Supply chain management has always been an arduous, process-heavy undertaking. But ongoing digital transformation offers the opportunity to improve supply chain processes beyond simply management to a disciplined department that attains improved sustainability, traceability, and service levels in 2020 and beyond. Unfortunately, transportation management challenges continue to exist. These challenges are inherent within the global economy and the growth of e-commerce. To stay competitive, supply chain leaders need to understand the causes of such problems, the problems themselves, and a few tips for overcoming them.
What’s Causing Problems With Modern Transportation Management?
As explained by Supply Chain Digital, significant issues will come to a head in supply chains throughout 2020. Unfortunately, the logistics industry is incapable of achieving global targets for sustainability and digital transformation on its own. In other words, the logistics industry needs an infusion of technology and advanced management capabilities to attain success in its key endeavors. In fact, consider these top reasons problems are beginning to come to fruition within the supply chain:
- Globalization. The ongoing globalization of the supply chain is changing how local companies interact. Contractual terms must be laid out in the context of cultural similarities and differences, and everyone is looking for the latest way to improve visibility within the supply chain.
- Changing customer expectations. Customer expectations are also changing throughout 2020. As major e-commerce retailers offer faster, less impactful shipping, customer demands for faster shipping and a reduced carbon footprint from prioritized retailers will grow.
- Market dynamics, including carrier’s markets for ocean shipping and a shipper’s market for OTR modes. The changing market dynamics reflect another problem with modern transportation management. Carriers possess the power in the ocean shipping market, but shippers possess the power in the over the road (OTR) modes. Those trends will continue to force the industry to adapt in the coming year.
- Multimodal shipping. Multimodal shipping continues to add to the complexity of global e-commerce and shipping as more industries mirror retail by going omnichannel.
- The system alphabet soup continues to increase complexity. Shippers are approaching a state of supply chain system whiplash, incapable of leveraging a unified platform of services due to the wide variety of systems in place.
- Omnichannel experience expectations. Adding final insult to injury, demands for omnichannel experiences from customers through business-to-business partners will complicate matters.
What Are the Actual Transportation Management Challenges of 2020?
- Poor optimization of processes and resources.
- Limited planning of activities from the first mile through the final mile.
- Low visibility of inventory, logistics, annual spending, and more.
- Cumbersome freight claims’ processes.
- Higher rates of returns on e-commerce and peak shipping season purchases.
- Globalization of the supply chain and the risk of non-supply chain disruptors, like coronavirus.
How a Transportation Management Platform Solves These Challenges
- Self-optimizing systems will reduce strain, leveraging AI along the way, which will begin to make its foray into rail and all modes throughout 2020, says Supply Chain Dive.
- Increased data use will enable proactive management in the warehouse and beyond.
- More sensors will feed data into the TMS.
- Faster, smarter systems automate freight claims management.
- Predictive ordering and e-commerce platforms will ensure customers are happy with their orders.
- Diverse networks will reduce health-related disruptions.