Guest Commentary: Challenges with Global Logistics Workflows

Global supply chain networks have become more complex over the past several years, increasing the hunger for end-to-end visibility and supporting data at both the order detail and shipment level. The force behind this has been the desire to calculate precise inventory arrival dates and times to coincide with special promotions, replenish store inventory, and keep DC safety stock to a minimum, while ultimately increasing customer satisfaction and profit margins.

In an effort to become more agile and maintain a competitive advantage, companies are changing from regional suppliers to ones located in many different countries of origin. This can improve product quality and control cost increases. With each product being sourced from many different regions of the world, there may be different processes and players to manage the flow. The processes can be multiplied by a half dozen freight forwarders, ten thousand suppliers and four-hundred carriers.

When the supplier is located in the same region as the buyer, the logistics department can easily track a two-day truckload shipment travelling 900 miles on a reliable common carrier or private fleet backhaul asset. When that supplier is replaced with a manufacturer on another continent, the process workflow adds a dozen new steps that each requires a more sophisticated approach. When a buyer changes suppliers, there may now be a 200-day manufacturing lead time estimate, reduced communication, lack of data sharing, different technology utilization, and a less sophisticated infrastructure, which makes tracking shipment status more difficult.

These new global workflows may include a combination of agents, international freight forwarders, 3PLs, and brokers that all work with a client’s internal staff to help transport the goods from the supplier to the end customer. Each of these participants has their own independent system where they track the flow of goods for their clients as they move around the globe.

Every supplier workflow can have a dozen different processes starting when the supplier receives the forecast or the EDI 850 purchase order in some format. The supplier commits to either all or part of the PO or blanket PO with an estimated manufacturing date and estimated ship date. Once the goods have a confirmed sailing schedule, they are loaded, the cartage carrier moves the container with the goods to the origin port and the ocean liner departs for the destination port. Customs brokers get involved, followed by port drayage, rail transport, drayage to cross-dock, cross-dock to DC network, proof of delivery is signed, vendor compliance, cost allocation, and freight payment processes may take place.

It is very difficult to calculate the exact time of arrival for each incremental process in the new workflow without constant communication or a common technology platform. Imagine how well an annual promotion can go when the shelves are empty and the product has not arrived at the port. Imagine how, with no advanced notice, the distribution center teams react when ten ocean containers arrive four weeks late on a Friday evening and they need to be cross-docked to help with the promotion. Unfortunately, this still happens every day for many companies. Many of their trading partners are smaller and cannot afford sophisticated technologies with high ongoing support costs.

Cloud-based technology must be architected to support multiple flavors of both domestic and international workflows to fill all of these current gaps that even the top 25 supply chains experience with older systems. The technology must also take all of the unique rating complexities of each region and construct the user experience to facilitate 100 percent participation by all trading partners. As each partner updates the system automatically as each process is completed, the ETA is much more accurate, which allows the company to reduce safety stock. With all of the trading partners onboard, social and mobile technology can be utilized in a many-to-many stream. This provides the partner closest to the shipment the ability to provide updates to a buyer, instead of trying to call the 35 people around the globe to check on a status. Technology empowers the company to create their private one-to-many network but also allows their trading partners and carriers to have a single sign-on and connect in a many-to-many network as well. Updates can be made via a web browser, EDI, or a smartphone to place the smallest suppliers and single-truck carriers on equal ground to improve the experience and efficiency for all.

Mark Nix serves as Cloud Logistics‘ chief executive officer and a member of the Board of Directors. Mr. Nix has 28 years of supply chain software experience in helping clients of every size address their global needs. Mr. Nix serves as a Partner with Nix Venture Partners, is on the Board of Directors with the One Step Closer Foundation, and advises various charities. Mr. Nix served as VP of Major Account Sales at Manhattan Associates, an EVP with One Network Enterprises, and worked with IBM’s Nistevo division, Metasys, and the TranScape/Vocam/PBTS divisions of PBI. He holds a Bachelor of Science degree from The University of Tennessee.