Consistent cost reduction and optimization without increasing logistics risk can only be achieved through a reasonable combination of industry analytical structures, the right technological tools and logistics processes, designed to improve efficiency, as well as reducing costs, temporary including.
A graphic illustration of any global logistics operation with its complex network of suppliers, warehouses, distribution centers, service operations, transport routes and nodal points can show a complex map, where individual costs are difficult to separate and understand. In the world, где логистические расходы обычно составляют от четырех до пяти процентов общих затрат производственной фирмы, increasing complexity of the global supply chain puts increased pressure on margins.
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Businesses typically implement transformational technology solutions or partner with a third-party vendor to manage costs. However, many organizations fall short of their savings goals. Why?
Good growth, but…
As supply chains become more global, логистическая сеть пополняется новыми маршрутами и местоположениями. Each new link in the supply chain has its own challenges regarding the availability of logistics assets., local laws and regulations, infrastructure and other.
Other factors create additional problems. for example, finding suitable service providers – more complex process, than before. Besides, manufacturers need to conduct periodic risk assessments, to guarantee, that natural disasters, political events and other factors, beyond their control, do not appear as an emerging threat to production and sale.
Three-pointed weapon versus difficulty
Most organizations try to harness complex supply chains, deploying costly technology tools, нанимая консультантов для реорганизации бизнес-процессов или, в последнее время, развертывая экзотические аналитические структуры.
None of these solutions alone can provide savings, necessary for that, to surpass the competition in this new, a more complex and more competitive economy. Smart mix of processes required, analytics and technologies to simplify logistics networks, reduce the risk of logistics and optimize associated costs. We call this the 3-Pillar Holistic Approach.:
1. Process design and development
Smart processes – the key to more cost-effective operations. It means, that organizations, serious about building smarter and more efficient networks, you need to analyze your operations in detail, before starting any reconstruction of logistics processes. This includes in-depth analysis:
- Develop a detailed view of the process activity (carrier identification, analysis of logistics costs, etc.. d.);
- Define KPIs, such as use of assets and average load time, and then link them to specific business results of expenses;
- Identify the Driving Forces of Outstanding Cost Effectiveness; eg, building several scenarios "what, if "for networks, for subsequent cost impact assessment;
- Comparison of industry standards for cost management, to understand the current performance gaps;
- Implement best practices to reduce costs and maintain process productivity.
company, who spend time on detailed and thorough analysis of transactions from start to finish and around the world, can give a deep understanding, which will support the new, more efficient and less expensive logistics network. Analyzing current processes, organizations can identify the steps in the process, where money is leaking. Some steps in the process may have little or no benefit.; others may require assistive technology tools, to maximize efficiency and profitability.
Here are some real-world examples from deep analysis.:
- After that, as a large pharmaceutical company conducted a thorough analysis of the logistics processes for the acquired company and the standardized processes, she was able to identify opportunities to optimize costs for 25 percent.
- Chemical industry leader achieves five to seven percent savings through process overhaul, related to the frequency of shipment, reassignment of supplier-warehouse combinations and organization of "milk transportation".
- Life Sciences Specialist Identifies 13% Potential Savings on Basic Freight Costs, analyzing logistics management processes and finding opportunities to increase cargo consolidation.
2. Analytics
Using analytics platforms for cost benefit analysis is a powerful factor in reducing overall costs. Network structure analysis, route selection / regime and analysis of logistics costs – here are just some of the areas, where you can use analytics. For businesses to be the most efficient, они должны использовать инструменты, которые могут моделировать различные сценарии различных параметров, таких как полосы движения, маршруты, ограничения инфраструктуры, customs clearance methods, logistics modes and asset utilization. With this data, the logistics organization can better understand the impact of costs from different combinations and design their networks accordingly.
A number of cost analysis tools are currently available, including network optimization, search for carriers and analysis of freight traffic. Выбор инструмента логистической аналитики должен основываться на: 1) его способности быстро изучать различные сценарии «что, если», to make processes more efficient in achieving business cost results, and 2) its ability to identify risks and assess the cost impact of such risks on logistics networks.
for example, one chemical manufacturer created and analyzed several scenarios for distribution centers, optimization efforts have resulted in savings 17 percent. Another manufacturer used analysis to determine recoverable costs from suppliers, and then created detailed reports and dashboards, to increase the transparency of the various components of logistics costs.
3. Resolution technologies
Technologies in the absence of a deep understanding of the processes can be ineffective for optimizing logistics costs. Простое обновление программного обеспечения без улучшения процессов может на самом деле усугубить проблему, as employees try to make old processes work with new tools, rather than using tools to support more efficient standardized global processes. Consequently, when choosing a technology, it is necessary to be guided by the ability of the tool:
- Simplify processes (reduce the number of gears, approvals, automate process steps);
- Faster exception handling (fewer exceptions, automatic resolution of frequently encountered exceptions);
- Reducing system complexity / applications (standard interface, fewer middleware applications required, improved workflows).
New challenges, new approach
Global logistics networks – it is a complex evolving creation. If a business wants to build a best-in-class network, he needs to deeply understand the risks and costs, related to multiple logistics partners, geographic regions, products and technological tools. At the same time, an organization cannot rely solely on processes or technology to deliver comprehensive improvements., which translate into real cost savings.
Consistent cost reduction and optimization without increasing logistics risk can only be achieved through a reasonable combination of industry analytical structures, the right technological tools and logistics processes, designed to improve efficiency, а также уменьшения финансовых затрат.
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