Optimization is a philosophy, not an end point. Logistics professionals should always strive to be more efficient and optimize every node in the supply chain. In the first of our two-part series, we look at challenges with supply chain inefficiencies and data standards and how to combat this.
Vehicle visibility – the importance of the supply chain
A well-functioning supply chain should be not only practical but also efficient. When companies select supply chain performance metrics, they usually consider the obvious: time, cost, quality, and customer satisfaction. Metrics for on-time deliveries and processing purchase orders reveal operational effectiveness. Cost-related metrics, such as inventory carrying costs, show how efficient the supply chain setup is while identifying where companies can update, improve cash flow, and make the business more profitable. Quality and customer satisfaction go hand in hand; quality helps to assure customer satisfaction and brings all the other metrics full circle. Everyone wins when supply chain efficiency becomes more sustainable, but doing so requires conscientious effort, evaluating these metrics in real-time. These problems need to be understood when they happen, not weeks or months later.
Challenges like lack of visibility, accountability, and business intelligence come down to lack of trust and costs. The efficiency of operations directly impacts the quality of work the company does. If things take longer, there are more errors could occur. Inefficiency in business administration also creates real risks for all companies; compliance issues in business operations can be costly. Strategic decisions require an accurate, up-to-date picture of the entire organization. An efficient supply chain provides a competitive advantage, making the process seamless. Companies need to develop and enhance proper data communication, visibility, reliability, predictability, mitigate risks and optimize costs.
Solving supply chain problems through data communication
Data standards have been around for decades to simplify business-to-business communication. The electronic data interchange standards are the most known, but application programming interfaces have recently become essential in B2B data sharing. One of the biggest challenges of standardization is the “gap” between the old legacy technologies and these new cloud-based applications. However, multiple data standards should not be an issue as long as we have a “translator” to ensure we can understand each other. Moving forward with digitalization in our industry, these standards and data integration technology will need to work together. As dated, on-premises systems are prisoners of their standards and most likely will not adapt to the new ones; it’s essential to have the available solution to work around these.
Ideally, a committed support team manages the systems to provide clean and accurate information by validating data and resolving issues. This results that only reliable and relevant data being utilized in business decisions. To sufficiently solve these challenges, a proper Solution Provider serves as a communication hub between OEMs and LSPs, connecting all parties in the supply chain ensuring end-to-end visibility all in one place. It works with all the different file formats, taking in a wide variety of data from multiple sources and integrating it into one database to allow users to make effective decisions based on consolidated, real-time information.
Businesses cannot run efficiently without seeing what is happening at each stage of the value chain. We all know the Amazon effect and the ever-growing demand to see our ordered product; however, this is only one aspect. The other is that the information provided by end-to-end visibility can improve your entire operation and make it possible to scale your business. It can give you more control, better communication, improved ability to respond to demands and resolve issues proactively. The need to deliver products to B2B and B2C customers in the most sustainable way will only increase in the future – direct vehicle deliveries to customers will only increase the need for even better visibility.
Contact ICL Europe – your partner in finished vehicle supply chain optimization, for more information on how we can help your logistic reporting needs.
In the second part of the series, we will discover more optimization possibilities, utilizing the power of a seemingly exhausting administrative activity, the Freight Audit & Payment, and more about the future of digital solutions within finished vehicle logistics.
Sándor joined the ICL team in September 2020, intending to define our future within the automotive sector within Europe. Sándor is an expert in logistics process management, process improvement, logistics network planning and optimization, logistics services procurement. He also has a background in production management and logistics, with almost 20 years of work experience in the building and automotive industries.