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Proven Ways to Grow your Freight Brokerage Business

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3pls, Archives, Global Logistics, Global Trade Daily

Proven Ways to Grow your Freight Brokerage Business

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A quick look at the current shipping industry will show you that there is no shortage of freight brokerage businesses. Numerous companies offer their services all around the world, with various degrees of quality and cost. So, among all that competition, is there a way for you to grow your freight brokerage business? The short answer is yes, there is. But, like with most things in freight shipping, it is not going to be easy.

Understanding the ongoing changes in the freight industry

Growing your freight brokerage business is a multilayer process that we will elaborate on in the following passage. But before we do, it is important to give you a perspective of what the current shipping industry is like. Even before COVID-19 hit, the shipping industry as a whole was experiencing some significant changes. So, while we will go over the most notable aspects, keep in mind that these are just some broad strokes. Technological advancements, both in logistics and in shipping capabilities, came as quite a surprise.

Developments in AI allow for a much greater sense of efficiency and safety, which is why future freight companies won’t be able to stay competitive without it. Eco-friendliness is also a significant concern as fossil fuels tend to be the least-favorite choice among the current companies. We are still far from relying solely on renewable energy sources, but energy development is going in an eco-friendly direction. The final point to keep in mind is that modern customers’ demands are higher than ever. Due to offers like overnight shipping, customers have grown to expect a high degree of service. So, if you are going to stay competitive, you need to ensure top efficiency.

Grow your freight brokerage business – step by step

Seeing how big the freight shipping industry is and how many emerging technologies there are, you shouldn’t try to tackle all of it. The safest way to grow your freight brokerage business is to outline a particular aspect of freight shipping and excel at it.

Step 1: Identify your target audience

Who your target audience depends on numerous factors. Your location, which services you have available, which industries are predominant in your area, etc. If you wish to grow your freight brokerage company, your primary job is to first outline your target audience. The clearer you can pinpoint to whom you can cater your freight brokerage service, the better. Seeing that finding new customers will likely be an ongoing task, we suggest that you outline the “Ideal customer”. That way, your employees can more easily identify potential customers.

Step 2: Outline their needs and requirements

The second step you need to take is to clearly outline the needs of your target audience. You will likely have an idea of what they need. But you won’t have the complete picture until you start doing research and asking questions. Most agents will be more than happy to outline their needs and whether the current provides are satisfactory. Some might even give you ideas on which services are most lacking and where you can easily get ahead of your competition.

Step 3: Improve your technology so that it can facilitate the needs of your customers

Once you understand the needs of your audience, you need to alter your company so that it can best fulfill them. By this, we mean implementing new technologies that allow for more efficiency. Apart from logistics technologies, you can look into CRM solutions and communication technologies to help your customers more expediently.

Step 4: Tackle marketing with due care

One of the common mistakes people make in the freight industry is not tackling marketing with enough vigor. Believing that having a simple website or running a social media profile is enough for a serious company is something you ought to avoid. To draw in and keep your audience, you need to run an active website. This not only means tackling your SEO and posting the necessary blogs. But also managing your social media and ensuring that you have the proper brand recognition. Good freight brokers know that projecting an idea of efficiency and stability is essential to drawing in new customers. And the only way to make that possible is to adapt your online presence to your needs and ensure that your marketing is on point.

Step 5: Set up performance metrics and keep track of your endeavors

Finally, to ensure that your effort produces results, you need to set up performance metrics. Besides measuring how many new customers you get each month, you also need to track how effective your marketing is. Even in B2B marketing, you need to invest substantial funds to develop an online presence. So, do yourself a favor and ensure that your investments are paying off. By setting up clear performance metrics, you can see how your business decisions impact your revenue and whether you need to make any alterations.

Final thoughts

The main point to keep in mind to grow your freight brokerage business is to stay within your niche. The better you can outline what your target audience needs, the easier it will be to make cost-effective business decisions. If you manage to become the top local freight brokerage business within an area, we are sure that you will have no problem spreading your business out to other areas. But, it is essential to develop a healthy base and a firm understanding of what your customers need. Modern industry requirements don’t allow you to spread yourself too thin. Doing so is not only ineffective but is likely to cause you substantial loss in revenue. And seeing how fierce the competition is, it has become more important than ever to excel within a relatively small niche.

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Ryan Smith has worked as a shipping manager and a logistics consultant for over 20 years. He now focuses on writing helpful articles for tbmoving.com and other relocation and shipping companies, as well as providing consultation for large-scale logistics planning.

data
3pls, Archives, Global Logistics, Global Trade Daily

THE SOLUTION TO MITIGATING RISKS FOR TODAY’S 3PL COMES DOWN TO DATA

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Gaps in operations are not biased. Whether you are a warehouse manager navigating scheduling oversights or a fleet manager solving the next best approach to reducing costs, gaps in operations within the global logistics arena are inevitable. The real concern is how the modern-day 3PL provider can successfully mitigate risks while minimizing common gaps before they become a critical problem. 

Until one can jump to the list of solutions ranging from technology applications to hybrid work models, the most common (and possibly least talked about) gaps must be identified. Taking it a step further, 3PL providers should have a solid understanding of the why behind the what. In other words, they should ask themselves: Why are these gaps present within our operations and can they be resolved? Are these gaps common within the industry or are they unique to my company?

“One of the bigger gaps in the industry is the availability of timely and accurate data back to the shippers and to the community,” states Jason Carl, vice president of 4PL Solutions at BridgeNet Solutions. “3PLs are sitting on a wealth of data and information, and the ability to harness that effectively has always been a gap from my perspective. Delivering standardized timely information and data makes all the difference for a shipper in today’s environment.”

Carl has more than 15 years of experience in the logistics arena, ranging from ocean exports to operations. He originally started his career with Evergreen Line before moving on to BDP International for 13 years, managing operations for several multinational clients. He moved to BridgeNet two years ago to head the 4PL product.

BridgeNet Solutions, a wholly-owned subsidiary of BDP, provides sourcing, outsource sourcing procurement and managed transportation services focusing primarily on data analytics for more effective supply chain management.

BridgeNet’s cloud-based data solution, Xonar, is the company’s analytics and execution platform based on a foundation of accurate data collection combined with a robust analytics layer. Xonar enables BridgeNet to effectively collect and share critical information from shipper ERP systems, 3PL providers and freight payment companies. Carl cites this solution and the above capabilities as a game-changer for the company among competitors.

“Oftentimes what you find is that providers offering these solutions could be largely just software as a service or a technology company,” he explains. “At BridgeNet, we extend both the technology and the execution components to our customers, ensuring they can rely on an excellent integration hub paired with customizable technology based on the customer’s needs. We also offer a network of control tower operations based in Asia, Europe and the Americas to oversee that and to orchestrate the flow of information that’s moving through Xonar on a day-to-day basis.”

To be successful at identifying and eliminating common gaps in processes, the provider must consider the quality of the information coming in and going out. It is critical the provider understands where this information could be compromised–or even worse, completely missed. 

“3PLs need to understand the why,” Carl says. “Not just at the strategic level but also down to the desk level. It enables better decision-making on a day-to-day basis that really benefits shippers in ways that are often overlooked. The quality of the data can be a game-changer for planning processes and for decision-making overall. There is an increased recognition of that at least in the conversations I’m having.”

Beyond closing gaps in operations and day-to-day processes, Carl emphasizes the importance of looking at the big picture rather than just the result, citing innovative technology as a distraction for what is really going on layers deep within a data solution. 

“If the underlying data is not high quality, not standardized, not tightly controlled, then it’s not going to yield the results that providers want to achieve from that piece of technology. The value of that underlying information cannot be discounted. Before you go on the tech journey, providers should focus on the information that is going to fuel operations. This is where 4PLs can step in.”

As for the role of the 4PL provider, they are part of the bigger picture of where your data is coming from and what it all means. Data translation is equally as important as data collection. If a provider cannot identify the value from the data, the role of analytics becomes a moot point. That’s why Carl emphasizes the need to look and think outside of the box for solutions that are not only more cost-effective but add significant value to client needs. 

“4PLs can act as a translator or the intermediary to help provide data-driven insights to shippers by standardizing information from a multitude of 3PLs and then translate shipper’s needs and strategies for actionable change from the 3PL,” he says. “This bridge between the two entities can be a great help but it is not always the right fit for every shipper or for every supply chain. There are many situations where, now more than ever, a 4PL provider can provide a lot of value and support for 3PL operations and processes.”

Whether it is a pandemic or random disruption (think Suez Canal), the conversation of eliminating gaps in operations would be incomplete without addressing how the logistics industry has shifted looking back at the last year and a half. Buzzwords such as “agile” and “adaptable” might very well be accurate, but in what ways are 3PL providers being challenged to maximize their position in a competitive market? Carl points to letting go of the past as many companies still utilize lessons learned to affirm the success of the future.

“Gone are the days where the 3PL can rest on proverbial laurels and be complacent based on past success and relationships,” he warns. “The past 18 months have proven this. The existing network that 3PLs may have been operating for a customer for many years may no longer be sufficient in 2021. The needs are going to change, and it’s important that 3PLs are responding effectively to compete and be good partners for the shipping community.”

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Jason Carl is vice president of 4PL Solutions at BridgeNet, a BDP International company, where he oversees the development, performance and operations of the 4PL product and global control tower teams. He has more than 15 years’ experience helping customers improve and optimize complex supply chains through technology and process optimization. Carl holds an undergraduate degree in Economics from Austin College in Sherman, Texas, and an MBA in Strategy from Temple University’s Fox School of Business. He can be reached at jcarl@bridgenetsolutions.com. 

industry
3pls, Archives, Global Logistics, Global Trade Daily

How to Lead When the Industry is Volatile

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In 2011, Prince William was marrying Kate, investors’ eyes were on Greek Prime Minister George Papandreou, and global trade experts were predicting a volatile 2012.

A decade later, Prince Harry just welcomed his first child with Meghan, Greece is still in the EU, and global trade experts are predicting a volatile 2022. 

As the saying goes, don’t wait for the storm to pass — just learn to dance in the rain. For the global trade industry, this translates into: get used to the volatility.

To build a truly sustainable supply chain in an era where the only stable prediction is instability, company leadership must embrace flexibility. Creating an agile organizational structure that’s ready to adapt at the drop of a hat (or the obstruction of a barge) ought to be considered a critical task for any workforce in the industry. Because — and this is the last quote I’ll reference, I promise — as General Electric’s Chief Innovation Officer Sue Siegel said in a 2018 keynote address, “The pace of change will never be as slow as it is today.”

The experts, however, got the cause of the volatility wrong back in 2011 — they thought it would be inflation. Who would have predicted the COVID-19 pandemic, or the Suez Canal disaster? 

Company leaders who pay attention to the growing data on worker productivity and how they rate their satisfaction on their work/life balance will continue to embrace work-from-home culture (now referred to as WFH by those in the know), instead of dismissing it as a temporarily allowable measure during the pandemic.

Within my own company, until last year we enforced a strict policy of keeping computers at the office — we’d decided the risk of damage during transit and at home was just too great. The pandemic forced us to reverse that policy in an instant, on a Thursday in March, without time to prepare. But we haven’t had to replace any equipment yet; it turns out adults can be trusted to take care of their valuables — and to roll with the punches. When I reflect on the resiliency our employees have demonstrated over the past year, I’m amazed.

In fact, I think the first subheading in the economy section of the 2020 history books will be “WFH.” Employees appreciate the flexibility, and those who benefit from mental and physical health-related workplace accommodations are thriving under the ability to create their own schedule and work environment. 

Meanwhile, COOs are shaking their heads wondering why we’ve been paying for all this office real estate over the years.

Leadership coaches have long preached that innovation is prevented when you’re comfortable with structure, and 2020 forced every member of the team to learn this lesson head-on.

Another takeaway for company leadership that the talking heads have been leaving out of their morning segments is that providing total visibility to clients and customers is the first way to ensure viability during a disaster. Yes, you may get an earful at the time when delivering bad news — but they’ll appreciate it in the long run (and trust you more for it) because a sugar-coated status report doesn’t allow managers to make the best decisions possible for their projects. 

Time for one more?

Those whose leadership style leans toward positivity were more likely to see their staff weather the 2020 storm. In a crisis, employees want to grab onto hope — it’s your duty to serve as their cheerleader. At the same time, make sure you have an outlet to vent that frustration away from work, lest you compress yourself into a powder keg that creates an entirely different problem down the line. 

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Richard J. Bolte, Jr. was born in Philadelphia in 1957 and joined BDP International in 1973. Throughout his 47-year career with the company, he has held positions covering a broad range of the firm’s operations in global logistics and transportation. His formative experience at BDP centered on ocean exports and supply chain management, with particular emphasis on company operations. Rich was Vice President of the company’s Northeast Region before taking the position of Chief Operating Officer. In 1996 he was named President of BDP International.
 

In 2006, Rich Bolte was named BDP’s Chief Executive Officer; and subsequently, in 2013 the Board of Directors appointed Rich as BDP’s Chairman & CEO. He now serves as the organization’s Chairman to the Board. Rich championed BDP’s global expansion, and the company now employs nearly 5,000 employees in 135 offices throughout nearly 40 countries. He can be reached at rich.bolte@bdpint.com.

preparedness
Archives, Global Logistics, Global Trade Daily

Pandemic Preparedness Plans: 3 Things to Consider

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The pandemic showed us how quickly consumer behavior can shift — or stop — on a dime. As part of the Strategic Partners team at Arrive Logistics, I focus on growing and strengthening partnerships with our enterprise shippers and carriers by tailoring unique solutions specific to their organization, industry and logistics challenges. While many of these organizations were forced to adjust to a new normal, the question of “What if there is another pandemic?” has inevitably been raised. With science suggesting this is a likely possibility, it’s important that all organizations have a supply chain pandemic preparedness plan in place tailored to their specific needs and how they operate. These plans should focus on three elements:

Scope of Supply Chain

Understanding the elasticity or inelasticity of your product in a pandemic and how nimble your organization can be, is key. For example, let’s consider a food packaging company whose business is split 50/50 between food service and CPG customers. When a disruption like a global pandemic shutters restaurants at a moment’s notice, do they have the ability to change their food service production lines over quickly to minimize waste? In this case, the biggest hurdle to shifting half their lines from gross production to CPG would likely be packaging. Knowing now what a disruption of this caliber may require, food packaging companies should be looking at how they can plan for future production shifts.

When you’re considering the scope of your supply chain, a contingency plan that allows you to shift your production model efficiently can save time, money and resources.

Supplier Relationships

In an extraordinary situation like a pandemic, relationships with suppliers are put to the test. As you put your pandemic preparedness plan together, consider what your relationships with your suppliers look like throughout the supply chain. Do you view your suppliers as simply service providers needing to come down in price, or do your suppliers view you as a close partner where you regularly talk about your business needs? When you encounter a disruption, is the goal to save money, or are you focused on protecting service and ensuring on-time delivery for customers?

Based on your responses to the above questions, you need to determine how best to forge deep relationships that allow you to lean on your partners when necessary to continue meeting business goals. Is meeting quarterly for business reviews an option? Are you talking about how suppliers are creating their own pandemic preparedness plans, and are you aligned on the procedures they have in place? Answering these questions before you need to will allow you to create a pandemic preparedness plan that is agile and effective. Then, when things change, expectations are clearly understood from the start.

Inventory Strategy

A pandemic preparedness plan needs to reflect your inventory strategy. As we’ve seen over the past year and a half, the pandemic exploited the “just in time” approach to inventory that a lot of companies have adopted since the 1970s. Can your inventory strategy stand up to months of backorders and constantly changing consumer habits?

Your strategy should address how much inventory to carry and where to carry it and, if the inventory was previously outsourced, you need to flesh out the details for how you will now bring that inventory strategy in-house.  As you begin to plan, you should consider whether you have enough inventory to carry you through another global disruption, if you have the option to own your inventory instead of outsourcing it, as well as your ability to implement a direct to customer or drop-ship option to get your product to customers on time.

Much like weather contingency plans, pandemic preparedness plans are likely to become a staple in the supply chain. As we take time to review the learnings from the current pandemic, it’s important your organization considers how to put in place a plan that is tailored to its specific requirements to help thwart the level of disruption we saw in 2020. By evaluating the scope of your supply chain, your supplier relationships and your inventory strategy upfront, you’re setting your organization up to survive the next global disruption.

material handling
Archives, Global Trade Daily, News

Material Handling Equipment Market Revenue to Hit $200 Billion by 2027

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The global material handling equipment industry is touted to gain massive proceeds over the coming years, owing to the expanding e-commerce sector and a subsequent increase in the automation of warehouses for ensuring on-time shipments and deliveries. The surging popularity of warehouse automation for streamlining the process of material handling is expected to stimulate industry growth.

According to the latest study by Global Market Insights, Inc., the global material handling equipment market size is projected to surpass USD 200 billion by 2027.

This growth is attributed to an increase in the adoption of acquisition and merger strategies by key material handling equipment manufacturers.

For instance, in April 2017, A.T.E. entered into a collaboration with Jost’s Engineering Company Limited for bringing the best material handling equipment to the textile industry across India and Bangladesh. The deal helped in enhancing the penetration of a range of products such as electric forklifts, racking systems, reach trucks, custom-built trucks, hand pallet trucks, scissor lifts, and others in the region.

Moreover, various integration technologies, comprising IoT and RFID, into the equipment will also play a pivotal role in augmenting material handling equipment market revenue through the estimated span.

Some major trends impelling material handling equipment industry expansion comprise:

Globally expanding 3PL industry

The expansion of the 3PL market at the global level is expected to augment the product deployment in distribution centers and warehouses, spurring material handling equipment market share over the coming years. Given that online retailing is in high demand, various companies are leveraging the advantages of third-party logistics providers for catering to an upsurge in the demand from consumers.

This, in turn, is expected to encourage 3PL service providers for the modernization of their storage facilities and warehouses so as to ensure fast and on-time delivery of shipments. Material handling equipment enables people to proceed with the efficient unloading/loading of products from transportation trucks, storing products at large heights in racks, and moving products easily throughout the facility through constrained spaces.

Surging demand for industrial trucks

An escalation in the demand for industrial trucks, that allow the transfer of heavy goods in an efficient and easy manner, is expected to drive material handling equipment market share through 2027. In addition, there is an increase in the demand for automated guided vehicles as they carry loads along the floor of the facility without the requirement of an onboard operator or a driver.

These vehicles are operated by means of an integrated system of hardware and software components. Furthermore, advancements in the sensor industry are set to fuel the research and development associated with AGVs, bolstering business expansion through the assessment period.

Expanding manufacturing sector in Latin America

Latin American material handling equipment industry is poised to register commendable growth through 2027, owing to the expansion of the manufacturing sector in the region. Mexico stood first amongst the trade partners of the U.S. in total trade in 2019 with a value amounting to USD 614.5 billion.

Moreover, the demand for bulk material handling equipment from the expanding processed foods industry is likely to boost the business landscape in the region. In addition, various regulatory bodies are encouraging the expansion of the overall industrial sector, increasing product adoption through 2027.

Source: Global Market Insights, Inc.

business intelligence
Archives, Global Trade Daily, Special Reports

Five Business Intelligence Tools to Save Your Bottom Line

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In the rollercoaster ride of the last year, CPG e-commerce has had its moment of digital reckoning: the way consumers shop will never be the same.

Close on the heels of this realization is the recognition that better business intelligence is the foundation of success. CPG companies that are unable to move quickly and be nimble in the way they respond to consumer trends and market pressure will struggle. It’s that simple.

Moving quickly and being nimble hinges on gathering and analyzing data. And not just any data: actionable, valuable data that drives better decision-making.

This is the power of business intelligence—and Line Item unlocks it for CPG e-commerce. Line Item is a performance analytics platform that enables insight into e-analytics and product attributes to drive revenue and profitability. It’s packed with five essential business intelligence tools that can help CPG brands grow sales and boost profitability in a turbulent and competitive market. Let’s take an in-depth look at each of these business intelligence tools and why they matter.

1. Better search engine optimization strategy.

Consumer behavior and preferences are changing faster than ever before, sometimes even day to day. In such disruption, it’s not enough to “set it and forget it” with your SEO strategy. CPG companies need to be responsive to changes in the market and ensure that their brands and products are ranking in search results. Without this kind of SEO business intelligence, competitive edge is lost.

Line Item is the answer to better SEO strategy. It analyzes whether or not your brands or products are ranking on page one, across search terms and platforms. This is important as the elephants like Amazon and Walmart.com aren’t only retail sites, they are also where (increasingly) shoppers are doing product research. With Line Item, you can understand which search terms are working as well as which your competitors are using. Line Item also ensures that your product titles, descriptions, and images are complete and consistent, closing the gaps that can cost you page rank and sales, ultimately affecting your bottom line.

2. Superior insight into pricing.

There’s a reason that pricing is one of the “four P’s” of marketing: it’s the lever that drives profitability. Price your products too low and you’re leaving money on the table. Price too high and competitors will win your sales.

In a market where demand and preferences fluctuate so wildly, though, business intelligence on pricing becomes a complex challenge. This is where Line Item comes in. With it, you can verify item pricing, selling price, and list price across your portfolio and across platforms. You’ll have better business intelligence to price your products correctly and competitively to protect your profitability.

3. Third-party activity monitoring.

The CPG e-commerce market is many-layered and complex. Third-party sellers account for significant sales activity, but consumers aren’t often aware that they’re not purchasing from you directly. To protect your brand, you need better business intelligence to monitor online activity.

Line Item gives you the visibility you need to monitor unauthorized selling activity on the web, or to determine whether third-party sellers are undercutting your price. This helps you protect your brand and the bottom line.

4. Deep dive into product attributes.

Do you know what’s really driving product or category value? Without powerful business intelligence, it can be impossible to truly tap into why consumers are choosing one product over another.

This is where Line Item really stands out. Line Item can analyze all similar products in a category, item by item, to determine all relevant attributes. These could include brand, form (liquid, powder, or capsules, for example), package type and size, scent or flavor, natural or organic ingredients, and other attributes. Think whitening or foaming agents for toothpaste, sensitivity for personal care products, and more. This robust business intelligence can help inform product development, packaging, marketing and promotions, personalization and much more, across your portfolio and your brand. It gives you an advantage in meeting the market at the right moment with the right product.

5. Promotions analysis.

Are your promotions paying off? This may be a simple question, but it’s difficult to answer in this accelerated and disrupted market.

If your promotions aren’t, you’re wasting marketing spend, and you need to know why. Line Item can tell you if your campaigns are working, which keywords your competitors are using, if long tail keywords are worth investing in and more. When your campaigns are driving your bottom line, you know they’re working—and Line Item makes it possible.

CPG brands can’t afford to be working with yesterday’s tools. Better business intelligence is fundamental to a better bottom line. Line Item is your lifeline to more profitable e-commerce.

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About Ironbridge Software

Ironbridge Software was founded in 1989 by Mike Dickenson. Mike’s unparalleled expertise and passion for technology led him to create the first-ever analytical solution for the Consumer Packaged Goods Industry.

supply chain
Archives, Global Logistics, Global Trade Daily

The Four Levels of Supply Chain Risk

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Supply chain risk comes in many forms – from industry-crashing crises to supplier challenges. To manage it effectively, you need to assess it at every level.

Supply risk can take many forms and can manifest anywhere in the supply chain process. So, to be effective, supply risk management must be built around a framework that evaluates and assesses risk at every level – from overall risk exposure across the value chain, right down to the individual supplier level.

A holistic approach to supply risk management is built around four different levels of supply risk. Here is a look at how those levels break down, and how building your own risk management framework around them can help you develop a holistic view of risk across your supply chain.

Level 1: Value Chain Risk

A common pitfall in supply risk management is assessing risk at an individual supplier level first, then working your way up to developing a holistic risk view. But, in practice, assessments should always start at the value chain level.

By starting with a broad, comprehensive evaluation that considers the full stream of activities required to supply or ‘develop’ a commodity or category, you can establish a deep understanding of the factors, drivers, and variables that can influence it.

Assessing the value chain at this level enables you to look beyond simple economic factors, and encompass a huge range of additional quantitative variables, such as political, social, and regulatory factors.

We start at this level because it enables us to better understand the context and potential impacts of each variable and factor. By looking across the value chain, we can more clearly identify the knock-on impacts of each driver, and truly understand the threat they pose to operations.

That’s not just valuable for shaping your overall risk management strategy – it’s hugely valuable information that will help you better identify and prioritize high-impact risk factors as you work your way down to supplier-level assessment.

Level 2: Category risk

The next logical analysis level is category risk – which is to recognize the inherent factors that influence risk for a specific category. Practically, this requires a deep understanding of both the economic model that underpins a particular category and the specific influencers of those economics.

Here, the starting point is to construct a thorough Should-Cost Model for your category. A strong cost model provides deep insight into what makes up the economics of a product or service – at a line-item level – and provides insights into the key drivers of category economics.

But building that model is just the beginning. What you do with the model – what you learn from it – is where the real value is. By conducting a thorough trends and dynamics analysis, you can build up an understanding of the dynamics that can influence the cost levers that make up your model. Then, you can start identifying which changes and trends are worth looking at, and why.

Level 3: Supply base risk

With the value chain and category analyses as the foundation, attention must now turn to assess risk across the supply base. Critically, this isn’t a one-off exercise – it’s a continuous process, where organizations constantly evaluate and re-evaluate their supply base.

This is where supply risk management gets challenging – and technical. Many organizations have hundreds of suppliers to manage and keep track of, each with a unique risk profile. To build a complete, up-to-date view of risk across them, your team will need some help.

Fortunately, AI and the development of new consumerized dashboards are now making continuous assessment a practical reality, even for companies with extremely large supply bases.

These executive-friendly dashboards are tremendously valuable – but only if they include both financial and non-financial business variables. They should largely be automated, but also enable human input and intelligence, providing a holistic ‘health screening’ that flags key variables and changes across the supply base.

Level 4: Individual supplier risk

Another big advantage of using AI and dashboards to automatically assess risk across your supplier base is that it can help surface the individual suppliers that most need deep individual analysis, so that the right strategic decisions can be made about them.

Historically, supplier risk assessment entailed a cursory credit check, some sort of basic financial evaluation, or an outreach to the suppliers themselves for more information. Today, however, there is a far wider toolset available to procurement executives, enabling them to consider both the quantitative and qualitative factors that make up financial sustainability and business viability.

To understand those factors, teams must ask a demanding set of questions; How does this supplier relate to its competition? How much cash is on hand? What are their key ratios? What are their debt risks? How has the company developed year-on-year? Are there any external factors that will impact the company’s financials?

In other words, not only financials, but also business, operational, and competitive assessments must be factored into the discussion. This kind of holistic assessment is essential at the individual supplier level. Of course, this will not be needed for all suppliers, but it will be needed for the most strategic (or the most problematic).

Take a comprehensive look at supply chain risk

Want to learn more about the four levels of supply chain risk, and discover what it takes to build and execute a robust, future-ready risk strategy in today’s increasingly vulnerable and crisis-prone supply environment?

Get your copy of Risk & Your Supply Chain: Preparing for the Next Global Crisis and explore expert insights from The Smart Cube’s Omer Abdullah and Subash Chandar, designed to help you build a more resilient supply chain and prepare for whatever tomorrow may bring.

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Archives, Global Logistics, Global Trade Daily, Warehousing

Algorithms: How do they Contribute to Warehouse Preparations?

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To be considered efficient and profitable, a warehouse must achieve a certain level of productivity. It is therefore imperative to take note of any disruptions during the preparation stage: resupply must be anticipated and calculated as accurately as possible! But how does one optimize warehouse preparation operations? Managers are now using algorithms more and more, but what exactly do they contribute? What functions do they help automate? Here are some explanations from Generix Group experts.

Preparation shortages: a warehouse manager’s nightmare

A recent DataLab Generix Group assignment with one of the group’s clients demonstrated that disruptions in preparation were the primary factor in decreased productivity. It is therefore essential that preparers never find themselves in a position of having an empty or under-stocked warehouse, unable to meet order demands.

In such a case, they should make an urgent resupply request (which is always possible) and wait for a pallet to be brought down from the reserve in order to finalize the order. If the preparer can switch to another order, the process is not ideal.

To avoid this type of situation, two types of preventive strategies will be used: setting resupply thresholds and anticipating upstream calculations (e.g. from the day before).

Resupply thresholds

Resupply thresholds help to prevent product shortages. A specific setting will trigger a resupply action as soon as a minimum quantity or “resupply threshold” is reached in a picking location.

This is a specific action, which must take into account the capacity of the storage location. Clearly, it is impossible to place two pallets in a location sized for a pallet, but you can probably fit a pallet and a layer of cardboard boxes for example. Because the sizes of the locations, pallets and boxes are saved in the system, calculations are done automatically using simple algorithms that add up the dimensions of objects with a certain margin.

Anticipating preparation

When preparing for upcoming orders, a simulation tool can be used, which is also based on an algorithm. Its role is to simulate a wave of preparation from the order portfolio to be met. It deducts the total quantity needed for each item, verifies the remaining amount in the picking location, and automatically triggers a flurry of resupply missions, targeting orders to be met as quickly as possible.

This transaction can be calculated from the portfolio of orders already received in the WMS, but it can also be based on the forecast data sent by the ERP to the WMS in the form of a dedicated message. For example, warehouse consumption from the last week of a reference period deemed relevant can be used to take into account seasonality or any cyclical business model.

It is also possible to complete picking a day in advance. However, such a strategy can only work if you have time and resources. When operating in a tense flow, selecting truly useful stock replenishments is by far the best approach.

Supply “just in time”

When faced with tense and very high-load periods, WMS algorithms allow for even greater accuracy on the initiation of emergency resupply missions. This will ensure the optimal use of resources, focused on critical needs in real time.

This tool automates resupply management by letting the system trigger replenishments at the most appropriate time, as needed. The system is, of course, based on the theoretical data specific to each warehouse and the type of preparation management present. This algorithmic computational feature will take into account many parameters:

-priority modification by the preparer;

-comparison of stock and minimum picking;

-needs of the current wave;

-needs put directly on support tools in preparation

Based on these criteria, which can be prioritized by settings, the system will recalculate the needs of current preparations and set precise timing to initiate resupply. To illustrate the depth of this calculation, we can cite the consideration of elements such as time spent processing orders, changing products, changing aisles, preparing future actions in advance and even time spent on break!

Compliance with date contracts

The decision can be made to combine compliance of expiration dates and “date contracts.” In this case, a customizable safety margin is added to the expiration date in order to honor a customer commitment. It is a widespread technique in the field of mass distribution to ensure a certain shelf life, particularly critical for perishable foodstuffs.

This date compliance algorithm can also be applied to all warehouse operations, and is one of Generix Group’s WMS greatest strengths.

Waves of preparation

This is an essential step in optimizing work planning from a portfolio of orders to be processed. We select orders, or certain elements of an order, and choose a way to effectively manage their processing.

In order to make this selection automatically, we set up “waves” of orders. A wave is a selection from a portfolio, chosen based on several criteria. The primary planning obstacles here are:

-The latest target loading time;

-The carrier;

-The delivery rounds;

-Orders for fewer n parts or more x parts;

-Permission to have missing items;

-Complete pallets and full packages…

As a result, we can put procedures in place that have been inspired by TMS. In this case, we’re referring to “TMS-drawn preparation”.

The manager’s talent lies in his ability to adjust their tools to orchestrate this work according to manageable and adjustable time slots based on the workload of the day and the resources available. Traditionally, planning is done according to a daily or half-day schedule. However, anything is possible depending on the organizational model chosen by the manager. Moreover, it is also possible to choose wave models according to the needs of the given day.

The wave, of which the result represents a list of products to be prepared (or “queue”), is only the first step in the algorithmic calculation. This first calculation is not so much focused on the productivity of operations as on the priority of the orders to be served.

From this list, the system will calculate successive workflows of order groups: generating so-called “missions.” A mission is a to-do list that will be proposed to operators. This raises the question of how to arrange these tasks in a logical way to improve productivity in warehouses. It thus includes numerous parameters, including optimizing preparation routes or triangulation.

By automatically triggering replenishment actions, implementing compliance with date contracts or managing preparation locations, algorithms built into a WMS optimize the use of resources. They are therefore a real asset to best predict the flow of preparation and avoid warehouse supply shortages.

LEARN MORE ABOUT GENERIX GROUP’S WMS

supply management
Archives, Global Logistics, Global Trade Daily, Warehousing

Six Steps to Writing a Reliable Supply Management Plan

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Whether you operate in the eCommerce industry, shipping, or physical retail with your own warehousing, a supply management plan is a must. Procuring goods and raw materials for further refinement, production, and overall monetization in an organized manner is a necessity of modern global industries.

According to Jigsaw Business Group, over one-third of businesses don’t have a clear image of how their suppliers and supply management is performing. Additionally, 37 percent of firms perform no practices for supply risk management, with only 8 percent performing above-average in these conditions. This showcases a larger issue in the supply management department of many large international businesses that rely on stable procurement without proper precautions and planning.

In worst cases, it can lead to loss of reputation, important clientele, and subsequent bankruptcy as a result of ad hoc management. To avoid that, outlining and implementing a supply management plan of your own is more than welcome going further into 2020. With that, let’s take a look at the specific benefits of having such a reliable plan in place, as well as the steps to get there.

The Advantages of a Supply Management Plan

Let’s briefly discuss the purpose of supply management before we dive into writing a plan centered on its implementation. As the name might suggest, supply management revolves around active tracking, procurement, and management of raw materials, production supplies, or items for handling and shipping. A standardized supply management plan is a welcome addition to any B2B-reliant business as it will effectively streamline your processes of ordering items from suppliers.

While rudimentary requests and correspondence can be achieved with writing tools such as WoWGrade and Evernote, creating a template for easy supply procurement is advised. Having such a document in place and available to your sales and supply departments can lead to highly beneficial outcomes for your business, including:

-Faster, more efficient cooperation with constant supply partners

-Minimized margin for supply procurement errors or mismanagement

-Increased production efficiency, turnaround time and bottom-line ROI

Writing the Supply Management Plan

1. Internal Company Survey

To achieve the most out of your supply management plan writing initiative, you should audit your current supply pipeline carefully. Assess the status of your supply routine, paperwork, existing communication channels, and QA processes before writing a plan outline for future use.

It’s important to take a good look at how things function in your company at the moment to identify bottlenecks and improvement opportunities early on. Additionally, forming a supply management plan task force can also prove useful since it will give several employees a clear goal in writing the document.

2. Assemble your Writing Stack

Writing a supply management plan is not unlike writing any other form of business document. Meaning, it should be done in a planned manner to avoid mistakes, related to both grammar and legalities. To ensure just that, several cloud-based writing platforms are available for your convenience:

Grammarly – platform dedicated to spell-checking, proofreading and error-free writing

Trust My Paper – outsourcing platform with numerous professional editors available for writing assistance

Hemingway – tool designed with readability and sentence construction in mind, useful for supply documents

Grab My Essay – platform which houses numerous editing, rewriting and on-demand writing services

Thesaurus – a vocabulary tool useful for industry-specific terminology required for supply procurement

Studicus – in addition to procurement documents, various types of correspondence can be outsourced here

3. Supply Management Plan Overview

The easiest way to get ahead on your supply management plan writing is to start with the outline and move things forward from there. An outline represents a set of subheadings and categories that will be filled with important procurement information once the order is about to be made.

Given its nature, some of the elements it should contain include storage information, transportation details, special order requirements, personnel information, etc. Use editing and formatting tools such as Supreme Dissertations and Readable to create legible documents for your B2B procurement and correspondence. Make a clear plan of which items are primary to your business to give the supplier enough information on how to proceed with your order.

4. Supply Requirements & Timelines

Once your outline is in place, it’s important to include fields for numeric data in your supply management plan. Information on the number of your orders, types of materials you’ve requested, as well as the optimal delivery timeline field, is essential in the document. These details can be outlined via writing platforms such as Best Essay Education or even Google Docs depending on the complexity of your typical procurements.

In practice, the supply requirements and timeline fields will be the first items your suppliers and B2B partners will scan through to ensure their availability. To further improve the document’s legibility, you can include easy-to-spot contact information in regards to your sales department. This will allow for a faster approval process and further streamline your supply management in light of newly-outlined standardization documents.

5. Detail the QA Standards

Lastly, risk management is a pivotal factor in the supply chain management, one which can make or break your pipeline’s efficacy going forward. The supply management plan you outline and ship to B2B partners must require detailed information on the QA standards of your company.

Shipping items such as hazardous materials, medical equipment, chemical compounds, and other dangerous elements will naturally require careful handling, shipping, and storage of said goods. Be upfront with your suppliers in regard to QA standards. This is especially welcome if you order materials from abroad – your shipments and B2B relations will be that much more stable as a result.

Supply Management Plan Implementation

While supply management trends continue to spiral toward digitalization, written procurement documents are still vital for effective B2B communication and shipping of essential goods. Create an outline that reflects both your service portfolio and internal work ethics using the above-discussed steps as guidelines.

Don’t be afraid to revise and reformat your own supply management plan as much as necessary before settling for a standardized template for company-wide use. Once you get a handle on your procurement writing pipeline, supply chain management of your warehousing and shipping requests will become that much simpler.

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Kristin Savage nourishes, sparks and empowers using the magic of a word. Along with pursuing her degree in Creative Writing, Kristin was gaining experience in the publishing industry, with expertise in marketing strategy for publishers and authors. Now she had found herself as a freelance writer. Kristin runs her own FlyWriting blog.

international supply chain
3pls, Archives, Global Logistics, Global Trade Daily

Ecommerce Expert Explains How to Develop an International Supply Chain

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When selling products, you may need to import them from other countries and have them delivered to a warehouse or home. There are different ways to do this whether by air, train, or by sea. During this process, there are fees and regulations you should be aware of.  I will be explaining how to develop an international supply chain with three key elements: the type of shipping, selecting and booking your freight, and post-delivery supply chain.

Types of Shipping

There are several well-known types of shipping, such as Free Carrier, Free Alongside Ship, Cost and Freight, Cost/Insurance and Freight, Cost Paid To, Carrier and Insurance Paid To, and Delivery at Place, among others. In my experience, I have found three types that are used more than the others: Ex Work, Free on Board, and Delivery Duty Paid.

Ex Work means your goods are at the manufacture’s warehouse and you are responsible for shipping the product to your destination. In this case, you will have to pay for customs, customs bonds, taxes, and any charges that may come up during the process.

Free on Board (FOB) is when your product will be delivered to the port or ship. What does this mean? The manufacturer will get your product on the boat, but you will be in charge of getting it off the ship, through customs, and delivered to you. What I do not like about this type of shipping is that when the manufacturer drops the product off, it is unsupervised, and my insurance does not kick in until the next step. There is an uninsured moment, so I recommend avoiding FOB shipments.

Delivery Duty Paid (DDP) is one I deal with all the time and I also call it Door to Door. The goods are shipped to you and delivered to your warehouse or your house location. Whoever you negotiate with will pay all deliberate duties, and it is a good way to avoid unseen costs.

These three terms are extremely important when negotiating with manufacturers. I usually quote Ex Work or DDP, because, throughout the entire process, there is someone in charge of the shipment.

Select Freight

A freight forwarder is a person or company that deals with the shipment of goods from the manufacturer to a customer, market, or point of distribution. You have traditional ones, like DHL and FedEx, which more commonly do air shipping. DHL is usually the most expensive option, but the fastest large provider and can take two to ten days to deliver. FedEx can take up to two weeks, depending on the shipping type.

You can tell your freight forwarder where to pick up your product and where to deliver them to. The forwarder will handle the rest. They help you in handling customs, bonds, and taxes. There are plenty of companies that do this and can help you with all forms of transportation. I use freight marketplaces, which work like Expedia, giving you options and quotes from several freight forwarding companies. I regularly use Freightos and have had a good experience. Pro-tip: make sure to insure the full shipment, and don’t fudge your invoices.

Domestic Supply Chain

Once you have chosen your type of shipping and selected a freight forwarder, you need to find a place to store and ship your goods. What you will select depends on your business model. Some common solutions are Amazon FBA, delivering it to your warehouse, or use a third-party logistics or fulfillment center (3PL).

The ideal supply chain would be choosing Ex Work, using a freight forwarder, and ensuring shipment the entire way. You will have to pay for the cost of freight, taxes, and tariffs. The quickest route would be shipping to California, and from there, to your 3PL or warehouse. You can put everything in one location and distribute to the rest of the country.

Mastering these three key elements will guarantee the successful shipment of your goods and the success of your commerce. Having a good partner or a 3PL will add value to your business. It is important you do your research before you start importing products.

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Scott Bartnick is a strong professional leader with a degree in industrial and systems engineering, specializing in public relations. Bartnick is a serial entrepreneur, published author, and successful business owner. He has extensive and diverse experience with eCommerce consulting, operational excellence, public relations, sales, and marketing. You can reach Scott at The Five Day Startup.