Addressing Root Causes of Logistics Bottlenecks

“Where did these D&D charges come from? My team doesn’t have the budget for this.”

“My goods are stuck in customs control, and now I face heavy contractual penalties because we couldn’t hold up on the agreed deadlines."

“I have no idea where my goods are or when they’ll arrive. Last week a container showed up without warning, and there was nobody at the warehouse to unload.”

“Communication with my suppliers is spotty at best. I leave voicemails, then wait to get a status update. Meanwhile, I’m busy putting out the fires that start because I can’t tell people what’s going on.”

“Sales, marketing, customer service, everybody comes to me for milestones, and I just don’t have them. Delivery times are so variable these days, and we’re losing customers because we can’t tell them where their goods are or when they’ll see them.”

“Paperwork is a constant headache. I work off a shared spreadsheet that doesn’t track changes, so I have no way of knowing if it’s been updated recently, who did it and where they got the info. Every week, I lose a full day to chase the paper trail.”

Areas you do not expect

Areas that aren’t your priority

Areas where you have no visibility or insights

1) Lack of End-To-End Supply Chain Visibility

The data silos created by each stakeholder in a supply chain using their own spreadsheets and emails to communicate mean that there’s no way to get an overall picture of the status of an order. Suppliers might not send word of a shipment being ready until after it’s left the factory, or you may be told the vessel is set to depart today but don’t get notified that it was actually held up three days.

2) Lack of Internal Processes

Internal processes are easy when everything works as it should, but as soon as things get complex, you need to be able to make quick decisions that influence your routing and pricing decisions. Having well-documented and detailed processes helps you avoid these pitfalls and provides accountability in cases where something goes wrong.

3) Lack of Centralised Communication and Documentation

We see as many as 25%* of customer shipments impacted by late or missing paperwork. Late or incorrect submission of documents such as the Commercial Invoice or Packing List will block customs clearances and, with that, the final delivery to your or your client’s warehouse. By tracking communication and documentation from supplier to customer, you’re better positioned to work together to find ways to improve these processes.

4) Lack of Shipment Data

Underlying the above three points is a general lack of data about each link in your supply chain. Data is what powers accurate forecasts, enables real-time updates to customers, and allows for fast decision making on rerouting and mode adjustments.

Inaccurate Forecasts

Inaccurate forecasts can lead to stockouts and disappointed buyers who may leave you for a competitor.

Disorganised Internal Processes

Disorganised internal processes can lead to disordered decision making and additional delays in rerouting and price adjustments.

Missed Paperwork Deadlines

Missed paperwork deadlines due to an unseen email can lead to shipments sitting in port, idle warehouses, and cost excess.

Chaotic Arrival Times

Not knowing what is in each container, let alone when it will arrive, increases the chance of a stockout.

Centralised Communication Across All Stakeholders

With a single platform housing all of your logistics communication and documentation, your warehouse staff can find out about supply delays and make proactive decisions, and your sales team can know what is and isn’t available to sell to your customers. Your suppliers will get automated push notifications to assure timely upload of documentation and you are able to track all data around delays caused by documentation issues.

Assess Internal Data Structure

Equip yourself with the right set of data that will allow you to respond fast to potential roadblocks. Inventory levels, supplier availability, sales volumes, warehouse space, all of these are important to collect so you have a complete picture of the state of your supply chain. Having this data available on a Purchase Order and SKU level will help you to make the right prioritization decisions. Rapid response will prevent a lot of hiccups from becoming real bottlenecks.

Internal Decisions

Enable your teams to make internal decisions with the most accurate real-time information on routing and pricing by having analytics in place on your complete supply chain setup. Enables you to make decisions based on data like latest rates, latest departure dates and estimated arrivals will help you make rerouting decisions if required. Giving the right people access/ permissions to the correct information at the right time keeps your internal processes running smoothly and your customers in the know.

Scenario Planning and Forecasting

With complete historical data you can make a time series analysis by adding the expected trend (projected sales volumes) and seasonal component to it. We recommend to aggregate the forecast by SKU, time and location, as this will help to reduce variation and will improve the forecast. Another solution is to forecast with a shorter time horizon and to revise it more periodically. Additionally, we recommend assessing the quality of your forecast by checking the accuracy (how close the forecast is to the actual observation) and bias (what is the persistent tendency to over or under predict).

* Flexport Data

** https://www.supplychain247.com/article/building_a_digital_supply_chain_ready_for_the_future

*** Flexport Tech Validate Survey