6 reasons why real-time visibility is important for supply chain execution

Feb 5, 2021
Supply Chain

Table of content:

In the context of an organization, better operational visibility is achieved by having access to better operational data, to support decision-making with analytics and to improve operational capabilities and customer service. Real-time visibility requires this information to be updated with high frequency, ideally to the second. It’s easy to imagine why this could be desirable.

It’s made possible by a network of IoT devices, able to track location data, as well as other types of data, and transmit it in real-time to powerful software platforms. Leveraging machine learning algorithms and sophisticated data transformations, predictive insights can be delivered back to users, such as highly accurate ETAs and anticipated delay notifications, or used to power new process automation to streamline operations.

IBM reports that 87 percent of CSCOs find it extremely difficult to predict and manage supply chain disruptions and 84 percent say a lack of visibility is their biggest challenge. In addition, Gartner found that supply chain visibility is the top funded investment initiative prioritized for 46% of organizations. This is no surprise, given real-time visibility offers significant competitive advantages.

Implementing a real-time visibility solution across supply chain transportation can unlock dozens of major organizational benefits, some more relevant to certain industries than others. Here are six common ways real-time visibility assists organizations with their supply chain transport execution.

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1. Increasing team productivity

There are a number of ways to quickly improve efficiency and reduce costs by leveraging the power of increased operational visibility throughout inbound and outbound processes. Many organizations experience a visibility gap when it comes to transportation. They know when a shipment is booked to be picked up and dropped off, but there’s no indication of actual or estimated times, or any status updates available during transit. For decades, transport teams have employed workers to manually follow up on deliveries in transit - a very time consuming and inefficient process. Not only do real-time visibility platforms eliminate the need for manual follow-ups, they also automatically warn of shipment delays, so transport managers have more bandwidth to focus on sorting out issues and mitigating associated risks.

2. Reducing transportation costs and carbon emissions

It’s been estimated that transportation accounts for around 60% of all logistics costs. The driving distance and time impacts cost as fuel and driver hours increase. Real-time visibility of road transportation, for example, collects information on routes taken, speeds and dwell times on sites, providing objective data sets for analysis. Dwell time analysis can be used to implement gain share models with carriers. By reducing the average dwell time both on loading and unloading sites, the savings can then be split between both parties. Dwell times can be reduced by pushing accurate ETAs to loading and unloading sites, to allow dynamic slot booking, since booked time slots are often not respected. This data can also be used to optimize routes and ensure carrier costs quoted are justified, which helps ensure transport costs are minimized. In addition, the data collected on time and distance travelled makes it possible to accurately calculate carbon emissions per kilometer for determining environmental impact. This is an important capability for supporting sustainability efforts as without being able to measure emissions, progress in reducing emissions cannot be appropriately monitored.

3. Measuring and improving delivery performance (OTIF)

Companies are faced with a lack of tools to measure delivery service levels when they subcontract carriers. However, in order to improve delivery performance it is necessary to reliably and accurately measure it. Many manufacturers and retailers don’t currently have solutions allowing them to obtain real-time information of their deliveries, and thus can not reliably measure their transportation performance. A surprising number of companies still primarily used traditional methods (telephone, fax, and email) to exchange delivery information with their carriers.

Faced with this lack of information, shippers developed and used their own tracking portals, and required carriers to manually enter information after each delivery.
These proprietary tools create a significant amount of work for carriers. In a medium-sized firm, data entry can take 3 to 5 hours per week. The data also lacks accuracy and objectivity for the shipper, since it is usually collected several hours after a delivery occurred. This lack of precise data makes it difficult to reliably measure delivery performance (OTIF).

Real-time visibility platforms collect objective transport operations data, including loading, unloading site arrival and departure times, dwell times and journey times, making it possible to accurately track carrier performance. Not only does this information provide the foundational data needed to improve processes, it can also help reduce litigation costs.

4. Increasing productivity through efficiency gains and streamlined communication

Shippeo has designed the only advanced process automation available for supply chain transportation. Supply chain ecosystem partners can leverage the singular portal to automate processes and prescribe collaborative workflows that guide users through taking actions aligned with best-practices. The automation of processes for workers, including for corrective actions in the events of exceptions, help to decrease inefficiencies, reduce administrative efforts and mitigate the risk of human error. The platform proactively communicates status and event updates with all stakeholders in real-time, to ensure everyone is on the same page. A dedicated web portal for shippers and carriers simplifies management and coordination, with customizable access management to ensure data is shared appropriately. All data that Shippeo collects, cleans, and calculates, such as transport ‘events’, location data, alerts and predictive ETAs, can be easily pushed back to a shipper’s systems, whether it’s a central control tower or supply chain management portal, or as notifications automatically sent via SMS, email or other channels using APIs. A public link to the order follow-up page can also be shared with an end-customer, for example.

In this way, the platform doesn’t just create value for a shipper. It also creates value for their partners and customers, both internal and external, improving customer satisfaction by better managing each party’s expectations. The value created for each ecosystem partner, enabled through the sharing of data, creates a RTTV ‘network effect’, helping to build trust and unlock collaboration opportunities for shared programs aimed at enhancements. In addition to improving overall efficiencies across the supply chain, the real-time communications, sent automatically, allow customer teams to take proactive measures swiftly and reduce any transportation risks, as well as their associated costs.

5. Ensuring quality and security of inventory and reducing safety stock

Real-time granular tracking of individual handling units, as well as their condition during transit, supports quality control and shipment security. Network-connected smart sensors receive objective data on indicators such as the temperature or humidity inside a shipping container or truck at any given moment. Shippeo’s platform can connect with such sensors, from various providers, where and when needed. This ability to identify and ring-fence shipments of handling units affected by quality breaches can help avoid recalls further down the track.

Real-time visibility of part shipments provides an added layer of security as well. In the United States alone, an estimated €25 billion worth of cargo theft is recorded annually, with an average of 63 cargo thefts per month. The technology makes it possible to establish safe driver ‘networks’ to coordinate rest stops in safe environments in the presence of other drivers to help protect drivers from criminals.

The real-time data also gives organizations the confidence needed to reduce safety stock. Shippeo’s ability to precisely track individual shipment handling units with granularity moving through the supply chain is not commonly offered by other RTTV providers. By providing precise real-time data, not only for each carrier but also for each loading and unloading site, Shippeo can provide a better view on the lead time, especially its standard deviation since this has a direct impact on the calculation of safety stock. Achieving better transparency and reducing the lead time required have an enormous impact on capital and storage costs associated with safety stock.

6. Providing end-customers with more operational visibility

Many manufacturers and retailers are facing new demands from their end-customers. These demands are driven by new practices adopted in B2C transportation (deliveries in less than 2 hours, precise follow-up of deliveries, etc.) and push companies to improve their quality of service at the delivery level. Currently, problems occurring during transportation (particularly delays) are known only several hours after a delivery occurs. In most cases, it is the end- customer themselves who alerts the shipper about a delivery problem. For the receiver, whether a store or a warehouse, this lack of visibility results in significant costs, such as those incurred to mobilize teams to load and unload goods.

In addition, depending on the situation, a large retailer’s warehouse may have no-show rates between 5% to 15% (i.e. deliveries that fail to arrive when promised). A lack of real-time delivery information also leads to customer service teams receiving numerous calls and complaints, and tends to erode the relationship between the shipper and the recipient or end-customer.

These six areas of benefit that real-time visibility provides to organizations are only the beginning. New capabilities and use cases are being developed all the time as Shippeo continues to innovate in collaboration with customers on tailored solutions.

To learn more, get in touch with our expert team or check out one of our ebooks:

6 reasons why real-time visibility is important for supply chain execution
6 reasons why real-time visibility is important for supply chain execution
6 reasons why real-time visibility is important for supply chain execution

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