A supply chain management system (SCM) is a business partnership, more or less integrated, to allow for the continual flow of goods and services. The efficacy of supply chain IT systems and the expertise of the teams combine to determine levels of efficiency between despatch, delivery and end destination of the goods or services being transferred.
Supply chain automation helps improve product and service quality, reduce costs, allow for more transparent monitoring of operations and ultimately supports competitive advantage in an ever more competitive business environment. Lean manufacturing and specialisation make partners increasingly interdependent, interconnected and integrated to streamline productive activity and maximise capacity.
This last-minute supply web demands that all SCM activities are collaborative and support real time data exchange, in terms of sourcing, producing, planning, delivering and returns provision. However, with complexity in terms of size of businesses involved, shared resources can be challenging.
Background To Transportation in SCM
Every company and organisation have their unique in-house, or cloud hosted IT systems to manage the security, filing and safe transfer of data for the consistent flow of data and transport modes for goods and services. Many businesses are still working with ad hoc, legacy systems established over several years ago that have either become inadequate, may be creaking under the volume of business expansion, lack transparency, or may even be vulnerable to cyber-attack.
In the traditional transportation sector, larger companies have vertically integrated supply and distribution activities to optimise production and logistical control. However, many businesses increasingly outsource functions to smaller, more agile companies, creating complexity that demands technical innovation more than ever before to eliminate costly inefficiencies and human error in last minute operations taking place in a sophisticated regulatory environment.
Some smaller suppliers are likely to lack economies of scale and margins that allow for investment in sophisticated technically integrated software and hardware.
Nevertheless, concerns about quality assurance, transparency, added value, timely delivery and compliance mean that supply chain IT systems must evolve to include greater automation for greater competitive advantage of all partners concerned. Modern modular and customised supply chain management systems are, however, now available, making efficiencies available to businesses whatever their size.
Management in logistics and transport relies on effective supply chain management decisions that can be improved with enhanced data integration and machine learning, where specialist staff and machines collaborate to deliver best value. Operation control, such as who is responsible for elements of the supply chain, how and when goods are shipped, warehoused on route and delivered requires accuracy in demand forecasting. Real time and comprehensive data, offering deep and wide insight at a moment’s notice is essential to optimal planning. These business functions are all possible for any sized company with scalable and / or customised SCM systems.
Every step in a supply chain has to be agreed by partners quickly in regard to modes of transportation to be used, cost and timing. Carrier control and compliance responsibilities must also be resolved in advance of shipments. For instance, a dedicated transportation and logistics company may handle goods from pick up, through to final destinations delivery or stages may be divided between a range suppliers. Whatever scenario, customers must have confidence that there will be no hidden costs, service is timely and compliant at all times.
Information and Inventory
Information sharing and integration is crucial to the success of a modern supply chain. Communications systems and immediate data transfer means that those companies who offer end-to-end digitisation will add best value and secure transport contracts most often. Any changing costs and inventory levels must be available to all stakeholders concerned. Current supply chain IT systems allow insight into specific data about products, their transport routes, whether they are on schedule and effective customs management in order for businesses to better plan and communicate with customers.
The more compatible supply chain partner systems are, the more likely those businesses will choose to collaborate in transportation and logistical projects, because they have greater peace of mind that they have the information they need at a moment’s notice and they can see consistency of pricing and effective management across supply chains, however complicated these might be.