Transportation and logistics play a critical role in the success of any business that requires the movement of goods, whether raw materials or finished products.
One of the biggest challenges companies face is managing their transportation management system (TMS) for end-to-end coordination, ensuring visibility, and theft control.
During a recent conversation with the founder of a company, it was revealed that the organization, which manages a daily volume of 1500 trucks across 18-20 loading points, was encountering difficulties in achieving its objectives. Specifically, the company required a GPS-tracking system to monitor its operations in real-time and guarantee the safe and secure delivery of valuable goods.
The rising costs of logistics operations and mounting performance issues have made it necessary for businesses to streamline their logistics operations.
In this article, we discuss the advantages of streamlining logistics operations and provide businesses with solutions to help them streamline their logistics operations.
Logistics operations have come a long way from the manual paper-based processes of yesteryears. Today, most logistics operations are handled using Enterprise Resource Planning (ERP) software, follow-ups, Excel sheets, and integrations with other software.
However, even with these advancements, logistics teams still face significant challenges. Some common problems logistics teams face include follow-ups, error-prone Excel sheets, and tedious/redundant tasks of reporting and communication.
Various studies report that nearly 9 out of 10 spreadsheets (88%) contain errors. This can lead to incorrect data and missed opportunities. Furthermore, logistics teams also face issues in compliance, adherence to dispatch plans, freight theft, accidents, late deliveries, and unsatisfied customers.
In a staggering revelation, around 91% of surveyed logistics and supply chain companies agreed that they had paid fines and penalties in the last 12-month period.
Companies that prioritize transparency and automation have seen a reduction of up to 75% in follow-up tasks and up to 90% in issues such as theft. These statistics demonstrate the urgency for logistics teams to embrace modern solutions and address the current state of logistics operations.
While streamlining logistics operations is crucial for businesses, it comes with its own set of challenges. In this section we will take a look at three major challenges faced by the logistics teams and ways to overcome them.
A major challenge is ensuring smooth order allocation, higher vehicle placements, and faster dispatches, without the hassle of emails and calls and integrating into ERP.
This requires reducing vehicle allotment time, maintaining a high indent-to-placement ratio, ensuring transparent communication among all stakeholders without follow-ups, multi-channel engagement for all stakeholders, real-time and effective ETA tracking, and proactive issue resolution.
To address these challenges, logistics teams need to ensure complete compliance with proactive issue resolution. A proactive approach to supply chain risk management can help mitigate threats, ensure business continuity, and prevent the organization from being blindsided by unforeseen crisis events.
Logistics teams also face issues with gaps in reporting and delayed communication, resulting in delays from Excel-based Management Information Systems (MIS).
While Microsoft Excel is still the application of choice for transportation in supply chain management at many companies, it may not be the best option for logistics and supply chain optimization planning.
Using Excel for logistics management can lead to errors in forecasting, purchasing management, and logistics functions. This can result in slow and inaccurate billing, affecting the overall efficiency of the logistics operations.
Addressing these challenges requires implementing modern logistics management systems that streamline communication and automate processes to reduce errors and ensure timely delivery.
Streamlining end-to-end team operations is crucial for efficient logistics management. This involves defining macro and micro tasks in the workflow, centralizing all teams on one platform, and assigning service level agreements (SLAs) to each team member for each task.
Assigning SLAs ensures that each team member is held accountable for their assigned tasks and helps achieve set goals. Checklists are also distributed to increase the efficiency of operations and ensure all tasks are completed.
Centralizing all teams on one platform enables better communication and coordination between teams, leading to a more streamlined and optimized logistics operation.
By centralizing all transporter-related information onto a single platform, businesses can easily track and manage their transportation partners. This includes their SLAs and contract details, such as pricing, payment terms, and service level expectations.
With all this information in one place, businesses can quickly identify any issues or discrepancies and proactively address them to avoid any disruptions in the supply chain.
Furthermore, a centralized Transporter Portal enables businesses to streamline communication and collaboration with their transporters, leading to greater transparency and efficiency in logistics operations.
To streamline shipment tracking, you must have multiple options available for tracking. This includes SIM-based, GPS-based, smartphone-based, and Fastag-based tracking.
Each method has its own benefits and can help provide greater visibility into shipment movements.
SIM-based tracking can provide reliable tracking in areas where GPS signals are weak, while GPS-based tracking provides accurate location information.
Smartphone-based tracking allows real-time updates on shipment location and status, and Fastag-based tracking enables automated toll payment and tracking.
By using a combination of these tracking methods, businesses can ensure they have the most comprehensive view of their shipments and can proactively address any issues that may arise.
Transparent real-time communication is critical for effective logistics operations management. Businesses can achieve this by onboarding all customers to a customer portal and accessing real-time shipment tracking information.
Additionally, providing shareable live shipment location links for customers, sales, and plant/warehouse teams can help keep everyone informed and updated.
Sending regular updates on shipment milestones through Whatsapp, text, or email can also improve communication and increase transparency. By implementing these measures, businesses can improve customer satisfaction and ensure smooth logistics operations.
Simplifying load planning is a crucial step in streamlining logistics operations. Businesses can achieve this by centralizing all SKUs/material types and Carrier vehicle types on a single platform.
Pro Tip: Use a 3D load visualizer tool to create effective loading plans across different SKUs/Materials to save time and effort.
Furthermore, ensuring efficient loading need proper communication of load plans to plant/warehouse loading teams as part of their SLAs. This allows teams to prioritize loading and ensures that shipments are dispatched on time.
Centralizing all orders, dispatches, and shipments on one platform enables supply chain leaders to gain better visibility and control over their operations.
Utilizing AI-based route optimization tools can help find optimal routes based on city entry and exit timings, reducing transportation costs and delivery times.
Communicating route plans to transporters and carriers ensures that they are aware of the expected delivery timelines and can plan accordingly.
Finally, focusing on improving communication through email, WhatsApp, or portal notifications can help pace up the entire process and ensure that all stakeholders are aware of the latest updates.
It’s important to centralize all shipment and transit-related documents, such as transporter SLAs and e-way bills, in one place for easy access and reference.
In-plant operation compliances, safety regulations, and driving compliances should also be centralized.
Integrating all these compliances and documents into team dashboards and transporter portals can ensure that everyone involved in the logistics process is aware of and adhering to the required compliances.
This can help prevent any compliance-related issues, resulting in smoother and more efficient logistics operations.
To streamline freight billing, a transporter portal should be established for uploading bills as soon as they receive electronic proof of delivery (e-POD).
This should be followed by the auto reconciliation of shipment amounts based on the contract pricing and terms.
To proactively resolve issues related to shipments, orders, and bills, a Control Tower should be built to track and measure all daily tasks across teams on a single dashboard.
Advanced rule-based alerts can be integrated to notify stakeholders of compliance, safety, or SLA breaches by internal teams or transporters.
By implementing these measures, freight billing can be simplified, and issues can be resolved promptly and effeciently.
Streamlining logistics operations is crucial for businesses to stay competitive and meet customers’ ever-increasing demands. The logistics industry constantly evolves, and transportation management systems (TMS) have become essential tools for supply chain leaders.
TMS helps businesses manage transportation more efficiently, reduce costs, improve visibility, and enhance customer experience.
According to Gartner, the TMS market is expected to grow by 60% over the next five years, further emphasizing its importance in logistics.
At Fretron, we provide end-to-end TMS solutions that can help streamline logistics operations for businesses. Schedule a call with us to learn more about our services and how we can help you achieve greater efficiency, transparency, and proactive issue resolution in your logistics operations