Supply chain disruptions are not unusual, and increasingly we’re seeing how supply chain disruption cost impacts the larger global economy.
Just as import and truckload volumes seemed to level off, the Russian invasion of Ukraine created more turmoil – disrupting major trade lanes out of Asia and Europe and causing fuel costs to increase worldwide. These rising supply chain costs invariably trickled down to costs of consumer goods, contributing to the highest inflation rates seen in decades.
In 2022, supply chain disruptions cost global businesses an average of $184 million and an average of $228 million. With that in mind, controlling procurement and transportation budgets is more important than ever. While disruptions are inevitable, proactive planning can minimize negative impacts on the supply chain. Below are three tips that can help logistics teams manage supply chain disruptions.
3 Tips for Managing Supply Chain Disruption Cost
1. Choose an Interoperable, API-Rich TMS
An interoperable transportation management system (TMS) allows integration and communication between existing systems, connecting previously disparate data sources into a single logistics control tower. This means order management systems (OMS), enterprise resource planning (ERP), and warehouse management systems (WMS) connect seamlessly under a singular TMS, providing the ability to improve multimodal optimization and streamline shipping processes.
A TMS solution should have API capabilities to connect directly with digital freight networks to automate tendering, booking, and shipment management. Digital freight networks exponentially expand your carrier base and remove manual processes for obtaining rates, securing capacity, and tracking freight. This means supply chain teams spend less time on tedious logistics tasks, and more time on long-term strategies and customer-focused functions.
2. Prioritize Data & Analytics Processes
Establishing processes for data management and stewardship is a critical step in maintaining clean data for accurate, useful insights to drive intelligent decision-making. Good data stewardship has additional benefits to operational effectiveness, efficiency gains, and scalability for long-term business growth.
3. Increase Supply Chain Resiliency
- Visibility: Lapses in visibility have devastating impacts on the supply chain, particularly when disruption has already created setbacks and delays. Knowing exactly where freight is and when it will arrive is critical for proactive supply chain planning. Real-time visibility allows logistics teams to mitigate issues resulting from delays, reduce detention and demurrage fees, and eliminate empty miles in backhauls. Improving shipment visibility throughout the supply chain network streamlines workflows and ensures all parties are kept in the loop.
- Predictability: Understanding how disruption could impact the supply chain is pivotal in managing costs when disaster strikes. Freight planning programs can be used to model “what-if” scenarios and help teams navigate evolving, tumultuous markets. Additionally, freight rate pricing indices and multimodal route optimization tools gives logistics teams the ability to match freight to the modes and carriers that keep budgets in line despite the circumstances.
- Agility: Having the ability to pivot in times of disruption is critical for today’s supply chain. Diversifying modes, suppliers, and carrier networks gives teams more options when confronted with delays. This means they can proactively manage exceptions across the network in real-time, instead of reacting after an issue threatens inventory or the ability to fill customer orders.
Manage Supply Chain Disruption Cost with MercuryGate TMS
Harnessing the power of a dynamic TMS gives logistics teams the tools they need to navigate disruption and manage supply chain disruption cost with ease. MercuryGate delivers a customizable, interoperable TMS control tower – linking the systems and data necessary for full visibility on the journey to an optimized, resilient supply chain.
MercuryGate automates the multimodal digital freight network, ensuring freight is shipped via the right mode, at the right price – every time. From tendering to shipment tracking, MercuryGate simplifies each step of the logistics process to ensure seamless, cost-effective deliveries, without the manual labor. Ready to learn more about the benefits of a digital freight network? Download the eBook now.