The most difficult challenges that most of the transportation companies need to face are dealing with the inefficiencies. Some of the contributors include poor route planning, empty miles, weather events, construction activity and missed delivery appointments.
Due to all of these inefficiencies, cost of fuel, labor and maintenance gets increased. Hence, this impact is faced by all the companies who are perhaps associated with it. So, in this article, we would talk about how real time transportation visibility can provide high ROI. Let us have a look:-
Top Line Revenue is increased
Two major areas where visibility can help organizations improve their revenue are:-
- Satisfaction of customer
You should understand that revenue is directly related to customer satisfaction. Hence, it is often tracked using the metrics such as net promoter score.
- OTIF delivery percentage
OTIF and revenue are co-related to each other. Hence, it plays a very important role in increasing the revenue of organizations.
# Improved OTIF
Freight Visibility can very well help you eliminate the OTIF fines. Hence, there would be a lot of savings in terms of cost. Likewise, you would get access to OTIF metric. Through this, you would know the orders percentage that has been fulfilled in-full and on-time.
As per the report that is given by Mckinsey, it is known that if the OTIF percentage is increased by 10%, then the complete revenue can be boosted to 1%.
Thus, we can say that OTIF percentage can have significant impact on your revenue. So, here are some of the ways OTIF performance can be increased with transportation visibility:-
- Exception is identified and resolved proactively. These include issue with warehouse processing, delay in order processing as well as shipment problems.
For instance, if the carrier who is supposed to pick the load is not on time, then in such a case it needs to prioritized. This is done at the facility such that departure happens on time.
- Getting the reason codes related to exceptions. In this way, analysis of root cause is done and changes are trigged. In this way, continuous improvement happens.
For example, about 20% loads are dead during departure. The reason is that the time of transit is inconsistent.
#Improved Customer Satisfaction
It is important that you let your customers self-service by sharing all the information that might be required. In the current time, all the customers want to know where their order is during each step.
So, for creating good customer experience, you can do a lot of things. These include providing them direct access to information, receiving the notifications for the order etc.
Thus, if customers are connected to their order information, then satisfaction and trust is built. This is especially true in the case when they know that the delivery date which is promised is met.
Moreover, the volume of calls at call center is dropped significantly as well. The reason is that customers can access the delivery information directly. Hence, in this manner, you can free up the resources and make your customers happy. This can be done by providing them with delivery updates in the real-time.
Employee productivity is improved
If a real time container tracking solutions is used, then life becomes quite easy for a number of organizations. Thus, data aggregation can be automated with just a single view.
Besides this, exceptions can be identified systematically and problem resolutions would be recommended as well. Further, the system logins would be reduced significantly. Hence, in this way, employee productivity would be improved.
Some of the other ways through which employee productivity would be improved are:-
#Roles Unification around the orders
If you want your supply chain to be on the same page, then order specific visibility needs to be done. You can do so by sharing the SKU and PO information across various roles during the operation.
So, productivity among the teams would widely improve if order specific shipment details are put forward. So, inefficiency due to email and phone tag would significantly get reduced.
For instance, planners would be directed instantly if any inbound shipment that contains important material which is needed for production is delayed.
#Exceptions are prioritized
An overflowing dashboard or email-box can be quite overwhelming especially when it contains a lot of exceptions. So, when the exceptions are prioritized, then synergies are created. In this way, organizations can focus on specific problems which are directly related to their business.
Transportation cost is reduced
One of the good aspects about real-time visibility platform is that the transportation time is reduced. Thus, with the help of visibility tools, the risk associated with supply chain performance can be systemically identified. In this way, workforce productivity would be improved. Here are some of the other ways it can help:-
#Demurrage and Detention
With visibility, you can easily understand the shipment movement that happens in the network. Moreover, you would also get to know about time-based penalties. Likewise, you would be able to avoid demurrage and detention charges.
For instance, you would be able to know the free time which is available for every container that comes in the yard. Hence, processing can be prioritized such that asset detention charges are minimized.
#OTIF Fines
You should understand that OTIF can severely impact the satisfaction of the customer. Besides this, OTIF performance is associated with penalties and fines. So, here are some of the things that you can do in order to minimize it.
- Early resolution and identification of the delivery risk. This can be done by coming up with Customer Delivery ETA.
- Understanding reason codes which are related to exceptions such that you can understand the root cause. Further changes can be triggered and analysis can be done such that continuous improvement takes place.
It is seen that 30% times late arrivals happens due to departures getting late from facility. So, make sure carriers come on time in order to pick up the load such that performance can be improved significantly.
#Smart Inventory Decisions
ETA accuracy alongside real-time visibility is important such that all the risks are minimized. For effective inventory management, it is important that you come up with consistent material lifecycle.
Thus, ETA combined alongside statistical insights regarding transit variability and transit times can assist the companies to adopt leaner footprint.
For example, if a transportation company has an understanding about statistical variability, then cost business decisions and safety stock risk can effectively happen.
#reducing the working capital
Working capital in supply chain is often something that is overlooked. So, if you improve this, then it can turn out to be quite beneficial for your organization.
It is seen that cash-to-cash cycle is important for a number of organizations. So, working capital of in-transit time can have a great impact. This holds true especially in the case of ocean shipments. Thus, supply chain leaders can have an impact on dwell time that tends to happen during transitions period.
For instance, if a company moves about 10000 containers in a year with value of every content being $75k, then it takes about 50 days to reach out to the final destination. Thus, if the transit time is reduced by one day, then $250k working capital as well as $2M in inventory can be saved.
Operation Efficiency is increased
One thing that is often overlooked when evaluating the supply chain performance is operational Efficiency. This holds true especially in the case of organizations assets that severally get impacted due to disruptions of materials.
So, if you want to have a good impact when it comes to asset utilization, then flow of material need to be controlled. But, the key is to make sure that production of product is not impacted by uncertainty in the material.
Line downtime that tends to happen due to shortage of material is one of the reasons production managers are not able to achieve production capacities. Moreover, equipment and labor downtime can also play a crucial role. But, material which might be needed for production can have a lot of impact.
For instance, if the production line is shut down, then it can cost manufacturer about $10k per hour roughly. So, operations boil down to supply chain performance on consistent basis such that the production can be kept running regularly.
If you take example of transportation industry, then dwell-time associated with fleet assets needs to be minimized. This is especially true once it comes out or in from a facility. Moreover, spotter truck needs to be utilized efficiently with the help of system directed execution. This can help out in the case of container tracking as well.
Final Verdict
Above are some of the ways through which real time visibility platform can provide you with high ROI. So, with the assistance of real-time visibility platform, efficiencies can be improved. Hence, you would be able to serve the customers in a much better manner. Moreover, delivery costs would be reduced as well.
So, if you are looking for real time visibility platform, then look no further than Tive Inc. You can contact us to know more about our platform.
