February 22 2024 | 13 Min Read

Avoiding logistics potholes: A simple optimization plan

Posted By
Wendy Mackenzie
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Avoiding logistics potholes: A simple optimization plan

The freight industry thrives on the seamless movement of goods across global networks. With an ever-growing complexity, enabling logistics optimization is difficult at best. Supply chain and logistics optimization strategies can inspire efficiency and customer satisfaction. But how do you know what to really do? That's where consulting services come into play. Selecting an appropriate supply chain consulting partner can be complex. But what does it mean and how can you make sense of it? 

Let’s explore an example of how you might be optimizing things in your life.

Have you ever gone to the store and then couldn't be bothered to walk all the way to the back for that one item you needed? You know what we're talking about. When you really need the milk, and you've got that coupon, but the daunting size of the mega-hyper-whatever-sized store is just too much, even to save that dollar.

The need to run into the store, grab the milk, decide between self-checkout or a cashier, and hope that your card doesn’t cause glitches at the time of payment is only growing in value. You have to complete all the tasks faster, and as a result, the urgency to make life easier takes over. You start planning other options. And maybe you decide to stop at the convenience store to save some time and energy despite a higher cost. 

Why’s that important?

Well, let’s imagine that you’re driving down a highway and expect to make it to dinner on time. But then, the road to freedom suddenly becomes a clogged, congested mess. You know the logistical nightmare we’re talking about. But what if you could avoid the highway entirely?

Let’s dig a bit deeper into this scenario. You need to know how to find those backroads, whether that’s hearing about the secret roads from a trusted friend or seeing an unmarked road that looks promising on your GPS, provided your phone connection is stable. 

That is precisely what happens in logistics optimization. You consult a trusted friend–your IL2000 logistics advocate–and leverage the TMS with real-time rates and tracking capabilities to make a “call” on the best option. But there’s an important fact and tidbit here; the most obvious route–the highway–isn’t always the best. The lure of a clear route could easily lead back into congestion further down the road. You need to know where to look. The right route is sitting there, hiding in plain sight, between going with the not-moving-so-fast flow and the alternate back-road mirage. 

Consider this. According to Inbound Logistics, Logistics optimization is a strategy that companies implement to meet the growing demand for fast and efficient supply chain operations. This strategy focuses on different aspects of the supply chain and identifies optimization opportunities for different supply chain stages.”

Despite its significance, shippers face logistics optimization challenges that hinder the most meticulous plans. Inefficient route planning and other potholes impact a company's bottom line. In turn, that affects on-time deliveries and customer service.

Let's shed light on the common potholes in the road to logistics optimization. Together, we'll provide a straightforward plan to navigate them. 

Pitfall 1: Inefficient route planning

supply chain network optimization-2 1Inefficient route planning often results in delayed deliveries and increased fuel costs. Poor planning means opening a can of worms that could affect everything up to and including the customer experience. It also means that you might have overlooked which mode will work and whether the terrain of the back-roads-style route may lead to pallets falling and fragile freight turning into a torrent of shards for the driver.  

Now, let’s zoom out a bit more. What about all the potential things that could affect the decision to choose a truck, a trailer, a route, or anything else? Think about these possible variables first:

  • Traffic patterns.
  • Weather conditions.
  • Pickup and delivery windows.
  • Package or load size.
  • Packaging and palletizing.
  • Drivers and equipment availability.

Poor oversight into these issues limits the value of supply chain network optimization.

Common mistakes in route planning may also include other areas that lack real-time data. Together, the mistakes increase transit time, operational costs, and negative customer experiences. Luckily, there are several advanced routing software tools available that incorporate real-time data analysis and will help circumvent clogged routes and highways.

Pitfall 2: Lack of communication and collaboration

Effective communication and collaboration serve as the lifeblood of logistics optimization. They ensure all parties work towards a common goal within the design of the supply chain network. This is where collaborating with a consultative partner can help. 

Think about it. Communication issues can lead to a lack of information and errors in supply chain management. These missteps cause delays, increased costs, inefficiencies, and strained relationships. 

Encouraging open lines of communication through shared platforms and regular meetings helped in the past, but let’s be honest. NO ONE wants to have more meetings! Additionally, valuing and acting upon feedback to foster a collaborative environment leads to more robust and resilient logistics operations. But first, you’d need a plan to collect feedback faster. You’d need to analyze it and understand what’s happening. Only then can you begin to make changes. 

Shared communication plans and world-class services mean that you can get more accomplished with fewer meetings, fewer headaches, and better results. You’re able to not only understand what’s happening but act on the facts, trust expert advice and avoid following tribal knowledge or crowd mentality. You need a clear plan for communication that works. The right partner makes that a turnkey process. Period.

Pitfall 3: Inadequate technology implementation

Technology drives efficient logistics operations. That’s like saying energy powers people. But where does that energy originate? Is it from a sugary confection loaded with useless calories, or is it from nutrient-rich foods?

The analogy applies to logistics technology and its use by the right partners to make your supply chain run more efficiently. Yes, supply chain technology can automate processes, improve accuracy, and offer valuable insights. Plus, an optimization solution enables supply chain savings and is built upon actionable business intelligence insights. However, it can come with major hurdles to implementation. 

Technology implementation challenges often stem from selecting non-integrative systems and cost-related investment hesitations. 

Most often, you’d need to conduct thorough research before adopting new technologies. You want to research whether the TMS is truly flexible enough for your needs. Is it regaled to a single mode, or can it work from rail to road to the insanely-weird-looking-last-mile-handoff-robots, or to whatever else is happening? 

You need to research whether the TMS is free as a part of a larger supply chain play–like how IL2000 doesn’t charge for our TMS–or whether that’s a hidden cobra ready to take not only your wallet’s contents but your life as well. 

Instead, having a great partner means you don’t have to go through those hellscapes. 

So what’s the solution? Well, first, look deeper at the problems and issues.

Pitfall 4: Insufficient risk management

supply chain network optimization-2 2Risk management prepares businesses to handle unexpected disruptions. Mitigating risk is a critical component in logistics optimization. And it requires a partner with the right industry expertise.

For example, not investing in optimization leads to exposure to various issues, including political or deriving from the climate. There are many factors at play. Other risks include reliance on single suppliers, poor contingency plans, or insufficient insurance coverage. Falling into one of these potholes can lead to significant operational and financial setbacks for businesses.

A robust risk management plan involves varying your suppliers. It could include establishing alternative logistics routes. Or perhaps it's taking extra insurance. The choices can be endless. 

Regular risk assessments and proactive planning help logistics operations withstand unforeseen challenges. Now, this may seem unrelated to optimization. But it's only by seeing these risks that we find truly meaningful optimization opportunities. 

How to boost supply chain performance and business operations optimization

Enhancing supply chain performance smoothes operations. However, it requires meticulous optimization processes to ensure efficiency and effectiveness. Operations planning also hinges on resource management, streamlining workflows, and balancing costs.

Using predictive analytics plays a pivotal role in this context. Analytics enables consulting teams - actual people- to better understand your needs as the shipper and how to leverage demand forecasting, manage inventory, and optimize routes. This approach improves business processes and your competitive advantage. But what other issues exist in business operations?

Let's consider the following:

  • Inaccurate data.
  • Complex processes.
  • Poor integration.

The core challenges require a well-thought-out strategic approach. And that leads to true optimization of business operations. 

The solutions rest in your use of technology and your supply chain partnerships. 

Integrating advanced technologies into inventory and operations management boosts supply chain performance. Companies can determine the optimal inventory levels through predictive analysis. This reduces costs and mitigates the risk of stockouts or excess stock. And this allows for better advanced shipment planning and more efficient freight management. 

Moreover, technology facilitates the automation of routine tasks. The challenge involves selecting technologies and partners that match specific business needs. If chosen wisely, you get a series of core results: streamlined processes, efficient logistics, and cost savings. 

Advance your logistics planning to optimize your supply chain with IL2000

The logistics optimization potholes discussed throughout this post highlight its complex nature. Each represents a potential threat to the efficiency and reliability of a company's supply chain operations. Implementing the simple plans and strategies outlined ultimately helps businesses strengthen their logistics operations. With that strength, businesses can harness real benefits and tap the exponential horsepower of supply chain optimization.  The added value can help companies harness these benefits and drive their supply chain optimization goals. 

Avoiding the potholes is much easier when you have a team on your side who knows where the risks are and how to avoid them. IL2000 gets it.  And in turn, you’ll find a partner that will not only share industry best practices and years of honed experience but also give actionable tips to turn that advice into a reality. Nothing is more frustrating than to hear about the best route only to be told it’s over yonder with little direction or advice on how to get there. So, are you still worried about hitting the potholes, or are you ready to find the better-maintained road to success?

Talk with an IL2000 consulting engagement executive to explore how you can more easily dodge optimization potholes and overtake true opportunities for improving your supply chain.

 

Topics: Logistics Management, Transportation Models, Business Intelligence

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