February 14 2024 | 12 Min Read

6 best practices in logistics optimization you mustn’t live without

Posted By
Wendy Mackenzie
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6 best practices in logistics optimization you mustn’t live without

I’m just a girl, standing in front of a shipper, asking you to love m…your freight strategy. Well, let’s be honest. We all say that we love our freight strategy, but are you truly in love with it? Do you trust that your network has your back and is in it for the long haul? Good news! The right freight data tells the truth, and you’ll know when something is amiss. 

There are two obvious questions that are likely popping into your mind right now. How do I get that data, and how do I turn it into action? s

The answers rest in learning a few best practices in logistics optimization. Combined into an effective strategy, they amount to having a true pulse on the pillars of your transportation management strategy. Let’s dig in and see the top six love stories…we mean…best practices that you simply mustn’t live without.

1. Get and use data analytics for logistics optimization

We wish that all logistics stories could have the heart-string moments of Notting Hill, but all too often, we get bogged down in the day-to-day hustle culture. That’s great, and it helps us to survive every moment. However, that culture can mean missing the low-hanging forbidden fruit of success. It could be within our grasp if we only knew where to look. Meaningful improvements in your supply chain come from understanding where to pinpoint your focus. 

In other words, you need clear visibility into freight data, as explained in our business intelligence white paper. You must start tracking and applying data for optimization in logistics. You need to know what you’re looking at and what it means for every operation. Of course, that's much easier when you have a team with heart backing you up, one whose mission statement is to honor your business and profitability as they do their own.

2. Choose the right mode, not just the easiest or cheapest mode

Speaking of using data correctly, business intelligence data isn’t only about finding the lowest-cost solution. 

freight optimization running down the highwaySure, you can use the data to find the cheapest route, no matter what. You can find the lowest-cost carrier, but what if they lack the right equipment to handle the load? Instead, we’d rather focus on the carriers out there who we know without a doubt have the just-right equipment, even if it costs a bit more. Even if it means we’re able to rest a bit easier knowing they are able to handle the load.

Plus, what if you don’t need a full truckload? Maybe less-than-truckload (LTL) is a better option, or maybe you can find a way to condense several LTL loads into a full load. That’s where applying data becomes even more valuable. Using freight optimization data makes these opportunities obvious, helping you to find savings when you thought you might have had to pay a premium. 

3. Take a customer-centric view of every load

logistics optimization in the warehouse with balloonsWhenever we talk about love being in the air, we tend to focus on one person. It’s romantic and a grand gesture. The same je ne sais quoi that makes love so appealing should be the highlight of how you view every customer. 

A customer-centric view of every load helps you think outside the box of chocolates. You can see what’s happening from their view and prioritize your transportation use based on it. Optimizing the supply chain isn’t a cold and loveless process but rather a boombox-laden request for help to win your heart’s desire—your customer’s appreciation and devotion.

4. Integrate new technologies with your systems

Let’s talk about new technologies. We’ve all seen the hype around new systems and technologies that make life easier, cut the crusts off the bread, and offer super-duper savings. A question: do those savings come at the expense of existing systems? 

Whether you have an existing ERP or are reliant on some other system of record, you need to ensure it’s capable of integration with whatever solution you use to move your freight. The best supply chain optimization tools on the planet work by sharing data, and that means you need a plan for integrating a transportation management system (TMS) with your existing tech stack. 

Fortunately, IL2000 already has that charming nougat covered with an ERP-agnostic solution that will work no matter your level of digital transformation. 

5. Establish high-quality partnerships to enable continuous improvement

Now that you’ve taken the brave step to profess your plans, you might be ready for true commitment. You do need a partner in this life, after all, and that’s where choosing a managed transportation provider can help. 

Managed transportation brings an added flair and sense of understanding to your transportation strategy. As experts in the field, such providers can help you understand what’s happening and help with bringing new systems, integrations or processes online. In turn, that means you get to automate the redundancies causing you to overlook the low-hanging fruit we mentioned earlier. Plus, they build over time and enable truly continuous improvement across every activity, every moment and every need.

6. Track the right KPIs

chocolates to represent the seven KPIs of optimizationCongratulations! You’re ready to move forward and start thinking about how to use a TMS to take the pulse of your organization. The right TMS is like a pacemaker–it keeps you from feeling light-headed and can shock you back into reality when things get to be a bit too much. But what are the core things you really need to know to get started?

Sure, managed service means it can run well without you, but being involved minimally isn’t the same as losing control. It gives you the freedom to intervene and ask questions while also knowing that you know what’s happening. And that’s why having a handful of metrics that reveal the basics makes all the difference. 

The top key performance indicators (KPIs) to track throughout your transportation network include:

  • OTIF Delivery.
  • Capacity Utilization. 
  • Delivery Time.
  • Number of Shipments or Loads.
  • Accessorial Costs.
  • Freight Payment Accuracy.
  • Total Transportation Costs.

There’s a reason there are seven KPIs. It’s a sign that you’ve decided and followed your heart to the optimization honeymoon and that you’ve selected the seven best indicators in the box.

Hasten logistics success with the power and expertise of IL2000’s award-winning team

The road to logistics efficiency isn’t always clear and dry, and it’s definitely going to include a few of the lovely chocolates with the coconut cream but not the center you were hoping for. That’s life. Some things are just there to help you get to the better bits. And the same is true in logistics optimization. You need to be strategic, following the steps above like you’d follow the guide of the back of the heart-shaped candy box to find the one you want. 

The road is bumpy. It’s a cobblestone thoroughfare where everyone can and often does hit the potholes and miss their destinations. Each best practice is a possible destination, but it’s also an opportunity to go down the wrong path. Rather than getting lost or accidentally losing your way, a true expert in logistics management can be your guide to lov…err logistics. The trick is knowing where to look. That’s precisely what IL2000 does; We help you navigate the gridlock to more quickly find your way in logistics while maintaining cost control.

Speak with an IL2000 consulting engagement executive to explore how you can turn these best practices from hype into actual improvements in your supply chain. 

 

Topics: Business Intelligence, Freight Management Consulting, Data Insights, Freight data, freight analysis, Supply Chain Optimization

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