September 9 2022 | 10 Min Read

Profitability takes perspective

Posted By
Wendy Mackenzie
Profitability takes perspective
How thinking differently about your sub-brand supply chains can change everything

Imagine you’re a square.

And to be clear, we’re not asking you to picture yourself as an awkward person of a bookish disposition with horned-rimmed glasses held together by sticky tape. No, imagine you are a literal, geometric square living out your days in a two-dimensional universe. One day, an unknown being materializes directly in front of you. The creature, who calls herself, “Sphere,” describes a fantastical reality in which she can access a mysterious “third dimension.” Your strange visitor even claims she can navigate this additional dimension of space with ease, moving and connecting objects in miraculous ways. She offers to take you there and show you places you couldn’t possibly imagine.

Squares and spheres in different plains to represent logistics cost variables

Do you go?

This is a blog about geometry, a strange thought experiment, and (if you’re browsing this page because you’re with a parent company) how IL2000 may be able to show you creative approaches to transportation management you haven’t considered yet.

Logistics and the “perspective challenge”

The story of a square meeting a sphere might sound like the ravings an inebriated friend (probably named Larry) might subject you to right before a helpful bartender calls for an Uber. Believe it or not, an English schoolmaster, Edwin Abbot, devised this thought experiment nearly 150 years ago. He coined it Flatland, and philosophers, physicists, and pickled partygoers have been discussing it ever since. For a great summary of the idea, check out this 5-minute video by TED-ed.

Flatland is a cool story because it poses a challenge of perspective. It asks the question, are there directions you can’t move in simply because you can’t see that the direction exists? In Abbot’s story, Square accepts Sphere’s offer and blasts off to the third dimension. Sphere shows Square things he’d never imagined, and his perspective is transformed.

Sphere in space with stairway to logistics profitabilityAnd this brings us from geometry to logistics. We believe a good 3PL partner will take a client on a similar kind of journey. With experts across every corner of supply chain management, IL2000 is equipped to bring a unique problem-solving perspective to complex supply chain challenges.

For example, imagine that you’ve scheduled a shipment for a LTL carrier. If the load exceeds weight limits, it may be subject to additional accessorial charges. But if you know the actual weight of the load, you can plan for those potential costs and compare it to the costs of going full truckload versus LTL plus an accessorial surcharge. It’s a problem that you might overlook without actually weighing the shipment. The same could apply to looking at only one part of the problem–the need to move the load–and forgetting to consider that it’s actually heavier than meets the eye. You need the 360-degree view.

To quote Techa Pacitto, our COO, from a recent press release: “Everyone at IL2000 is a problem-solver. We all have this mindset that even the toughest problems are waiting for a smart solution. Beyond expertise, I think we bring this unique intellectual courage and fortitude to the table. And this has helped clients keep their supply chains running smoothly.”

So, let’s say you’re not a rectilinear entity but are a regular human being managing a parent company resting atop an ecosystem of vertically integrated companies. From where you sit, how can IL2000’s spherical perspective help you solve the trickiest quadrilateral freight management problems you face today?

Sidestepping diseconomies of scale

As the Squarefolk of Flatland got on with daily life, there were just certain accepted ways of doing things. Take movement in tight spaces: If a team of dimensionally-challenged oblongs needed to navigate a narrow obstacle course together, they all had exactly two directional options: left-right and forward-back. If several Squarefolk bunched up at a corner, there’d be grumbling, sure, but ultimately they’d resign themselves to going through one at a time. One of the Squarefolk might mutter, “That’s just the way Flatland works.”

The supply chains of your sub-companies may be dealing with a similar situation. Let’s say your companies are jostling in a competitive freight market to secure reliable and reasonably priced carriers. Sometimes some of your sub-companies may miss a delivery deadline or end up paying above-market rates to have a carrier expedite shipping. Your supply chain managers may look for a better way, but ultimately they reach the same conclusion as the Squarefolk of Flatland: “That’s just the way the freight market and transportation costs work.”

We can help you approach the supply chain obstacle course differently. Leveraging our fully customizable and industry-leading transportation management system (TMS), IL2000 can optimize carrier terms and shipping lanes across all your company supply chains. Suddenly your freight operation has options that simply didn’t exist before. With a broadened logistics perspective, you gain greater bargaining power with carriers and can sail through the supply chain obstacle course with new levels of cost efficiency.

Gaining a consolidated view of your distribution

The Squarefolk felt compelled to explore their universe’s vast open plains and … well … other plains. But the wilds of Flatland were treacherous and it was easy to become hopelessly lost. There were no mountains to offer a far-seeing vista across the unexplored wilds, and without valleys and other natural features to act as landmarks, it was near impossible to gain an intuitive lay of the land. The denizens of Flatland soon gave up on trying to find the shortest way to get from one place to another. What was the point? Their reality was a complex place. It was best to simply accept that getting lost was a part of life.

Back in our squishy 3D universe, you might feel similarly resigned to supply chain complexity. Right now, your mind’s eye may be gazing with trepidation over dozens of sub-companies, each with its own intricate web of manufacturing locations, storage costs, distribution points for finished and raw materials, and transportation modalities. In the non-3PL-enhanced Flatland universe of supply chain management, it’s easy to look at that immense complexity and throw up your hands. What’s the point of trying to optimize the un-optimizable? Better to simply accept unavoidable supply chain inefficiencies and get on with running a business.

IL2000 can show you how to see beyond that two-dimensional world with a Center of Gravity (COG) Analysis. Instead of analyzing your various supply chains as though they were a jumble of disconnected strands, we can use a COG analysis to bring those logistics operations’ strands together, giving you a clearer view of how everything is connected. With this map, we’ll help you pinpoint your optimal distribution points and see new ways to consolidate your shipping channels.

Seeing inside your supply chain and customer service

One of the first shocks our friend, Square, experienced on his mysterious trip to the third dimension was that he could look back down at his existence and see inside everything. From his new vantage point, everything that had been hidden from the long-term and broad view lay directly beneath him. Advanced supply chain business intelligence equips you with a similar kind of superpower.

If you’re stuck in supply chain Flatland, you only get to see the outside of your supply chain — usually when a shipment left your facility and how much you paid to ship it. If something isn’t working as it should, you’ll only find out when a critical problem erupts to the surface. You’re stuck in a reactive world of responding to what happens directly in front of you and hopefully reacting quickly enough to avert major problems.

IL2000’s BI platform gives you actionable insight into what’s going on inside your supply chains, everything from minor delays within a leg of the journey to carriers imposing unfounded charges on shipments. And because our BI dashboard was built to accommodate not only multiple sites but multiple companies, we can ensure that if something significant happens inside one of your supply chains, or if it affects shipping costs in any way, it can form best practices across your other supply chains as well. In turn, you’re able to improve customer service and logistics profitability in tandem.

Are you trapped in Supply Chain Flatworld?

Back in the two-dimensional universe of Flatland, Sphere presented Square with the ultimate challenge. She asked if Square was willing to gain a completely new perspective; she asked if he was ready to see differently, and a similar concept can reduce logistics company operational costs

Birds-eye of factory as part of a center of gravity analysis

If you’re managing a parent company and struggling to maintain efficiency across supply chains within your purview, we’d like to ask you the same perspective question. Are there supply chain efficiencies or opportunities within logistics processes  you can’t seize simply because you don’t have the tools and insights you need to see and grab hold of them?

For over two decades, we’ve worked with clients to find better ways to manage their supply chains. More than great software, more than industry-leading expert advice, we’re here to help you gain a broader perspective on how your freight operation works from the first movement through route optimization and well beyond, which will improve profit margins. It really is that simple.

Take your logistics to a higher dimension with IL2000.

Contact us today for a no-obligation consultation.


Topics: Entrepreneurial Spirit, Supply Chain Management, Freight Costs, Business Intelligence

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