How often do you think about collaboration in logistics? Supply chain professionals and executives claim they think about collaboration all the time. But despite their best efforts, they continue to use dozens of platforms to manage what was supposed to be a simple concept. The reality is that the grand promises of more efficiency, visibility, and collaborative infrastructure that were made by software vendors have been lost due to the hassle of logging into countless systems and trying to manage data across disparate supply chain platforms. Meanwhile, the C-suite continues to beat the drum in the hopes of finding a way to leverage automation and solve the challenges inherent in a digital supply chain. To that end, shippers, freight brokers, logistics service providers (LSPs), third-party logistics providers (3PLs), and carriers need to know why collaboration in logistics is the future of all successful supply chain strategies.
The Challenges of Supply Chain Management Led to the Need for More Collaboration
It’s possible to talk for days about the challenges experienced in the average supply chain at the height of digitalization. However, the easiest way to look at and compare the challenges in modern supply-chain is to think about the grocery supply chain. According to Naveen Poonian of Supply Chain Brain:
“A model developed by the Council of Supply Chain Management Professionals for grocery packaged goods determined that collaboration between a retailer and the top two or three brands in each of 25 categories could yield a 4% increase in the grocer’s EBIT. Far too often, however, such efforts fail.”
Minor problems, such as “improper inventory levels, differing product codes, conflicting administrative arrangements,” create a sense of isolation for each trading partner. When these problems are not corrected immediately, distrust builds. Buyers see the event as a zero-sum game, and they grow hostile, willing to sacrifice their own efficiency in the hopes of beating their competitors. That’s the irony that lies at the heart of lacking collaboration.
Collaboration in Logistics Aligns Supply Chain Business Objectives
Collaboration in logistics is the natural climax of digital transformation in the industry. As companies have built new technologies and services that leverage automation, trading partners should see a tangible, forward-looking benefit in their operations. Moreover, the modern consumer expects a digital experience, and that applies to both business-to-business (B2B) and direct-to-consumer (D2C) transactions. Without the proper level of collaboration in the supply chain to enable efficiency so professionals may focus on more strategic initiatives versus being mired in the weeds of process, customers are likely to see higher prices and choose to take their business elsewhere. Without collaboration between suppliers and carriers, customers may find their most desired items are out of stock or they have a disjointed buying experience due to an inefficient supply chain that does not align itself to the enterprise’s core business objectives.
Collaboration effectively outlines the supply chain business objectives between parties. It keeps everyone on the same page, and when applied to the consumer side of the equation, collaboration can create an immersive, digital experience.
For example, John Smith visits a retailer to purchase a printer for his home office. The retailer has 10 models to choose from, but John is still not sure which model will best help him succeed. He turns to the Internet, searching for model functions, benefits, and reviews online. He uses his phone’s QR code reader to rapidly search for information about each product that sits on the shelf, and he finally makes a decision. But alas, it is not the exact model that’s on the store shelf. So, he chooses to order online from the e-commerce storefront for the retailer in which he stands. That decision triggers a series of actions in the supply chain, such as reordering the model from the supplier, developing an immediate, optimized route to get the freight to that store or the customer’s home as quickly as possible, and notification to the supply chain parties involved to avoid overlooking the shipment.
It sounds like an insane flurry of activity, and that’s because it is. The modern supply-chain is complex, and a single transaction can involve dozens of supply chain trading partners, systems, the need to login to another platform to track a shipment, and more. Obviously, the store manager or staff could have ordered the “not on the shelf” printer for John and managed the whole process in a more manual way, but at what cost? With a supply chain network built on a single pane of glass that enables collaboration and visibility, the whole process can be fully automated and generate a strong ROI for the company.
Additional Benefits of Unified Collaboration in Logistics Via a Networked Platform
Collaboration carries many more benefits in addition to optimized customer experience and a tangible ROI. Every trading partner is technically the customer of their B2B partners too. In today’s age, everyone wants the fastest, most affordable product, and unified collaboration in logistics can make that possible. Unfortunately, too many platforms in use and the need to manage them all result in wasted time and energy—costing the supply chain invaluable resources. But as explained by Ed Rusch of Talking Logistics, this changing face of the supply chain world carries immense potential:
“The supply chain has stepped into the collaborative platform era: an era that connects different stakeholders and applications mobilized throughout the distribution chain to create smooth-running operations, and physical and information flows.
Information sharing has a primary impact on improving the level of trust that business partners have with one another – and collaboration gives each constituent the power to limit the number of financial, business, and operational risks and keeps jobs on track. When everyone is working together, operational transparency and efficiencies can drive results to new levels.”
With collaborative platforms in place, supply chains realize more visibility into every transaction. They see more data and can make proactive decisions to improve efficiency. By unifying supply chain platforms into one resource, they can finally attain all the benefits promised without the hair-pulling ire of keeping track of 25 logins, hoping you re-entered the data from the TMS into the WMS correctly, and every other possible opportunity for waste.
So that’s it. The biggest benefit of collaboration in logistics is clearly less waste, which is just another way to say more efficiency, more savings, and faster processing.
Realize the Real ROI of Your Tech Stack Wrapped up With a Radically Collaborative and Transparent Platform
It’s time for your organization to become part of the solution and stop wasting your time and resources on the “super-efficient”single pain-point solutions on the market that only offer a limited access point to manage logistics and “okay” collaborative visibility. Your enterprise needs a truly unified tech stack that brings in the data from your WMS, TMS, YMS, returns management system, procurement platform, and any other SaaS platform you’ve decided was necessary. It’s time to see everything in a single pane of glass, letting you manage the whole logistics process with fewer clicks, less intervention, and automated processes that optimize everything, everywhere, every second. Turvo can help you achieve that goal offering a collaborative logistics platform that connects your customers, carriers, employees, and systems to streamline the shipment lifecycle workflow from order-to-cash. Reach out to our experts and find out what Turvo can do for you.