle time and cash flow by having an overview of duties, taxes, fees, and having a deep understanding where they can be leveraged in today’s supply chain.
There has been a stress on the need to be more digitized and Bernie Hart encourages the use of a product library, which can be used to export and import products that minimizes exceptions in the overall process and serves as a source of truth. When you start ingesting data like a commercial invoice, packing list, and bill of lading, you’re actually digitizing that into the platform and check that data against what's in the product library for consistency and accuracy. It demonstrates reasonable care, but also establishes a very sound compliance program and identifies any discrepancies right upfront.Hence, you can get those work done so that it doesn't become an exception as your supply chain is actually executing because you don't want your product actually show up at the port and then find out it's missing data and information.
Jack Chang, Managing Director, JUSDA USA also shares some logistics and supply chain solutions revolving around the use of sensors to be able to capture information having 5G within the four walls that allows to pin point accuracy within centimeters or inches of where a product is placed. This enables faster cycle time counting of product once it hits the four doors of a physical warehouse to get better visibility. How to get the product out once it's actually into a particular warehouse, hub or distribution center is one of the megatrends seen today, and where others are starting to invest more heavily in.
Since a lot of companies have back offices, the ongoing challenges when the COVID-19 pandemic surfaced affected many of those back offices given the lengthy lockdowns and really pinpointed the vulnerability towards the supply chain and the use of manual outsourcing.
As we look further into the ongoing investments on the Robotic Process Automation (RPA), we learn how computers get smarter, its ability to capture requirements, bring that to a customer service or account manager, who will be able to digest those information and feed it back to the customer.