The supply chain is a crucial component to all product-based businesses. It’s a complex and unique process that has its challenges; however, many companies choose to partner with a sophisticated third party logistics provider to help determine solutions and optimize operations. Whether shippers insource or outsource their supply chain functions, many shippers experience similar supply chain pressures.
Hiring a Skilled Workforce
Supply chain is an in-demand industry with companies looking to fill logistics-related jobs at a rate of 270,000 positions per year1. These “behind the scenes” professions seem to go unnoticed, but these positions could hold immense opportunity for growth. Jobs within logistics are expected to grow 26% between 2010 and 20202. Skilled workers across the industry are also in high demand. Drivers, in particular, are needed as driver availability and retention continue to be main concerns. Companies in a variety of industries have turned to their 3PL providers to outsource their supply chain operations. Aside from managing inventory and increasing efficiencies, 3PLs also take on the responsibility of hiring and retaining the labor to run the operation. This exchange allows for businesses to focus on their core competencies while the 3PL manages their supply chain.
Faster Shipping Speeds
Continuing to meet customer expectations has been a top challenge for companies, especially as quicker delivery times becomes the norm. According to a recent survey from MHI and Deloitte, meeting customer demands for faster response times topped the list as a top challenge for shippers3. Guaranteeing stocked shelves and quick shipping speed is a growing concern. Customer experience is key, especially since 71% of consumers say that they have ended a relationship with a company due to poor customer service4. As companies continue to offer same-day and next day delivery options, customers are expecting faster-shipping speeds. It can be difficult to reach customers in certain geographic locations; however, having an optimized supply chain network can improve operations and meet expectations of customers in these areas. Reaching these customers begins with determining which mode of transportation would be optimal depending on the type of product being shipped as well as the destination and origin locations. Once that is determined, it’s important to holistically look at where a majority of the customer base is and ensure that there are distribution centers in place to support those populations. For instance, major distribution hubs like Southern California, Dallas, Toronto, and Pennsylvania’s Lehigh Valley offer benefits of reaching major populations and locations in shorter amounts of time.
Increased Supply Chain Visibility
Customer expectations have also broadened so that they too can have visibility throughout the shipment process of their goods. Visibility is something that shippers continue to want throughout the entirety of the product life cycle. With more information, shippers could better plan all stages of their shipments, better manage inventory, and improve customer communication. As customers are able to change their delivery within a small window of time; having the transparency to know where and how to manage their shipment can improve delivery processes5. Many logistics providers have technology to provide data on a product’s location and status. For example, refrigerated containers have the technology to read and manage temperature remotely.
Supply chains have gotten more complex as the world continues to undergo globalization. There are more avenues for companies to reach new markets and to access more suppliers across different countries. However, as the number of suppliers grows, managing a larger and more diverse supplier base and their supply chains can become increasingly challenging. A shipper’s supply chain is dependent on the success of their suppliers’ supply chains. They all need to cohesively work together to continue to meet demand. Communication and transparency between all stakeholders can eliminate risk and improve operations. Investing in supply chain software can improve scenario planning, communication, and traceability.
Supply chain operations are complex, with many moving pieces to accomplish the goal of reaching customers and meeting their expectations. Although there are various supply chain challenges that companies encounter, having the right partners, strategy, and resources can help meet and exceed customer expectations.