March 6 2024 | 9 Min Read

Supply chain analytics: A game changer in reducing freight expenses

Posted By
Wendy Mackenzie
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Supply chain analytics: A game changer in reducing freight expenses

As the chill of winter fades and the warmth of spring begins to rejuvenate the world around us, a similar season of change beckons for businesses grappling with the rising tide of freight expenses. Just as spring symbolizes new beginnings and growth, it's also the perfect time for companies to blossom by optimizing their supply chain operations

Poor implementation of supply chain analytics often tracks back to trouble within individual integrations. Consider what TechTarget says, “Achieving end-to-end supply chain analytics requires bringing information together across the procurement of raw materials and extends through production, distribution and aftermarket services. This depends on effective integration between the many SCM and supply chain execution platforms that make up a typical company's supply chain. The goal of such integration is supply chain visibility: the ability to view data on goods at every step in the supply chain.” In this era, where every penny counts, staying afloat in the competitive market demands not just resilience but a strategic pivot towards efficiency and profitability.

Unveiling the culprit: Inefficiencies in the supply chain

man viewing supply chain analytics in AR-powered warehouse

Navigating the labyrinth of supply chain management reveals a complex network where inefficiencies, much like weeds in a garden, can obstruct the flow of operations and inflate costs. The intricate interplay of various elements within this ecosystem often conceals these inefficiencies, making them challenging to identify and address.

By deploying analytics, businesses can illuminate these hidden issues, akin to gardeners who, with the right tools, can discern the subtle signs of underlying problems. This proactive approach allows for the strategic eradication of inefficiencies, paving the way for a more streamlined and cost-effective supply chain. To that end, here are the top inefficiencies within today’s supply chain:

  • Misaligned inventory across individual nodes, but the right partner can help identify the best opportunities for rebalancing your distribution network. 
  • Inefficient route planning leads to added costs, and a true freight consulting partner can help find the best route, not just the cheapest route. 
  • Vendor compliance issues remain rampant, but again, a logistics partner helps hold vendors (aka truckers and individual companies) accountable. 
  • Fluctuating fuel costs are omnipresent, yet shippers can and do overcome their impact by tracking the data and maintaining accuracy with freight bill auditing
  • Manual data entry errors result in big problems, but a team of experts in your corner that validates integration via an API-enabled transportation management system (TMS) reduces the risk.
  • Lack of real-time tracking and communication leads to downstream network complaints, but easy-to-use interfaces with push notifications keep you in the know. 
  • Unsustainable packing or staging practices result in missed opportunities for optimization, so a strategy to peer beyond the virtual veil with in-person visits can find the simplest issues you might have overlooked. 

Effective optimization relies on data analytics

Supply chain analytics are reshaping how companies approach everyday operations. With increasing processing power and the growing demand for AI, today’s analytics are capable of handling very large amounts of data that will support a better strategy to predict not only the future but validate what may happen based on a given set of circumstances. Together in a multi-faceted array of intense analytics, analytics-derived highlights shine a spotlight on hidden inefficiencies. In turn, this guides shippers toward smarter, data-driven decisions across several core types of supply chain analytics:

  • With descriptive analytics, often used interchangeably with diagnostic analytics, organizations gain insights into past performance, setting the stage for meaningful steps in improving supply chain processes. 
  • Predictive analytics forecasts future trends, enabling proactive adjustments, but before such value can be found, unstructured data must first be transformed into actionable data. 
  • Prescriptive analytics offers specific recommendations, optimizing decision-making processes and continuing to create a feedback loop for use in supply chain analysis and freight analytics tools.
  • Cognitive analytics leverages AI and machine learning, enhancing adaptability and real-time learning from data. Only time will tell how much advanced large language models and natural language processing capabilities will become ingrained into the process. It’s a very exciting time to be in the freight industry. 

This suite of tools refines current strategies and equips businesses to anticipate future challenges, ensuring they remain competitive in a rapidly evolving market.

The quick checklist to implementing supply chain analytics

woman using supply chain analytics in virtual worldImplementing supply chain analytics is a strategic move. It requires precise planning and a commitment to data-driven decision-making. The approach should be systematic, ensuring a smooth integration with current operations. It's about laying a new foundation where data informs every decision.

This shift promises to streamline processes, enhance efficiency, and unlock new opportunities for optimization. With careful preparation, implementing analytics will transform the supply chain into a more agile, resilient, and competitive advantage. Here are a few steps to make the process easier, assuming you decide to go it alone and not work with an expert like IL2000. 

  • Benchmark against industry standards to set realistic targets.
  • Establish a dedicated analytics team with cross-functional skills.
  • Prioritize areas with the highest potential for ROI.
  • Develop a data governance framework to ensure quality and compliance.
  • Secure executive sponsorship for analytics initiatives.
  • Map out the supply chain process to identify data sources.
  • Design a scalable analytics architecture to support growth.
  • Prototype analytics solutions in a controlled environment.
  • Create a feedback loop between analytics insights and business strategy.
  • Invest in training programs to build analytics literacy across the organization.
  • Leverage cloud computing for enhanced data processing and storage capabilities.
  • Partner with technology vendors for advanced analytics capabilities.
  • Establish metrics for measuring the success of analytics initiatives.
  • Plan for change management to ensure smooth adoption.
  • Develop a roadmap for incremental implementation across the supply chain.
  • Conduct regular audits of analytics processes to identify improvement areas.
  • Celebrate successes and share case studies to foster a culture of innovation.

Press the easy analytics button by partnering with IL2000

It’s clearly time to embrace analytics to prevent your supply chain from withering like an untended garden. In fact, if you’re not investing in your future with analytics, you’re going to fall behind your competitors! Know this one thing above all else: “Through 2024, 50% of supply chain organizations will invest in applications that support artificial intelligence and advanced analytics capabilities,” reports KPMG.

With analytics set to become even more vital, ensuring your operations flourish has never been more critical. Don't risk stagnation; cultivate success with IL2000.

Connect with an IL2000 consulting engagement executive to plan your operational garden today, ensuring a vibrant and productive future for your supply chain.

 

Topics: Logistics Management, Transportation Models, Business Intelligence

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