Get Gartner’s ROI Toolkit for Real-Time Visibility Platforms
A valuable tool for supply chain leaders who are evaluating the benefits of visibility solutions and want to develop a business case for their company.
In a rapidly mobilizing world, visibility is no longer an unproven sector of logistics technology. Now, real-time transportation visibility is table stakes for any successful supply chain.
As the software category continues to advance, the earliest adopters of visibility technology are achieving considerable returns on investment, while more conservative companies are – now more than ever before – actively evaluating the benefits of such platforms.
In a guest appearance at FourKites’ 2020 Supply Chain Sustainability Virtual Summit, Gartner Research VP Bart De Muynck described the rapid adoption of visibility technology that is already sweeping the supply chain space.
“I focus on all the different technologies for supply chain management and fleet management, and this is by far the largest area of growth that I’ve seen in any technology. If you look at 2019 across Gartner, across all different technologies, visibility has been the number one area where people have started investing.”
– Bart de Muynck, Research VP, Transportation Technologies, Gartner
FourKites created the real-time transportation visibility software category back in 2014. Now, the company has the largest network of visibility data on the planet, with more than 400 of the world’s leading brands among its customers, and 1 million shipments and $1 billion in freight in the platform at any given time.
These strategies have already enabled some of the world’s largest shippers to realize results such as:
- Saving $300K-$500K per month on fines and penalties
- Enabling collaboration to improve capacity by 4% throughout the industry
- Slashing annual penalties by $600,000 per year, or 22% over previous years
- Reducing detention costs by $10 million annually through proactive monitoring, corrective action plans and using FourKites’ data to validate charges
8 Ways to Maximize Your ROI with Supply Chain Visibility
Now, for the first time ever, we’ve taken those tools and strategies and put them all in one place. In this primer on maximizing supply chain ROI using real-time transportation visibility, you’ll learn how to:
1. Revolutionize Supply Chain Customer Service
Track-and-trace and other customer service teams are plagued with responding to phone calls, messages and emails centered around answering one simple question: “Where is my shipment?” Unfortunately, finding an answer to that question is anything but simple.
One of the first areas where customers see real value from their transportation visibility solution is in eliminating endless hours of phone tag between the carrier, driver and customer service. Instead of waiting on a call back for a single location update, companies can now have instant answers at their fingertips – saving time, money and, most of all, peace of mind.
Some of the biggest opportunities for ROI in customer service include:
- Reduced phone calls and emails, leading to more responsive customer service
- Improved relationships with customers and upstream suppliers
- Improved end-customer operations – driving more future business
Study In Success: C&S Wholesale
How did C&S Wholesale Grocers, the largest wholesale grocery supply company in the United States, use FourKites to reduce transportation-related customer service calls by 65% in just four months?
By deploying FourKites’ software to key user groups throughout the organization and prioritizing subject matter expertise in supply chain visibility, C&S molded the FourKites platform into a digital twin of the company’s entire supply chain. They created more than 8,000 custom geofences designed to replicate real-world facilities, and conducted deep technical evaluations of their major carrier integrations to identify gaps, measure compliance and ensure accurate delivery of data.
This combination of big-picture thinking and minute attention to detail gave C&S the ability to instantly find the information they needed as soon as the dreaded “Where’s my shipment?” question arose.
Learn More: Watch this video to hear how C&S uses visibility to improve customer service
The Supply Chainiacs Talk Customer Service
Customer service is one of the most critical issues facing supply chain leaders today. Join Glenn and Chris as they discuss how innovative shippers are tackling this challenge and delivering over-the-top service to their customers.
2. Optimize Labor Planning Through Better Visibility
Labor planning is essential for every supply chain, and hiccups in arrival times can cost big in wasted labor. Warehouse teams tasked with loading and unloading trucks are reliant on those trucks actually showing up on time for their scheduled load, and delays in transit make it challenging for warehouse managers to plan labor for each shift.
Meanwhile, track-and-trace teams spend countless hours playing phone tag with drivers, carriers and warehouse managers trying to track down their trucks. With a real-time visibility platform, track-and-trace teams can be reallocated to more value-add work streams, as check calls are no longer required.
Using real-time visibility, supply chain managers can:
- Automatically alert teams to inbound loads and delays
- Optimize dock and warehouse staffing schedules
- Streamline communications to build a more agile workforce
- Identify sites with large bottlenecks and inefficiencies
- Correct carriers with recurring performance issues
Real-World ROI: Reducing Labor Costs
Leading paper and packaging company Pixelle has seen a drastic reduction in track-and-track calls as a result of leveraging FourKites to track its loads.
“Email, as it pertains to track and trace, has been almost halved in terms of what we see on a daily basis. Between what we see in our customer service group, our load planners and our carriers, it’s been a great efficiency for us.”
– Brad Shockey, Director, Order Management Specialty Papers | Pixelle Specialty Solutions
PetSmart, the largest specialty pet retailer, uses FourKites’ real-time visibility to identify the cause of disruptions to store operations and minimize their impact on staff productivity. In partnership with FourKites, PetSmart is also able to dedicate more associate hours to the valuable task of improving the customer experience with pet parents, instead of waiting at the loading dock.
“We want to make sure that we’re providing an opportunity for our store associates to be the trusted partner for our pet parents and not have to think about when their delivery is going to get there.”
– Dawn Goudie, Senior Manager, Supply Chain Service Center, PetSmart
The Supply Chainiacs Talk Labor
Labor planning and management is a challenge that many supply chain leaders face. Join Glenn and Chris as they discuss how innovative shippers are tackling this challenge by eliminating wasted time and spend.
3. Improve OTIF Compliance to Minimize Fees
In recent years, large retailers have begun imposing fines upon their suppliers for shipments that arrive late or early, or that don’t meet the order requirement “in full”. These fines can vary from 3-5% of the cost of goods sold, and it is common for companies to spend $10M-$30M per year in fines alone.
What’s more, in industrial supply chains and other “just-in-time” manufacturing models, losses can also result from downed lines or crews scheduled around shipment deliveries.
While legacy operations simply consider these penalties a cost of doing business, digitally savvy supply chains are increasingly leveraging real-time visibility platforms to proactively identify at-risk loads in order to to avert delays and avoid fines.
When they take proactive measures, the rewards can be great:
- Within 1 year, Smithfield boosted its on-time delivery rate from 87% to 94% using FourKites’ real-time visibility technology
- By emphasizing better visibility and supply chain agility, one of the largest food producers in the US upped its OTIF score by 5 percentage points over 12 months
- The fresh logistics team at one of the largest supermarket chains in America used FourKites to get item-level insights on ETAs for fresh produce items, extending visibility beyond day-of deliveries. This advanced visibility enabled the team to report any delays to merchants that might impact item inventory for end-customers.
The Supply Chainiacs Talk OTIF
On-Time and In Full (OTIF) is a focus for many supply chain leaders today. Join Glenn and Chris as they discuss how innovative shippers are tackling this challenge and reducing the penalties and fines associated with missing the mark.
4. Minimize Dwell Time and Slash Detention Costs
Drivers hate detention because it counts against their hours of service and lowers the number of billable miles available each day. Shippers hate detention because it causes anywhere from $1M-$10M in annual, controllable waste. Until you consider the technical challenges of overcoming detention, it’s surprising that such a widely disliked problem persists throughout the industry.
Better visibility allows stakeholders across all levels of the supply chain to collaborate to eliminate dwell times and detention costs worldwide. In a 2019 pilot study with McKinsey, FMI and others, FourKites found that cross-company collaboration is critical in reducing detention throughout the supply chain.
Best Practices: Harnessing Visibility to Eliminate Dwell
- Notify end-users of loads accruing significant dwell, allowing the user to work with warehouse operators to redistribute labor resources.
- Leverage analytics to monitor performance across shipping sites, customers, carriers and lanes.
- Experiment with different load types and complexities: Full pallets vs. layered pallet orders can have major impacts on load and unload times.
Having a single, unbiased system of record for shipment arrival times can significantly reduce disputes and help shippers achieve considerable savings on undeserved detention fees.
Real-time Visibility In Action
- In just three months, Land O’Lakes reduced median dwell time by 21% per load
- One of the largest meat producers in the US reduced their monthly detention costs by 22% within their first year of using FourKites, realizing a positive return on investment from detention savings alone within the first six months
- Smithfield uses FourKites data as a single source of truth for arrival times, enabling them to successfully challenge over 30% of detention requests per quarter
5. Manage Capacity Despite Global Shortages
Facility-level capacity and bottlenecks can wreak havoc on transportation planning with high detention costs and dwell times.
The link between reducing dwell and growing capacity is a strong one, as was made clear in 2019 when FourKites teamed up with shippers, carriers and other supply chain stakeholders to carry out a months-long study exploring the potential of a data-driven approach to dwell time reduction. At its conclusion, the pilot group determined that better, more data-driven dwell time management has the potential to improve available capacity throughout the industry by a total of 2-4%.
In fact, better visibility into capacity constraints is a primary reason why FourKites customers chose to invest in real-time transportation visibility solutions in the first place. Visibility allows companies to:
- Alleviate bottlenecks at delivery sites, suppliers or distribution facilities.
- Implement appointment scheduling solutions to help spread out truck arrivals.
- Eliminate deadhead through collaboration with like-minded shippers.
Pro Tips From Leading Shippers
One of the largest battery manufacturers consolidated their carrier base by 17% while maintaining capacity and volume in the year following their implementation, using FourKites to increase their freight buying power and manage capacity by prioritizing high-performing, high-visibility carriers.
One of the largest meat producers in the world used FourKites to consolidate their carrier base by more than 15% in their 2019 bid process, increasing their freight buying power and capacity access by prioritizing high-performing, high-visibility asset-based carriers.
6. Reduce Safety Stock Without Jeopardizing Production
Most supply chains maintain a certain level of inventory on hand during normal operations. This safety stock ensures that production can be fulfilled and customer demand can be met even in the event of a missed delivery or load. But it comes with a price tag. Some companies spend in excess of 20% of their gross sales on inventory carrying costs — costs that are highlighted on publicly traded companies’ balance sheets.
Real-world ROI: Streamlining Inventory Management Using Supply Chain Visibility
- Gain instant visibility into predicted arrival times of inbound shipments
- Improve working capital and decrease inventory carrying costs
- Identify inefficient ordering patterns and accurately update lead times
- Prevent line-down and out-of-stock costs throughout your operations
- Integrate directly with ERP, inventory planning and other systems
Study in Success: Network Visibility
Using FourKites’ Network Visibility, the planning teams at a leading national grocery chain gained the ability to reduce safety stock levels for vendors that were sharing capacity with other FourKites customers. Having access directly to the data created trust that arrival times of scheduled loads and rush shipments could now be predicted with confidence, paving the way for reducing safety stock levels without impacting availability.
Coke Consolidated wanted to know exactly when to expect products to arrive from their vendors into their distribution network. By tracking SKU-level details across both managed and unmanaged freight with Network Visibility, the company significantly enhanced its warehouse and labor productivity, improved in-stock positioning and provided its supply planners with a self-service option to find their hot loads.
7. Achieve Next-Generation Supply Chain Collaboration
The conduit to collaboration in today’s supply chain is often cobbled together using email, spreadsheets, phone calls and PowerPoint presentations. Without a single source of truth and no access to a unified communication stream, exceptions and events routinely lead to a scramble as employees seek to sort out the root cause. This leads to inefficient operations and necessitates that employees spend their time putting out fires, rather than focusing on higher value-add tasks.
Suppliers, shippers, receivers and carriers can all benefit from a unified data source, allowing them to improve their supply chain together. Additionally, collaboration between organizations is an approach that leading companies are increasingly leveraging to maximize profits, eliminate waste and promote sustainability.
Facilitating Supply Chain Collaboration with Real-time Visibility: Lane Connect
- Through their mutual interactions using FourKites’ Lane Connect, two of the largest grocery wholesalers in the world identified an opportunity to collaborate on COVID-19 relief in the Northeastern United States, leveraging one party’s procurement advantages and the other’s private fleet to maximum effect.
- Land O’Lakes: After identifying the opportunity to share lanes using Lane Connect, Land O’Lakes decided to partner with one of the country’s largest grocery distributors, whose private fleet was able to pick up regional backhaul for Land O’Lakes between Ohio and Tennessee. The partnership resulted in cost savings of 20-25% for Land O’Lakes, and reduced empty miles for the wholesaler by 502 miles per trip, twice a week. This initial collaboration was so successful that both companies quickly began expanding to other lanes across the country, as well as exploring additional partnership opportunities with other major shippers.
8. Unlock Supply Chain Agility in Times Of Crisis
Bottlenecks, delays and disruptions are commonplace in everyday logistics management. Building a more agile supply chain allows shippers to respond to the unexpected, avert disaster and seize new opportunities despite the uncertainty inherent in the space. While it’s true that no one can predict all disruptions before they occur, having processes and technology in place that enable quick decision-making in the day-to-day supply chain is key to reacting faster and more decisively than the competition.
Better visibility data is foundational to understanding where a product is at any point in its journey. In the event of a crisis, supply chain leaders can leverage their visibility platform and instantly know which of their orders and shipments may be impacted, as well as which resources exist for contingency planning and recovery.
Even in day-to-day operations, supply chains that are both lean and agile will outperform their slower competitors. Knowing in real time where items are and what their disposition may be means that companies can make informed decisions on the fly, rather than relying on gut instinct or incomplete information.
The Value of an Agile Supply Chain
Using FourKites to track their outbound shipments, a global food manufacturer was able to respond quickly to rescue a product recall before it made its way to the end-customer’s shelves or — worse — the consumer’s table. After flagging the load in their system, the customer was able to call ahead to the delivery destination and have them send the truck back fully loaded.
Purolator International: When one of Purolator International’s Customer Relations Managers noticed that a truck was headed toward a different border crossing facility than originally planned, the company was able to proactively adjust its paperwork for the new border crossing facility, sidestepping a major delay in transit. Prior to using FourKites, this detour would have come to light only once the truck reached the border – or worse, when the customer called to ask why the delivery was delayed.