Visibility Enables Cost-Reductions
Visibility helps shippers realize reduced costs in freight spend. More visibility into all operations also allows shippers and logistics service providers to intervene proactively when problems arise. Visibility, as an extension of data collection and analysis, helps shippers and logistics service providers understand what has happened, what may happen, and what needs to happen to achieve the desired result. Further, organizations around the globe are starting to embrace newer, lean fulfillment strategies, and visibility lies at the cornerstone of these strategies.
For instance, visibility is a prerequisite of continuous replenishment, also known as just-in-time fulfillment, and to some degree, all lean fulfillment strategies. Essentially, any process that requires a continuous stream of inbound logistics to meet base demand is a continuous replenishment program. Why is that important, though?
Continuous replenishment has the key benefit of lower logistics costs. As reported by Industry Week,
“APQC’s data shows that organizations with continuous replenishment programs for customers to spend less on logistics (Figure 1). At the median, organizations that have implemented these programs spend $19.95 less per $1,000 in revenue to manage logistics and warehousing functions than organizations without these programs. For an organization with $5 billion in revenue annually, this would mean a $99.8 million savings in logistics spending when using a continuous replenishment program.”