Freight visibility is a hot topic these days. Companies are under greater pressure to know where their freight is at all time. As customer expectations for fast and low-cost shipping continue to rise, globalization is increasing, and we see ongoing fluctuations in freight capacity it’s more important than ever for companies to know where shipments are at every stage. But what does visibility really mean when it comes to a successful transportation strategy? And, how does visibility into freight shipments impact customer service?
According to a Geodis 2017 Supply Chain Worldwide Survey, just 6 percent of companies believe they have achieved full supply chain visibility. And 77 percent of companies say they have either no visibility or a restricted view. For many companies, visibility is the primary obstacle to cutting supply chain costs. In transportation, a lack of visibility can create inefficiencies that impact upstream and downstream activities, which result in unnecessary costs in the form of detention charges, higher carrier rates, and more.
In today’s modern supply chain, visibility at its simplest level is about knowing where your shipments are, when they are going to arrive, and being able to identify potential risks or delays in that projected arrival time. The expectations around visibility have evolved past simple track and trace capabilities. True visibility is about gaining deep insights into your data and leveraging that data to be proactive rather than reactive.
Ultimately, inefficiencies and higher costs related to your transportation network also have an impact on the level of service a company provides to customers. Companies are increasingly recognizing that freight visibility and higher levels of customer service go hand in hand. With limited visibility into freight movements companies not only risk penalties and fines for missing shipping windows, but the long-term effects can be much more far-reaching in the form of lost and decreased sales.
Visibility delivers more than reduced freight costs
In the not-so-distant past, it was common for many companies to use spreadsheets, phone calls, and emails in an attempt to create visibility. Shippers require visibility of their freight down to the SKU or purchase order level. That level of detail isn’t possible using spreadsheets or even most homegrown technology. Technology is critical to raising service levels by connecting different parts of the organization and ensuring information is shared.
Not surprisingly, many organizations have increasingly turned to a Transportation Management System (TMS) to more effectively manage their transportation network. And they’re seeing positive results in reducing costs. In a recent survey conducted by ARC Advisory Group, 34 percent of respondents in that survey achieved freight savings of more than 12 percent of their total spend.
Every company is trying to balance efficiency with customer satisfaction. The question is: does it have to be a choice? While reducing freight costs is typically the primary reason a company decides to implement a TMS, the impact that a TMS has on customer service improvements has become another strong driver behind many implementations. With customer demands increasing steadily, companies are tasked with achieving the perfect order. This means delivering the correct product in the right quantity, with no damage, while also getting it there on time for a low cost or free. Achieving that level of perfect service is difficult – if not impossible – without a high level of freight visibility. If a company loses sight of freight during any stage of the shipment process, there’s a greater risk that something will go wrong – which translates to an unhappy or even lost customer.
Real-time visibility: it’s all about the data
At the heart of achieving real-time visibility is data. The constant flow of data from multiple, connected systems ultimately provides clear visibility into the status of active shipments. The ability to see real-time data for freight movements enable transportation managers to stay a step ahead of any potential issues. For example, real-time visibility could allow a company to see any loads that are running behind schedule and then make a proactive decision to do something about it. What’s more, even if nothing can be done to catch the load up, having access to this information allows a company to notify the customer about a new estimated arrival time.
Using a TMS to have a clear view and measure carrier performance can also have a positive impact on service. Many retailers, for example, are relying on carriers to deliver products to distribution centers for delivery to stores or for online shipments. By having an automated and complete view of carrier performance and rates, companies can be confident they are selecting the best carrier that will ensure on-time delivery as often as possible.
The reality of today’s business environment is that there are few second chances. And, it is not ok to meet some of the requirements some of the time – today’s consumer expects While technology cannot guarantee perfect deliveries every time, it gives companies a clear competitive advantage in providing better visibility. This deeper level of visibility is key in empowering companies to make strategic transportation decisions that will have the most positive impact on their customer service levels.
Karen Sage is MercuryGate’s Chief Marketing Officer (CMO) responsible for the company’s global marketing, communications, sales enablement, and go-to-market efforts. She is a veteran with 20+ years of experience in business-to-business marketing and communications helping several industry leaders launch disruptive new categories, accelerate revenue growth, build leadership brands, and establish marketing organizations that scale globally. She comes to MercuryGate most recently from spend management solution provider, SciQuest. Prior to SciQuest, she was at CA Technologies where she served as vice president of marketing leading rapid growth initiatives. Her experiences leading growth also include multiple leadership roles during a 15-year stint at Cisco. Karen started her career having invented the NETSYS Performance tools at NETSYS Technologies, Inc., which was acquired by Cisco in 1996.