While companies may see global sourcing as a means to reduce material or component costs, they must be mindful of what the customer is actually willing to pay for through total landed cost. Other challenges in international transportation logistics can include supply chain velocity, variability, visibility, and complexities in documentation and diverse requirements.
Thought leadership and a custom approach to international transportation logistics can help companies overcome these challenges. This results in strategically finding savings opportunities that are often overlooked in the daily struggle to move material from point A to point B.
1. Challenge: Currently managing suppliers' shipments separately instead of looking at all of them as one complete network.
Solution: Shipment Consolidation and Optimization. Consolidating freight volume will increase delivery frequency while reducing costs.
2. Challenge: Shipments are routed based on the freight forwarder's network capability/relationships.
Solution: Global Transportation Optimization. Optimized freight routing and port of entry based on your requirements (as opposed to freight forwarders’ capability) can reduce freight cost, transportation lead time, and total miles traversed.
3. Disparate computer systems between freight forwarders increase the complexity for gathering data for decision making.
Solution: Single Data Repository. By capturing all your shipment data from all your freight forwarders into one system, it provides one common set of data for reporting, analyzing, and shipment visibility. Now you have the advantage to clearly understand your complete network performance and cost per unit structure across your global network and all service providers. Additionally, the single data repository provides for complete visibility of your network. This enables quick decision making to exceptions in your transportation logistics network.
4. Challenge: Lack of resources to manage frequent RFQ's and ranking analysis.
Solution: Global Transportation RFQ Analysis. A third party logistics provider will have the expertise and tools to manage complex RFQ’s and provide the best freight forwarder based on routing/service and rates. A key point to remember is that a third party provider is carrier-neutral, and can implement solutions and manage multiple service providers via the best solution for the customer.
5. Challenge: Premium freight transportation costs high and lacks control and reporting.
Solution: Premium Freight Authorization Program With Root Cause and Corrective Actions. By implementing a PFAP, you can control excessive freight costs and provide root cause analysis to facilitate corrective actions within your international transportation logistics.
6. Challenge: Freight rates in excess of market conditions.
Solution: Market Competitive Rates. At LeanCor, our process is to competitively manage multiple freight forwarders on your behalf. Through QBR’s, Ad Hoc quoting and RFQ’s, we are able to keep rates competitive with changing market conditions.
Lean Principles in International Transportation Logistics
One of the major principles of lean supply chain thinking is the level flow of material. If you look at many global supply chain networks, there’s a pattern with implementing a limited number of transportation routing solutions. This often leads to batching shipments with multiple ocean containers on a single vessel, unloading at the same port, and batching the delivery to the final destination. By applying the lean concept of level flow, the solution is to engage multiple service providers with various routing options. By utilizing different ports in the routing (such as the US East and West Coast ports), the flow of material is less batched and more leveled from origin to final destination. This strategy can be applied to any trade lane or regional network.
Posted by LeanCor Supply Chain Group
LeanCor Supply Chain Group is a trusted supply chain partner that specializes in lean principles to deliver operational improvement. LeanCor’s three integrated divisions – LeanCor Training and Education, LeanCor Consulting, and LeanCor Logistics – help organizations eliminate waste, drive down costs, and build a culture of continuous improvement.Facebook LinkedIn Twitter Google+