As many in logistics are aware, protecting your supply chain is crucial to both inventory management and overall business continuity.
An efficient and optimized supply chain paves the way for significant cost savings, improved profitability, and a higher level of customer satisfaction and service. Conversely, disruptions to your supply chain can have a catastrophic impact on your organization, the clients you serve, and your company’s public image.
Like many other organizations, your company has likely experienced notable supply chain disruptions since the onset of 2020. These unprecedented events made it clear that businesses would have to modernize their logistics practices by leveraging the latest technologies to stay afloat.
Unfortunately, change management is not always easy or efficient, as executives and senior leadership can be resistant to altering “tried and true” logistics management practices.
To help you overcome this barrier and begin to future-proof your organization, we’ve outlined five ways that you can convince senior leadership to adopt new logistics technologies and frameworks that will help your business get ahead of the competition.
These tactics are designed to demonstrate a “value-added” proposition of modernizing your logistics practices and incorporating the deployment of new solutions for your team.
1. Discuss the Challenges of the Spot Market
If the last two years have taught us anything, it is that the spot market can be both volatile and unreliable. As you seek to convince your organizational leadership to adopt new logistics technologies, we suggest that you start by looking back at some of the new challenges you have faced since beginning of the pandemic.
Specifically, you should closely analyze the true cost of relying on spot market pricing. What you will likely discover is that the spot market has cost your organization thousands, if not millions, due to contract non-performance and bullwhip variables.
Few things pique the interest of C-suite executives and stakeholders like lost revenue. Once you have accumulated quantifiable data regarding the cost of spot market shipping strategies, visualize and present this data using an easily digestible format.
In addition, we recommend discussing the potential cost savings associated with modern logistics technologies. By incorporating this information into your presentation, you can demonstrate the value of such an investment into new tech.
While the exact cost savings possibilities will vary from organization to organization, many companies can reduce additional freight spend by 25% or more. Such a cost reduction is likely to be more than enough to help sway your organizational leadership toward innovation.
2. Analyze Your Current Supply Chain Strategy
The most effective supply chains share certain attributes such as dependability, cost efficiency, and agility.
If you want to demonstrate how modern logistics technology can improve your company’s supply chain in these key areas, you must first reassess your current strategy. You should ensure that your strategy aligns with the unique needs of your business.
Specifically, you should ask yourself questions such as “is our current supply chain resilient?” or “which lanes should we focus on building resiliency into?” Prior to the pandemic, a global supply chain disruption was viewed as unlikely. However, recent world events have demonstrated just how fragile the supply chain can be when the unexpected occurs and the value of strengthening your most important lanes, cargo and partnerships.
You should also determine whether you are optimizing available resources when managing your supply chain. These resources may include third-party logistics providers, regional distribution centers, and other assets that may be able to help you reduce costs over the long-term.
Once you have conducted a top-down analysis of your supply chain, consider how you can improve management processes with logistics technology.
3. Leverage the Power of Demand Planning
While you are likely already analyzing past demand data for forecasting purposes, modern logistics technologies will enhance your efforts and give you increased visibility and foresight when making decisions.
These solutions exist to help increase the accuracy of your forecasting capabilities, which will allow you to significantly improve your supply chain efficiency. Data-driven demand planning will also help you avoid product shortages, thereby preserving your brand reputation to the public.
The most comprehensive demand planning strategies not only account for fluctuations in consumer desires but also allow you to overcome seasonal and location-specific trends or rate hikes that may cause disruption to your business or industry.
A few examples include holidays, seasonal increases in traffic, predictable upticks in inclement weather (e.g., hurricane season), and traditional contracting seasons.
4. Enhance Cost Awareness
Due to the sheer complexity and length of logistics and supply chain management, data can often become disjointed, segmented, and difficult to condense.
As a result, members of your organization’s leadership may only have limited awareness into their supply chain-related expenses. For instance, a regional distribution manager may have little to no knowledge of last quarter’s oceanic shipping costs.
To convince C-suite executives and senior leadership to adopt new logistics technologies, you must make a concerted effort to increase cost awareness. By giving these decision-makers access to more complete financial data, you can demonstrate the value of these investments over time and propose the opportunity it would then give your business to innovate.
5. Identify the Right Technology
The strategies outlined above are designed to address key organizational pain points.
By following this roadmap, you can begin to systematically identify inefficiencies, such as an overreliance on the spot market or non-optimized supply chain management practices. You can then leverage that data to quantify the costs of these inefficiencies and make positive changes within your organization.
However, you must first identify the right logistics technology for your organizational needs before you can put these tactics into action. While there are many logistics solutions on the market, only a select few can genuinely enhance your company’s supply chain management capabilities.
Teams like NYSHEX are committed to helping clients manage the most important and unreliable sector of supply chain management: ocean freight.
Our platform ensures that your cargo moves as planned through two-way committed ocean contracts. NYSHEX clients reap the benefits of a 99% contract fulfillment rate and 100% landed-cost certainty, which translates to significant cost reductions and improved supply chain efficiency. By utilizing our platform and many others, you can avoid the risk associated with the spot market, enhance cost awareness, improve your demand planning capabilities, and streamline your current supply chain management strategy. If you would like to learn more about our unparalleled logistics technology, request a demo today.
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