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Sustaining a Strong Supply Chain in 2023 and Beyond

By Doug Ladden, co-founder & CEO, Deliveright

It's been a tough year (or three) for the logistics industry. Rising costs, shortages of labor and capacity, and growing consumer demand have increased the urgency for strategic supply chain and logistics planning. Supply chain management has moved from behind the scenes to the boardroom, now playing a foundational role in the success of businesses.

Yet, delivery companies are struggling to stay on track due to manual planning and legacy processes that persist despite the availability of and obvious need for sounder operations. The good news is that 67% of CEOs plan to increase investments in innovation processes impacting supply chains. While technology is the primary vehicle for reducing costs, decreasing errors, and gaining a competitive edge, decision-makers must apply the right solutions to solve the problems that are unique to their organization.

Be Basic: Integrating an Automated DMS

Companies with intelligent visibility-a blend of structural and dynamic visibility supported by analytical processes and artificial intelligence (AI)-tend to be more resilient, according to Accenture's The Benefits of Supply Chain Visibility report. These companies are better equipped to manage ongoing disruptions and boost performance. While tracking deliveries and eliminating errors seem basic, these practices are still not widely adopted and available for heavy goods. Companies still struggling with where to start must resolve to embrace a delivery management system (DMS) in 2023.

Technology-based DMSs (TDMS) will prove a game-changer for carriers by optimizing day-to-day operations. Without it, there's no way to manage freight, track ETAs, access electronic documentation, or oversee deliveries. According to a PwC study of business leaders in supply chain-intensive sectors, increasing efficiency (63%) and managing or reducing costs in supply chain operations (59%) are top priorities over the next 12 to 18 months. Beyond providing companies with an operational advantage, TDMS also eliminates the guesswork for delivery people, saving them time to focus on achieving those five-star reviews. Efficiency improves the consumer experience and experience is a top priority.

While route optimization is table stakes in today's market, route profitability and order-level profitability mean the carrier can understand costs and not just revenue- driving the bottom line. Companies can use AI to create lower-cost routes by combining various carrier combinations between origin and destination. Route optimization is an excellent example of how supply chain technology supports business needs and paves the way toward efficiency beyond service-level agreement expectations. Using AI, an effective DMS generates and optimizes routes based on the volume of deliveries in a given region, account profile, service level, and other customizable filters. AI facilitates course changes in real-time and helps avoid pitfalls like heavy traffic or accidents on the road (for starters). It may identify an opportunity to increase efficiency by alerting a driver of an unplanned pickup or delivery nearby. As it does this work, it should also collect and analyze data to generate qualitative and statistical insight into performance. Automating delivery management processes takes care of the previously manual and time-consuming task of digging into data to identify trouble spots. Providing businesses with a granular understanding of their internal and external operations supports growth while saving time and money.

Overcoming the Capacity Crisis: B2B LTL Services

As e-commerce grows, companies are increasingly shipping smaller, "less than truckload" (LTL) quantities, adding further pressure to the supply chain and the need for more efficient processes. Managed LTL services provide the solution without penalizing those companies shipping lower volumes. (See above for how a TDMS supports LTL.)

Still, LTL shipments require the same seamless visibility as any delivery. Providers offering LTL services are scarce in this $50B+ industry. They are traditionally positioned as an add-on, creating a level of uncertainty that can be tough to reconcile in a sector that demands careful planning, flexibility, and predictability. LTL shipping calls for air-tight coordination as multiple stops, carriers, and breakbulk (intermediate) locations may be involved, making transparency difficult to achieve, especially without proper resources.

LTL shipping also includes significant increases in base rates, ongoing capacity issues, and high diesel prices. Brands shipping smaller volumes benefit from relationships with LTL carriers to help avoid roadblocks. According to Logistics Management's First Annual LTL Study, 58% of respondents said they had taken steps to partner with LTL carriers for better pricing, more visibility, smoother scheduling, and more success securing capacity. This 58% appreciate access to reliable solutions when problems arise, better pickup times, communications, and an understanding of shippers' needs.

Turning the Page

LTL services require the same AI-powered technology used by full truckload (FTL) deliveries. AI enables strategic capacity planning allowing the carriers to maximize space inside vehicles.

Meeting customers' expectations means there's no room for errors, delays, damages, or the dozens of other problems that impact deliveries and, consequently, that five-star rating. Companies are feeling the effects of the evolving market and understand that supply chain logistics and transportation management are critical value differentiators proven by increasing investments to ensure performance. Automating processes with a TDMS and successfully executing LTL services are just two vital processes that separate the good from the great. The roadmap to success is all but mapped out thanks to the availability of logistics tech; now it's a question of adoption and relentless execution.

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ABOUT THE AUTHOR

Doug Ladden is the CEO and co-founder of Deliveright Logistics, Inc. a technology, logistics, and final-mile delivery provider for heavy goods carriers. Previously, Doug was a co-founder and senior partner at DLJ Investment Partners which managed a series of middle-market mezzanine funds with $3.5 billion in assets under management. Doug has worked with management teams and as an investor and board member in industries including technology, transportation, healthcare, and more.