How to Maximize ROI with
5 Critical Ways Supply Chain Visibility Will Improve Your Business
The Ultimate Guide to Maximizing Value from Real-time Transportation Visibility Platforms. Learn how Visibility can improve Revenue, Productivity, Transportation, Inventory, and Operations.
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For most Supply Chain Leaders, the past few years have been a daily scramble to locate material and shipments. Whether it’s a global pandemic, regional slowdowns, or shipping mishaps, the disruptions don’t seem to end.
These disruptions have taught Supply Chain Leaders some hard-learned lessons — and now they’re taking action to face these daily challenges accordingly.
Supply Chain Leaders are refocusing on enabling resilient supply chains that can operate at lower costs while minimizing disruption.
This seems like a lofty goal but thousands of supply chains have already started this transformation using Supply Chain Visibility, a.k.a Real-time Transportation Visibility.
FourKites is a leading visibility software provider and we’ve put together this guide to help you chart your own supply chain transformation. We’ve collected best practices from working with 1,200+ of the world’s most recognized brands — and we’re sharing them with you.
In this comprehensive guide, you’ll discover:
- The 5 critical areas where supply chain leaders are driving real results
- The “steps to success” you can take to achieve maximum ROI
- Impressive customer examples to prove the art of what’s possible
How to Get Started with Visibility:
So, you’re ready to transform your supply chain and improve your business with visibility. Well, before you jump in, there are a few key areas you need to keep in mind in order to chart the most effective path forward…
- Understand the goals of your company
- Identify the right supply chain KPIs that align with those company goals. This will help you to prioritize the problems you want to address.
- Get organizational buy-in. Supply chain data isn’t just for the transportation team. To maximize value and ROI, your supply chain information should be shared and operationalized across the company.
- Okay, now you’re ready to jump in!
1. Increase Your Top-line Revenue With Visibility
There are two big areas where visibility can empower organizations to increase their top-line revenue.
- OTIF delivery percentage – There is a direct correlation between revenue and On-time and In-Full delivery percentage.
- Customer satisfaction – Revenue is also directly correlated to customer satisfaction, which is often tracked with metrics like Net Promoter Score (NPS).
Improved OTIF = Increased Revenue
We’re not just talking about battling OTIF fines — which visibility can also help you eliminate, creating tremendous cost savings. We’re talking about what the OTIF metric really represents: the percentage of your total orders that are actually fulfilled on-time and in-full.
McKinsey estimates that a 5%-10% uplift in OTIF% can result in a 1% uplift in revenue.
Improving your OTIF percentage directly impacts your revenue, here’s how best-in-class organizations improve their OTIF performance with visibility:
- Proactive exception identification and resolution, including: inventory risk, order processing delays, warehouse processing issues, and shipment problems.
Example: If the carrier arriving to pick up the load is behind schedule, then they may need to be prioritized at the facility to ensure on-time departure
- Capturing reason codes associated with exceptions to enable root cause analysis and trigger changes that drive continuous improvement.
Example: over 20% of loads are “dead on departure” because planned transit time is inconsistent with actual required transit time.
Using Visibility to Improve Customer Satisfaction
Let your customers “self-service” by sharing the information you have. Customers today want to know where their order is every step of the way. To create a great customer experience it’s critical to let your customers have direct information access, receive order notifications, and stay in-the-know at all times.
Customers love “self-service” information and you should too. Connecting your customers to their order information builds trust and satisfaction, especially when shown that their promised delivery date will be met.
Plus, companies across industries see a significant drop in call center volume when their customers have direct access to the delivery information. Free up resources and delight your customers by sharing real-time delivery updates.
- Now that you’ve invested in improving your OTIF and Customer Service — don’t keep it a secret!
- Impact your revenue even more by arming your sales team with these improvements. With these new selling points, asking for additional market share or holding price points to maintain margins becomes much easier.
A Study In Success: C&S Wholesale
C&S Wholesale Grocers, the largest wholesale grocery supply company in the United States, used FourKites to reduce transportation-related customer service calls by 65% in just 4 months. How did they do it?
C&S molded the FourKites platform into a digital twin of the company’s entire supply chain. C&S deployed FourKites’ software to key user groups throughout the organization and prioritized subject matter expertise in supply chain visibility.
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.
2. Improve Employee Productivity
A real-time visibility platform like FourKites instantly makes life easier for track-and-trace personnel.
- Automate data aggregation into a single view.
- Systematically identify exceptions.
- Recommend problem resolutions.
One immediate productivity benefit with FourKites is that you’ll reduce the number of system logins required to access information from 5 down to just one.
These tactical enhancements to improve supply chain productivity are great. But how can visibility impact productivity more broadly?
Unify roles around your orders
Get your entire supply chain on the same page with order-specific visibility. With FourKites, PO and SKU information can be shared and made visible across every role in your operation.
Putting order-specific shipment details front and center is a game-changer for productivity across teams. The inefficiency of playing phone and email tag across organizational silos disappears.
Example: Planners can be directly alerted when an inbound shipment containing critical material required for production may be delayed.
Example: Sales and customer service can be directly notified if an inventory shortage or warehouse pick issue puts a customer order at risk.
Prioritize exceptions as a team
Everyone knows the feeling of an overflowing email in-box or a dashboard so full of exceptions you don’t know where to start.
Exception prioritization helps create synergies across organizational silos so they all can focus on the specific problems that are the most critical to the business.
Example: Don’t spend even 1 minute worrying about that delayed inbound shipment when inventory is not even close to a minimum threshold… prioritize your time on the “at risk” inbound shipment that could result in an inventory stockout and missed customer commitments.
Real-World ROI: Reducing Labor Costs and Logistics Spend Visibility
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.
3. Reduce Transportation Costs with Real-Time Visibility
One of the biggest areas of Real-Time Visibility impact is in reducing transportation costs.
As we mentioned earlier, visibility tools can provide systematic identification of supply chain performance risk. And we talked about how that can be used to improve workforce productivity. But the impact doesn’t stop there.
Detention and Demurrage
With visibility you can understand the pulse of the movement of every shipment in the network. Combine this with an understanding of time-based penalties, and you have the ability to intervene and avoid detention and demurrage accessorial charges.
Example: understanding the free time remaining on each container that arrives in the yard helps prioritize processing to minimize asset detention charges.
We also talked earlier about how OTIF can impact customer satisfaction but OTIF performance is most often associated with fines and penalties.
Driving down these penalties requires the same two tier focus.
1. Early delivery risk identification and resolution by projecting Customer Delivery ETA as soon as a customer bound load is tendered for pickup, or even before, helps minimize OTIF fine occurrences. Even across a multi-mode movement.
Example: A coast to coast TL move with a “handoff” at the midpoint requires the tracking of multiple assets across separate legs and accounting for handoff processing time.
2. Capturing reason codes associated with exceptions to enable root cause analysis and trigger changes that drive continuous improvement.
Example: Over 30% of late arrivals are due to late departures from the facility. Ensuring that carriers arrive on-time to pick up loads and having loads slotted for processing will significantly improve performance.
Learn more about How to Reduce Transportation Costs with Supply Chain Visibility. Including: Controlling Planned Transportation Spend, and Reducing Accessorial Costs.
4. Effectively Manage Inventory with Supply Chain Visibility
During the COVID-19 pandemic shelves were empty and inventory was scarce. As a result, companies around the world ramped up ordering to meet demand. But as the pandemic subsided and demand slowed, supply chains were still seeing a significant inflow of inventory into the system, why?
This occurred because most planners lost confidence in their supply chain information during Covid. Companies were expecting a repeat of the previous years and proceeded to over-order — by a lot. This was a classic case of the bullwhip effect.
Now all that over-ordering has filled warehouses and working capital balance sheets to the breaking point. And it’s put Inventory and Working Capital Reduction to the top of supply chain leaders’ agendas.
Smarter Inventory Decisions
Restoring confidence in ETA accuracy with Real-Time Visibility has been critical to minimizing these knee-jerk reactions. Reactions that result in an excess of inventory — along with the associated freight expedite costs.
The ability to demonstrate a consistent material lifecycle is vital for effective inventory management. Now, post-Covid, an accurate ETA combined with detailed statistical insights on transit times and transit variability enables planners to move back to a leaner material footprint.
Example: If a planner understands that the statistical variability in moving material from Vietnam to their distribution center in Chicago, then they can effectively make safety stock risk/cost business decisions.
Reduce Working Capital
The biggest area of working capital is often the most overlooked: the overall velocity of material in the supply chain. Improving this can be a game changer for your organization.
Cash-to-cash cycle is a key metric in most organizations. Reducing the in-transit time of working capital can have a significant impact. This is especially true for ocean shipments. No, Supply Chain Leaders cannot make steam ships go faster, but they can impact the amount of dwell time that occurs during transitions.
Example: A company moving 10,000 containers a year with an average contents value of $75K taking 50 days from ownership transition at origin to receipt at the warehouse can save $2M in inventory, $250K in working capital, if they can reduce transit time by just ONE DAY (50 to 49 days).
Learn more about reducing inventory carrying cost.
5. Increase Operational Efficiency
Often overlooked when evaluating supply chain performance benefits is Increasing Operational Efficiency. More specifically, the utilization of organizational assets that are impacted by material disruptions.
Controlled prioritized flow of material into a distribution center will have a positive impact on asset utilization. But the real focus here is on ensuring expensive product production assets are not negatively impacted by material uncertainty.
Line downtime, or even a line changeover, due to material shortage or uncertainty is one of the key reasons production managers can never attain “theoretical production capacities”.
Labor and equipment downtime also play a big part but having sufficient material to run production on an optimal schedule has a large impact.
Example: Shutting down a capital intensive production line can cost a manufacturer $10K+ per hour, even a last-minute change in the production plan can cost $100s. Inventory definitely plays a part but lean operations depend on consistent supply chain performance and proactive exception management to keep production running.
A more transportation specific example would be minimizing dwell-time of fleet assets as they move in or out of a facility or the efficient utilization of spotter trucks with system directed execution.
Start Improving Your Business with Supply Chain Visibility
Stronger global supply chain management starts with FourKites. Contact our team to learn more.