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These Supply Chain Concepts Are the New Definitions to Live By Featured

These Supply Chain Concepts Are the New Definitions to Live By "Sparks flying from a bunch of lit sparklers for celebration."

The coronavirus pandemic (COVID-19) wreaked havoc in many areas of society. However, one of the areas that were affected the most is the transport and logistics sectors. In some countries and within the US, for instance, transport of products and goods almost came to a standstill except for some essential products and services that were needed to solve the health problems experienced at the height of the pandemic. While the essential services were given priority, they also struggled to deliver the necessary products. Like transportation services, manufacturing also suffered due to challenges in supply chains, which affected the availability of raw materials. These supply chain concepts are the new definitions to live by if you are to survive in the event of another disruption.

Supply chain transportation management

Supply chain transportation management is the organization of transport of goods from suppliers to manufacturers to wholesalers and ends up to the consumers. It is a crucial part of managing the supply chain to ensure goods are efficiently shipped at an affordable cost and to the destination or where they are needed. Transportation consists of decisions that are often necessary due to costs, logistics planning, and broader purchasing, all of which are integral to transportation.

Managing supply chain transportation

Managing a supply chain is a complex process, and solutions to this range from spreadsheets to elaborate transport management systems (TMS) used by large companies like Walmart, which controls a huge supply chain. Walmart has a mechanism for managing supply chains in-house, unlike others that use external logistics specialists. Due to the complexity of managing supply chains, some companies decentralize their operations hence the need for proper planning of teams, shipping routes and systems. While larger organizations require TMS, smaller ones find this difficult due to cost implications.

Balancing Act of Time vs Cost

The ever-increasing demand makes the companies struggle to reduce shipping and delivery times. There is also the complexity that comes with omnichannel marketing, customers' expectation of direct order and delivery of packages, and the need to send bulk stock to retail stores. Although other companies, such as Amazon, avoid the dilemma by focusing on direct marketing, others like Walmart use a nationwide chain of stores to dodge the complexities. However, other organizations develop omnichannel strategies to remain competitive. Coming up with a perfect transportation strategy in such circumstances is difficult without the help of logistics modelling software which determines answers to questions like profit optimization while meeting customer expectations.

Globalized supply chain

The coronavirus pandemic has disrupted the international and national supply chains and transportation. Therefore, supply chain managers must seriously review the globalized supply chains and their efficiency. With the advances in globalization, almost all major companies have extended their supply chain, and most now depend on Asian suppliers. However, dependence on a single supplier means that obtaining products from a single source without a backup strategy can be challenging in case of a disruption. Organizations need to rethink how the global supply chains work. Although it is not wrong to have a single supplier for a given product, it is good to have an alternative as a risk mitigation strategy.

Predictive and prescriptive analytics solutions

The complexity of supply chains makes it nearly impossible to compete using traditional approaches. Therefore, there is a need for a more intricate solution to predict optimal supply chain routings, mainly taking advantage of prescriptive simulations and models.

The Need for Predictive and Prescriptive Analytics Solutions

The complexity of supply chain transportation management systems together with supply chain intricacy indicates that a different approach is needed. While there may be good reasons for separate TMS and supply chain software solutions, the degree of interdependency between these solutions highlights the need for increased visibility into both the supply chain and transportation logistics. The analytics platforms incorporates financial impact analysis and inputs in addition to other areas outside the supply chain.

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Scott Koegler

Scott Koegler is Executive Editor for PMG360. He is a technology writer and editor with 20+ years experience delivering high value content to readers and publishers. 

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