Guide Digital Transformation for Supply Chains | FreightPOP

DIGITAL CONNECTIVITY FOR FREIGHT & SHIPPERS

A Guide to Digital Transformation for Supply Chains

A digital supply chain provides connections, automation, and full, real-time visibility for businesses to optimize the costs associated with logistics.

Digital Connectivity for Freight & Shippers

Get the pdf version to share with your colleagues

[Download the Guide](/content/cs/c/?cta_guid=3bdca5a7-cd4d-49af-89aa-81a580e3de9d&signature=AAH58kFSu1172hOj8fx6EYbHT2WU35aeTA&portal_id=2811194&pageId=38894596849&placement_guid=9c923a0e-d900-4fb9-b9c3-8545c18e2530&click=31396485-b606-4dd3-a1eb-14a36969e06f&redirect_url=APefjpGrel_cOKRlQwMHT9KHrFEB9ud7DgvspuptMo3-CR_AUxs6V78RTiK3sy7mmBhAnl1KU5LzpVEUkwRNLwU5xhw2mJOpuwSYF9AHVt-Hak-VKwakqwu0MRJtB9goeQ0aLwEeOjYa&hsutk=&canon=https%3A%2F%2Fwww.freightpop.com%2Fdigital-transformation-for-supply-chains-complete-guide&ts=1788230456765 "Download the Guide"/index.html)

Digital Transformation for Supply Chains

A digital supply chain is where technology provides connections, automation, and full, real-time visibility for businesses to manage their supply chains best. Ideally, shipping software that incorporates all aspects of logistics - inbound shipping and procurement, warehouse and customer management, outbound freight and parcel, and process auditing and reporting - is what business should seek.

As technology evolves, the initial capital and time investment required to integrate businesses with shipping software, or a Transportation Management System (TMS) as it is more commonly known, is becoming a more affordable option, even for small and midsize businesses.

Warehouse Functionality

Improving Warehouse Functionality

The best TMS is one that brings end-to-end integration and centralizes all the data across your supply chain, thus giving you digital connectivity. And that connection starts with your inventory and warehouse management data.

Warehouse Analysis

You cannot effectively improve any of your business practices without regularly evaluating and creating benchmarks for how things are to perform. Your warehouse is no different.

A good warehouse manager can conduct this analysis, or an outsourced auditor can if this skill is not a part of your current management team. And many TMS solutions have the tools and reporting required to help keep the warehouse in line with established benchmarks. Consistent warehouse audits are strongly encouraged as they can save you thousands of dollars down the line.

Analyze Inventory Placement

There are crafty ways to organize inventory that are not intuitive and require some industry experience. Shelving items that have different sizes in different locations, for example, can lead to a considerable reduction in the wrong size being grabbed. This avoids creating an unhappy customer and saves on the time required to solve an issue for them.

Using the ABC Analysis, aka the Inventory Categorization Method, can help you prioritize your inventory in a hierarchy that makes sense by dollar value. The general concept is that “A level” goods are the more expensive goods that you should apply the most monitoring due to their value. Then all the way down to “C level” goods that are much lower in value and can be treated with fewer control measures.

Analyze Picking

Analyze the picking methods currently being employed by your warehouse team. Items that sell the most volume should be easier to grab and ship than orders that sell infrequently. This will likely change over time, hence why consistent auditing of warehouse processes should be carried out year-to-year.

Analyze Errors

Look for ways to reduce warehouse and shipping errors, which cost a lot of man-hours to rectify and create a bad experience for your customers.

Analyze Working Conditions

Lastly, warehouse work itself can be uncomfortable and even dangerous work. Efforts to help keep staff comfortable and safe benefits your bottom line.

Inventory Control

In the day and age of same-day/next-day deliveries, high-level inventory management is crucial to locate items quickly, stay on top of quantities, and ensure accurate data. Employing barcode, QR Code, or RFID tracking technology to manage your supply chain is invaluable. And connecting your warehouse management system, ordering platform, and administrative systems to a Transportation Management System that integrates all the data will enable you to manage and troubleshoot inventory in the most competitive way possible.

Another way to best manage your inventory relates to how the warehouse itself is run. After assessing your warehouse and making efficiency improvements on that front, you should establish and maintain streamlined shipping and receiving processes. Be clear when hiring staff about the expectation and hold staff accountable for quickly unloading and stocking inventory, no matter how slow or busy the warehouse is. Boxes and packaging should also be swiftly removed or recycled. Keep chaos in the warehouse to a minimum.

You can also better manage your inventory by not mixing SKUs in warehouse bins. Studies show that both accuracy and time efficiency are reduced when multiple SKUs are placed in the same bin. If mixing SKUs cannot be avoided, it is suggested that the bin be portioned off with dividers.

Lastly, in managing inventory to modern customer delivery expectations, it can be useful to find reliable shipping partners that allow you to spread inventory across that country closer to where you ship the most. Dynamic warehousing is a growing pay-for-use concept that helps many businesses and retailers keep pace with fast delivery times.

Warehouse Communications

Another way to improve warehouse functionality is to make use of Advanced Shipping Notifications (ASNs). ASNs give shipping notifications that enable workers to help troubleshoot an impending warehouse bottleneck (perhaps more staff will be required) or reset pickup or delivery schedules. It is a more proactive way to deal with delays that may come up than just relying on initial shipping & receiving schedules provided at the time of booking.

Voice-enabled warehouse management systems are gaining in popularity and are claimed to reduce human error and the time required for pulling inventory. This technology is also noted as improving worker safety, increasing job and customer satisfaction, and reducing the time it takes to train new workers.

Communicate across channels to your people. Warehouse employees and managers are not as easily reached by email as your office staff. You’ll want to send imperative messages and requests through text messaging and perhaps even posting messages around critical areas (i.e., by the time clock or lunchroom etc.)

Additionally, have an avenue for feedback. Help your staff feel listened to and valued. Make a constructive show of how feedback is taken into account as well; otherwise, you are wasting everyone’s time and giving a bad impression of management.

Freight & Shipping Carrier Management

Integrate a Robust Transportation Management System

We have written quite a bit about Transportation Management Systems (TMS), to include a Guide To How TMS Reduces Shipping and Freight Costs and a Guide to The 5 Must-Haves in Shipping Software.

There are two important things to keep in mind when selecting shipping software.

  1. A TMS should integrate with your existing systems easily and cost-effectively. A good TMS should not cost you huge amounts of money to do an integration (Beware - some providers will try to bill you exorbitantly!)

A solid TMS can integrate with your existing warehouse management system and with your customer ordering, fulfillment, and billing systems both seamlessly and at a reasonable cost.

  1. A TMS should include tools that make the five key workflows of shipping easier. You should be able to Shop - Ship - Track - Analyze - and Audit quickly with cost-saving features.

How does a Transportation Management System work?

1. Quickly Select Carriers By Price

The time and hassle involved in obtaining shipping prices and comparing them for the best deal looks a little something like this:

With a good TMS platform, however, all of this data should be readily available to you on one screen. You enter shipment and destination details ONE TIME and then have a side-by-side comparison of rates.

Outstanding TMS solutions will also be able to integrate any of your existing contracted rates and partner rates obtained through your relationship with your TMS provider.

If your business is spending at least $20,000 a month on shipping & freight, having this TMS feature alone can save you money on both shipping rates and on staff hours in obtaining the best rates. In our experience in providing a TMS solution, customers can save up to 35% on shipping rates and can reallocate up to half of their administrative staff.

2. Quickly Obtain Spot Quotes

Negotiating the best rates on the spot quote marketplace is also quite an inefficient process without a TMS. Obtaining these quotes involves more of a back and forth exchange, which takes time and can result in the shipper missing out on a quote as carriers look to quickly fill trucks throughout the day.

A TMS provides a single platform for the shipper whereby they can contact the carrier on their preferred method (email or website) seamlessly from the TMS platform. No need to go in and out of emails or carrier websites. The communication and process are made much smoother and faster, thereby helping shippers not miss out on quotes.

3. Analyze and Audit

Freight is one of the highest line item costs a shipping or retail business has. We have been in the shipping industry for over 20 years and have seen customers save between 5-15% by merely isolating invoicing errors and filing a claim.

You need to analyze your shipping spend. And you need to audit your carriers.

You are looking for such issues as:

A good TMS should give you the tools to run reports and easily capture this sort of data. You should even have features that help you along with the claims process - which can be tedious. Finding where the errors are and assessing carrier performance will help you go after missing money and avoid carriers costing you the most.

Supply Chain Automation

Removing Manual Shipping Processes

We mentioned earlier how freight is one of the highest line item costs a shipping or retail business has. Labor, for most businesses, represents the highest business cost. Using tools, like TMS shipping software, can diminish how much time your administrators and warehousing staff spend on organizing inventory, processing orders, shipping parcel and freight, and analyzing and auditing shipping spend.

Removing manual shipping processes is accomplished through end-to-end integrations of your warehouse, tracking, and ordering systems. These integrations help automate many of your processes.

End-to-End Supply chain Integrations

APIs and digital connections are pretty well known this day and age through our experiences with Apps and mobile devices. APIs and digital connections can be used to connect to such things as carriers and marketplace rates. And depending on the software you select, some end-to-end integrations enable two-way communication between data points.

This type of connection enables seamless communication between ordering systems, customer management, warehouse management, and inventory control. End-to-end integrations speed up the entire shipping process saving businesses time and money.

Improves Workflows

Removing manual processes and integrating systems decreases human error, such as duplicate or mistaken entries. Better data reduces the chance of something going wrong with an order, which negatively impacts customers and shipping teams. When an order goes wrong, time is wasted in fixing the issue and placating a customer — and sometimes fulfilling an order incorrectly snowballs into losing a customer and receiving negative attention or reviews.

Removing manual processes speeds up the shipping process. If systems are integrated well, less manual work is required. Staff can be reallocated to other duties. In our experience in providing a TMS platform, we’ve seen customers reallocate up to half of their processing team, with one customer saving up to 200 hours a week in shipping process labor.

Customer Management

Improving Customer Management

A TMS system that integrates your warehouse, ordering, customer management, and tracking systems will allow for the automation of communication and other tools.

A sound TMS system will have such features as customer portals that allow customers to access information, such as tracking orders, making changes, or organizing returns.

These tools can also automate shipping notifications from carriers, always keeping customers in the loop of any delays and building loyalty and good review potential with customers.

Excellent TMS platforms also enable communication between customers and shipping brokers, which is a much more direct way to keep customers in the loop on shipments than contacting your business to find out where a shipment is at with a third-party broker.

Managing Carrier Rates

Partner Rates

Some TMS providers will include partner rates, which are carrier rates they have negotiated on behalf of their customers. Having options in comparing your prices to marketplace rates and a business' established contract rates gives a broader range in which to capture deals. Market rates from carriers change frequently, outdating favorable negotiated rates by the customer. When a TMS includes marketplace and partner rates in real time, shippers can save up to 30%.