The benefits of real-time transportation visibility solutions for supply chains are becoming more widely understood and appreciated across many industries and geographies. However, some of these benefits can be difficult to quantify which in turn can make building a business case and estimating a ROI challenging. Gartner has released a guide to help supply chain leaders develop their business cases, detailing four key recommendations.
The first recommendation in building an internal business case for a visibility solution is to look inward across functions and outline your operational objectives. Real-time transportation visibility can bring many benefits to multiple parties throughout your supply chain. Firstly, customer satisfaction levels are improved by proactively sending notifications on delivery statuses in real-time. With less time spent chasing various personnel for status updates, teams can spend more time on value-added tasks. Savings can be made on OTIF penalties. Based on end users’ conversations and use cases collected by Gartner, visibility solutions can reduce detention and demurrage fees by 25% on average. Capacity is increased thanks to more efficient dynamic operations based on accurate ETAs. Inventory levels can be reduced with lower safety stock requirements. Finally, collaboration between suppliers, shippers, receivers and carriers can all be greatly improved. Gartner notes that “From reduced detention to filing empty miles, these collaborations can be quite effective in improving the supply chain across all pieces.”
Gartner outlines three phases of ‘maturity’ that represent the degree to which a real-time transportation solution’s benefits have been fully realized. Some organizations require only basic visibility and predictive ETAs, whereas others may want to achieve more efficiencies through automation and enhanced multi-company collaborations. The latter may be more complex to implement but can also unlock greater ROI, with the potential to generate even more efficiencies and cost savings through optimized cross-functional operations. These considerations may lead to a more phased approach being recommended.
Having a visibility project green-lit can heavily depend on how benefits are pitched to stakeholders. Throughout the chain, shippers, receivers, suppliers and carriers can all benefit from greater efficiency, customer service, capacity and lower costs. When quantifying the benefits for an organization, it’s recommended they also be quantified for other supply chain stakeholders to boost project buy-in. According to Gartner, this is especially important for carriers, as the key to success in a RTTV project is carrier adoption and implementation.
The final recommendation summarizes how all of these benefits can be quantified, suggesting that teams need to be assembled to explore existing data available to determine which benefits can be measured and explain any non-quantifiable benefits as well. Both can help leadership teams understand the need to implement an RTTV solution. To produce an ROI, all relevant costs must also be obtained and taken into account, including both vendor and internal costs. Once all of this information has been gathered, the calculation can be made.
At Shippeo, our teams are dedicated to helping you kickstart your visibility project. We’re also proud to have been recognized as a Representative Vendor in the Gartner Market Guide for Real-Time Visibility Platforms for a second consecutive time. Having worked on dozens of visibility projects for international organizations, we can help you quantify the many benefits for your business case and assist in demonstrating their value to different stakeholders. Get in touch with one of our experts today.
How to Assess the Benefits and Return on Investment of a Real-Time Transportation Visibility Platform
By Analysts Carly West, Bart De Muynck
Published 13 May 2020 - ID G00723219
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