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2023 Is the Year to Rethink Your Supply Chain Planning

Smart and efficient supply chain planning is now more important than ever. Find out why 2023 is the year to optimize and customize your transportation network.

Confidence is building again among supply chain managers. After two years spent triaging different combinations of material shortages, high prices and shipping capacity constraints, there’s a sense that things have gotten back to normal and are under control again.

In one example of this new attitude, Hasbro CEO Chris Cocks told the Wall Street Journal, “We don’t feel like we’re going to have that issue again,” referring to supply chain-caused product delays. “We feel like we’re pretty well ahead of our supply chain issues, and the capacity of our vendors is good.”

But that doesn’t mean it’s time for shippers to set their supply chain planning on autopilot. Just the opposite: “We don’t feel like we’re going to have that issue again” sounds like so many famous last words to us. With conditions easing, now’s the time to optimize and customize your network so that next time plays out differently than last time.

Here are some suggestions every enterprise should consider:

  • Audit your transportation network. Many organizations optimize pricing by lane and yet fail to achieve overall network efficiency. To see the big picture, look to your recent RFPs for volume, frequency and pricing information. Look for areas to combine efforts across organizational / departmental boundaries and between carriers. Are there areas where freight could be consolidated or shifted to lower cost transportation modes, such as from airfreight to ocean, road or rail? 

For the benefit of your supply chain planning, it can be helpful to engage a third-party organization to gather and analyze this information.

  • Custom-tailor your transportation. Every supply chain is as unique as a fingerprint. So, why does so much shipping look the same? We’re big fans of commodity transportation and integrators when they make sense. Sometimes, though, they’re only part of the solution. Consider dedicated or contracted carriers where volumes and requirements dictate. The big surprise here is that “custom” doesn’t always mean expensive. A smart and efficient network solves for resilience, availability and efficiency.
  • Swap spot rates for contracted carriage. It may sound counterintuitive, but spot rates end up being more expensive than contracted rates over the long term. It’s like the stock market, we explained in a recent blog post: Day traders can brag about their big score on any given day, but over time it’s the long-term investors who end up with the most gains.
  • Think differently when it comes to inventory. The capital required to hold goods is among manufacturers’ biggest costs. Imagine what it could do to your organization’s balance sheet if you could shave just one day of inventory off the bottom line. That urgent need to fulfill orders can also lead to expensive emergency shipping and lost opportunities for strategic sourcing. 

So, a better inventory approach helps both finance and transportation costs. Check out innovative approaches, including our own Inventory On Demand™ third-party inventory ownership solution, and our supply chain finance capabilities in partnership with Taulia, the industry leader in supply chain fintech.

  • Implement or improve your control tower. The right technology can help you stay on top of spiraling supply chain complexity as you manage day-to-day operations and gather data for improvements. Platforms like our own ChronosCloud™ have become integral tools for smart supply chain planning by synchronizing information across the supplier base and integrating data from real-time freight sensors. 

That’s only half of the control tower solution, though. When was the last time a piece of software solved all your problems? The best control towers combine both software and human savvy. In our practice, we use cutting edge technology as well as a team of experts who can turn information into insights and action.

So, if you thought 2023’s calm and boring conditions might bring you the opportunity to catch your breath, think again. There’s more to do than ever. And, if you need some experts to help you with your supply chain planning, contact us for a free consultation. We would love to learn about your challenges and goals.

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