Supply chain disruptions are now a regular part of freight shipping, but they still dramatically impact the supply chain network. When it comes to manufacturers trying to get key parts and materials for their products, each disruption makes a big difference. Many times, these parts are shipped from around the globe, with containers often delayed by slow steaming, stuck at ports or worse. What can manufacturers do to minimize these disruptions on their supply chain? We broke down the best practices for manufacturing when it comes to ocean freight shipping.
Utilizing a sophisticated end-to-end visibility solution is the foundation for many other strategies that can make your supply chain more resilient to disruptions. Ocean shipping is typically not the only mode utilized by manufacturers but part of a multimodal journey. It is important to use a visibility solution that uses door-to-door tracking, not port-to-port — more specifically, having a single pane of glass for your tracking, real-time connectivity for each leg of the multimodal journey and predictive ETAs that are more accurate than carrier ETAs are critical. In turn, manufacturers can know exactly where their raw materials are in the shipping journey and when they will arrive, allowing them to fulfill their orders faster and more efficiently.
One metric key for manufacturers is time to recover. “The ability to measure the days it takes to return to normal after a disruption is a big deal,” said Todd Simms, VP of Industry Solutions at FourKites, “How do I continue to narrow that variation? It could be a competitive advantage, it can enhance customer experience. With greater transparency, you can do that.”
One way is by proactively addressing delays, not reactively. End-to-end visibility solutions provide a vast amount of data and information and using the data to act quickly is extremely important. In the case of ocean freight shipping, managing ocean exceptions proactively allows you to minimize the impact of delays or disruptions to your overall supply chain, increasing your product availability and customer satisfaction as well as decreasing your dwell time and time to recover. Reducing time to recover by days or weeks increases the time available to market the product and gain competitive advantages.
With the number of disruptions happening on a regular basis, there is no way to avoid them completely. Another best practice for manufacturers is optimizing your existing network — carriers, lanes and ports. Shippers can look at the network’s historical performance, especially during times of disruptions to see the impact of these disruptions. For example, FourKites looked at the Australia and Montreal-based labor strikes and the potential impact on shippers in the Western US ports if another strike would occur. In the case of the Montreal labor strikes, during the strike, the average dwell time in days at that port increased by 50%. By understanding and analyzing this performance, shippers can see poor performing or risky areas and make changes accordingly. Another thing to consider is the number of suppliers you are using. While diversification is important, especially during disruptions, it also leads to weaknesses in your supply chain network. By analyzing the historical performance of these suppliers, you are able to optimize the best ones for your unique supply chain.
Simms also recently spoke about a new trend in the manufacturing space, going regional. This hub-and-spoke model consists of a headquarters supporting multiple regional manufacturing facilities located closer to buyers and workers. When ocean chaos occurs, the time for recovery and costs are minimized with the regional approach as opposed to having increased dwell and ocean journey length by going to separate global facilities.
Labor shortages have been – and continue to be – a key challenge for manufacturers. With ocean visibility, shippers can reduce the guesswork of when inbound materials will arrive by tracking down the PO level, the most accurate predictive ETAs and real-time notification and alerts for the full end-to-end journey. Instead of scrambling when deliveries are early or very late, with this real-time information, operations teams can be more efficient in their labor headcount and operations planning.
What is clear is that supply chain disruptions will occur and reduce the agility of supply chain networks. With these best practices and by utilizing a sophisticated end-to-end visibility solution, manufacturers can limit their exposure to these weaknesses and improve their supply chain’s resiliency, agility and time to recover.
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