Remaining Vigilant, Post Pandemic
PLAYING NICE Distributors and manufacturers can find themselves at odds when it comes to supply chain management. Overcoming siloed data streams, friction in workflows, and misalignment on goals can cause tension in partnerships. In worst case scenarios, these disconnects can lead to arguments, disputes, and a lack of customer focus. It pays to focus on a solution. Enable’s Overcoming the Misalignment Between Supply Chain Partners report surveyed nearly 250 manufacturers, distributors, buying groups, and retailers, and finds that those who actively collaborate tend to work more eectively together. But there’s work to be done. Just 10% of distributors report strong alignment with their trading partners, while approximately half note a lack of alignment about 50% of the time. The story is slightly dierent for manufacturers, which points to a disconnect or collaboration gap. Up to 76% of manufacturers report alignment with their trading partners. Collaboration gaps often lead to one partner feeling left out of the process and can create significant friction. Case in point: 60% of manufacturers say that their relationships have remained stagnant or grown weaker and just 25% of retailers believe their relationships have grown stronger. Organizations that can overcome these barriers and collaborate eectively across the supply chain may benefit by reductions in inventories and costs.
The supply and demand imbalances wrought during the pandemic magnied deciencies in public and private infrastructure and investment. And although the pandemic may no longer be throwing logistics operations into upheaval, shippers should remain vigilant. With these challenges in mind, where should shippers focus their attention and what can they do to mitigate these threats? Be wary of strict adherence to just-in-time inventory management that cuts excess but can place production lines and other downstream processes in greater peril. Inventory is a buffer; without it, operations are more likely to be pinched in the event of a disruption. Limit exposure to carriers who are too dependent on a single customer or industry sector. For example, if a carrier is heavily dependent on the automotive industry and plants shut down, that carrier’s trucks won’t be where other customers need them. Monitor carrier investment in trucks, trailers and real estate to meet your needs. Underinvestment affects a carrier’s ability to provide continuity of service. The shipper-carrier relationship is a two-way street. What can shippers do to help secure access to capacity when disruption happens? • Be a shipper of choice. Make it easy for carriers to make deliveries and pickups. Minimize dwell time and make sure your processes are not cumbersome or overwhelming. • Build out your roster of carriers so you can pivot when necessary. Make sure you have redundancy and optionality built into your supply chain. • Be able to shift between modes. Remember that when one mode gets pinched, it may take a while to trickle into other modes, creating short-term opportunities for relief. If you have the right technology, you can conduct some rate shopping to take advantage. — Andy Dyer, President, Transportation Management, and Kevin Day, President, LTL, AFS Logistics
20 Inbound Logistics • April 2023
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