Logistics Viewpoints

A complete analysis of logistics trends, technologies, and services

Guest Commentary: The Omni-Consumer and the Future of Transportation

Guest Commentary | By •

The rise of the omni-consumer has changed virtually every aspect of the way retailers and manufacturers conduct their businesses. Brick-and-mortar retailers are forced to compete with alternative channels on the basis of price while also keeping their service quality high. Manufacturers are challenged to operate with razor-thin margins while still offering the innovative products and continuous updates dictated by today’s shorter lifecycles.

While the omni-consumer has created new challenges in every part of the supply chain, a special impact is felt in the area of transportation, as consumers have quickly grown accustomed to the “fast and free” home delivery offered by Amazon and other online retailers. Many companies are finding that their traditional transportation networks are simply not built to serve the demands of the new omni-consumer.

In the past decade, a large percentage of retail sales have been transformed — shifting from a model where truckload quantities are delivered to stores on a regular schedule to a model where small packages are delivered to individual homes on a more frequent, less predictable basis. According to a recent article in Financial Times, U.S. home deliveries by UPS — which the publication calls “a rough proxy for e-commerce sales” — doubled between 2000 and 2011. The article predicts that this growth will only accelerate, with the U.S. business-to-consumer package industry growing from $150 billion in 2009 to $250 billion by 2014.

This ongoing transformation requires both brick-and-mortar retailers and their manufacturer partners to rethink their traditional transportation strategies. However, any new approaches to delivering products to consumers must combine high service levels with the low prices that enable competition with online giants like Amazon. Only this combination of price and service will allow retailers and their manufacturer partners to win both the short-term sale and longer-term customer loyalty.

Taking a Partnership Approach
Moving forward, one of the key strategies for retailers and manufacturers will be increasing their level of collaboration and information sharing. While demand from online channels might seem volatile and unpredictable, in fact advanced technology solutions can help analyze this demand at a high level — and identify patterns that retailers and their suppliers can respond to more proactively. Based on the specific demand trends that are identified, retailers and manufacturers can partner to devise new ways of delivering products to the ultimate consumer.

For example, it might make strategic sense for manufacturers to take a larger role in shipping their products directly to consumers in small packages instead of sending truckloads to a regional retail distribution center — and then placing the onus on retailers to deliver products across all their channels, including in-store and at-home deliveries. Working in partnership with retailers, manufacturers can also study demand trends at a granular level to ensure that their in-stock levels at every store and distribution center match local demand trends, minimizing the need for expedited deliveries that erode profitability.

Increasing Speed and Agility
Both manufacturers and retailers also need to increase their overall supply chain flexibility and responsiveness to meet the increasingly impatient and fickle demands of consumers. In terms of transportation, this means relying on more flexible schemes and multiple modes that might include private fleets, third-party truckload carriers and parcel carriers.

By allowing retailers and manufacturers to combine a broad perspective on their transportation options with a granular view of true demand, advanced technology solutions can significantly increase delivery flexibility.

A holistic transportation management system allows retailers and manufacturers to gather facts about current and future orders, and then make the best possible judgment that combines low price with high service. As business conditions change, this process is iterated to ensure that shippers are always making the right choice for the current environment.

At one time, retailers and manufacturers could rely on simple, unchanging business rules — such as always shipping in truckload quantities to a centralized distribution center. But the rise of the demanding omni-consumer has changed all that. Today, transportation strategies need to be flexible and continuously updated to reflect demand fluctuations, changing shipping rates, growing fuel costs and other factors.

Driving Innovation
Perhaps the most critical imperative for both retailers and manufacturers is to focus on true innovation as they rethink the most basic tenets of how they deliver their products to consumers around the world. Financial Times reports that, in today’s economy, the “last mile” in the supply chain can account for up to 75 percent of overall costs — so this seems a natural area for focus and reinvention.

With today’s delivery addresses spread over a large geographical area, the advent of many small and low-cost packages, and the frequent need to repeat deliveries when consumers are not home, it’s clear that direct-to-home delivery will not remain a profitable option if online shopping continues to grow at its current pace. Manufacturers and retailers simply will not be able to absorb the associated parcel shipping costs, even as their leverage with carriers grows.

For traditional brick-and-mortar retailers with e-commerce websites, minimizing last-mile costs might mean creating temporary local “pop-up” stores where products can be picked up by online shoppers during periods of high seasonal demand. Similarly, these retailers could aggregate online orders at a local store that is selected by consumers as the most convenient location, replacing five or ten home deliveries with a single shipment to a store.

Any strategies aimed at driving innovation over that crucial last mile must combine increased transportation density, and the related cost savings, with the high level of service and convenience that omni-consumers have come to expect. By studying consumers’ real-world needs and behaviors, retailers and manufacturers should be able to arrive at some game-changing delivery innovations over the next several years, perhaps working with parcel carriers like UPS, USPS, DHL and FedEx to collaboratively arrive at the right balance of cost and service.

Seizing Transportation Leadership
While the ongoing growth of the omni-consumer has created a number of significant challenges for both retailers and manufacturers, this trend also presents a promising opportunity for those companies that can quickly seize leadership.

Retailers and manufacturers that can creatively solve today’s complex delivery puzzle will win the mind and heart of the omni-consumer, achieving a significant advantage over those businesses mired in their old ways of managing transportation. As the rate of ordering via alternative channels accelerates, it’s imperative that all of us work to find transportation alternatives that anticipate and answer these next-generation consumer needs.

Fabrizio Brasca is vice president, global logistics, JDA Software. He is responsible for developing innovative transportation and logistics strategies across all industry verticals.

JDA Software Focuses on Time to Value

Cloud/Software-as-a-Service | By •

All too often, when companies buy and implement supply chain software, you hear a similar story: the implementation took longer than planned and the company grossly underinvested in training. Also, the needed software customization made future upgrades costly and time consuming to the point where upgrade cost and effort often rivaled a brand new implementation. Because of this, companies understandably delay upgrades for years, thus foregoing the latest product enhancements. In the meantime, power users leave the company and the value the company can derive from the software diminishes.

JDA Software, a leading provider of supply chain planning, merchandising, and pricing solutions (and an ARC client), appears to recognize these problems. A few weeks ago at its JDA Focus 2012 User Conference, the company announced a cloud strategy to improve time-to-value for its clients and reduce both implementation and support costs. JDA’s intention is to move from “behind-the-firewall” solutions to a cloud-based business model over the next three to five years.

When JDA speaks of cloud solutions, it means a private cloud, or hosted solution, rather than a multitenant cloud solution. JDA’s clients include some of the largest manufacturing, retail, and distribution companies in the world. These companies require extremely-rich functionality, but are also hypersensitive about data security. JDA believes that most of these large companies would not be willing to use a multitenant cloud solution.

It is easy to see how a multitenant cloud solution, like Salesforce.com, could potentially provide faster time-to-value and easier upgrades. After all, the architecture associated with a multitenant cloud solution eliminates the potential for customization, which as we have seen, typically lengthens implementation times and makes upgrades onerous. But how can hosted solutions improve time-to-value?

The key area in which a private cloud solution saves time over a behind-the-firewall solution is in hardware testing and deployment. JDA argues that, with a behind-the-firewall solution, ordering new hardware, receiving it, and testing it to make sure the hardware will scale to handle complex optimization will usually take at least six weeks. The company argues that the private cloud model can take four weeks off this timetable, reducing this to a two-week process. Based on this, JDA believes private cloud deployments will lead to an implementation that is about 10 percent faster overall.

JDA also believes that its costs to maintain private cloud solutions are substantially less than the costs associated with servicing behind-the-firewall solutions. In particular, the maintenance associated with upgrades should be diminished. When customers decide to do an upgrade, regression testing must be performed to determine whether the addition of a new feature or function will break any of the existing functionality the customer is already using. In the hosted model, JDA believes it can perform regression testing quicker and more reliably, leading to fewer service calls following the upgrade.

JDA proposes to share these maintenance service savings. For private cloud deployments, JDA will charge 20 percent of the software license cost for maintenance, rather than the existing 22 percent fee.

Finally, JDA has been providing managed services surrounding planning for several years. Clients can hire JDA professionals to help them forecast demand, tune demand, and inventory solutions to make sure the solutions continue to provide value. JDA’s professionals can also help prepare reports and analysis for sales and operations planning meetings. JDA can provide these services remotely or send planners to customer sites. Following an implementation, these services can be particularly helpful in helping to develop power users and helping companies accelerate time to value. JDA believes private cloud solutions will make it easier for its managed services personnel to add value.

JDA recognizes that some of its customers will never make the move to private cloud solutions. The company’s announced five-year plan to move customers to the cloud is an aspiration, not a requirement. Further, the company is closely examining its business processes in the consulting,  training, implementation, and maintenance areas to better understand how changes in processes can be mirrored with hosting to improve its customers’ return on investment. JDA has already begun to invest in this journey.

As enterprise solutions get richer and richer in functionality, it becomes harder for software vendors to differentiate solely on this basis. Time-to-value can be a differentiator. JDA’s cloud strategy does not solve all the problems associated with implementing and driving value from supply chain solutions. It does not solve, for example, the problem of locating and cleansing master data, which can greatly delay any supply chain implementation. Nor does the cloud strategy fully solve the customization problem. Nevertheless, JDA’s initiative is laudable and can serve to improve the ROI associated with supply chain planning projects.

Guest Commentary: Retailers and Manufacturers Must Rethink their Planning and Fulfillment Strategies

Consumer Packaged Goods (CPG) | By •

This is an interesting time to be a supply chain professional. We are seeing a convergence of revolutionary trends that are causing retailers and their manufacturing suppliers to truly re-think how they approach their planning and fulfillment strategies.

Here are some examples:

Multi-Channel Retailing. Not long ago, a retailer’s transportation focus was on loading trucks and shipping into distribution centers and stores. The recent increase in parcel activity due to direct consumer fulfillment is changing the modal mix for retailers, resulting in a whole new set of transportation challenges. With the influx of online ordering and mixes of fulfillment strategies, retailers must be prepared to accommodate these broadened requirements. Adopting an integrated, holistic approach to transportation processes and systems will help better position retailers to consider added volume as part of their standard supply chain policies. As a result, they will have the ability to allocate their modal strategy more evenly across the network to keep service levels high and meet consumer demand for on-time shipments.

Shelf-Connected Supply Chain. To compete and thrive in a consumer-driven environment, retailers and consumer goods manufacturers must collaborate differently than they have in the past. They must quickly and profitably respond to the choices that consumers make at the shelf and across all buying channels. This has prompted the emergence of the shelf-connected supply chain. Key to the shelf-connected supply chain is the practice of intelligent and localized assortments to provide customers with the choices they want. However, this can only be achieved with an increased focus on operational and fulfillment excellence, with the right transportation network to support it. The bottom line is that the accelerated adoption of these hyper-accurate, shelf-sensing systems leaves no room for error and increases the expectations and pressure on manufacturers to fine-tune their logistics systems so that they can deliver on-time and in-full.

Pop-Up Retail. As exemplified by the seasonal Halloween costume and holiday toy locations, pop-up retail stores have risen in popularity. This has given big-box retailers much to consider when it comes to appealing to seasonal niche markets and creating unique shopping environments that engage customers and increase brand relevance. Yet these seemingly simple-to-operate pop-up stores can have far reaching implications on the dynamics at work within their transportation network. With many pop-up stores, space is limited; making carefully-timed shipments is critical in ensuring a regular pipeline of product is headed to the store. For the many mobile pop-ups that literally disappear at the end of each day, only a small amount of stock can be stored. These conditions change the transportation network dynamic through smaller and more frequent shipments, which have the potential to increase network costs. For this reason, it is critical that retailers look at their network holistically and focus on network optimization strategies to mitigate the complexity and cost.

Unless you’ve been on vacation for the last several months or more, none of these trends should be a surprise. There has certainly been a lot of buzz created around broader supply chain strategies, but what about transportation? Clearly there is a need to be more agile, to avoid network bottlenecks and to mitigate escalating costs, putting the effectiveness of current practices in question. To adapt, retailers and manufacturers should really look to employ these strategies:

Think Holistically. Trends such as multi-channel and pop-up retailing are creating new dynamics within the transportation chain, including an influx of parcel freight and a change in network order dynamics, both of which can significantly drive up transportation costs. Taking a step back to look at how you can maximize your available network resources to mitigate cost and risk and maximize service will drive considerable value.

Optimization is not a commodity. While transportation solutions have continued to enjoy an increased adoption rate, many shippers have been opting for simpler, quicker to deploy solutions with a “good enough” approach to value. The challenge here is that the problem-solving ability of any transportation solution is what provides the majority of the value that drives the business case, meaning that significant dollars are being left on the table in lieu of simplicity. Shippers should look to measure the cost of the “wrong answer” when evaluating their existing practices.

Beyond analytics. Advanced analytics has become a key technology trend across many solution areas including transportation, but are analytics alone enough? Are there ways to bring those metrics in line into actual operational processes instead of a separate off-line activity? Shippers should look for use cases where they can leverage analytics to enable real time, execution-level decision making.

Plan incrementally and iteratively. How do you combine the desire to create economic density for effective transportation optimization with the need to be able to react to new orders and rapid changes to existing orders? The answer is having the ability to iteratively and incrementally plan your network by only releasing loads for execution that are either optimal or just have to be processed because of time limitations. The rest should be left in the pool for your solver to improve as new data becomes available.

Fabrizio Brasca is vice president, global logistics, JDA Software. He is responsible for developing innovative transportation and logistics strategies across all industry verticals.

Guest Commentary: Transportation Optimization Requires a Holistic View That Maximizes Service Across All Orders While Minimizing Costs

Guest Commentary | By •

Retailers, manufacturers and other shippers often operate global transportation networks composed of their own assets as well as third-party carriers, in an environment characterized by order volatility, fluctuating consumer confidence, increased competition and cost containment pressures.

Too often, shippers attempt to address these competing challenges through simplification. Orders are pre-assumed to be served by a specific mode based on characteristics, fleets operate around a predefined geography, and modes such as rail or intermodal are relegated to specific circumstances. Once established, these strategies are rarely revisited or re-examined from a broader view.

Most shippers lack the big-picture perspective to consider the long-term cost effectiveness of their transportation networks. By having fixed strategies, shippers might be delivering goods on time and simplifying decision processes, but they are missing larger opportunities to drive additional savings and still meet their service goals. So how can shippers quickly make the right choices that balance low costs with high service?

The answer lies in implementing new business processes and advanced technology to create visibility across all orders. With visibility into all trade-offs, transportation planners can consistently make choices that maximize service performance while minimizing network costs. The right tools, processes and business rules can drive these strategies on an automated basis, decreasing the amount of resources needed for day-to-day transportation network management.

What’s Limiting the Vision?
Many shippers today operate in silos, focusing on operational and tactical analysis separately. Strategies for specific transportation modes have been pre-established based on certain order characteristics such as weight, size or delivery date. However, this inefficient siloed practice overlooks the potential savings that could be achieved using different — or even multiple — transportation modes. Without the ability to examine the entire transportation network, it is difficult for shippers to quickly and accurately determine which combination of transportation mode, shipment schedule and route will yield the greatest savings and customer satisfaction.

Beyond cultural issues, many shippers also use in-house transportation management systems (TMS) that are not able to examine all shipping modes, build multi-modal shipments or understand complex parcel shipping rates to make the most cost-effective choices. The good news is that advanced transportation solutions are relatively easy to acquire and implement in a highly configured way that meets each shipper’s unique transportation challenges.

A Process of Continuous, High-Level Analysis
A holistic TMS supports new, iterative business processes focused on gathering facts about all existing orders, then making the best judgment based on that strategic investigation. Armed with real-time data and insights, shippers can ask and answer a range of critical questions. Can certain orders be delayed to match up with other deliveries in close proximity? Can the private fleet be used instead of paying third-party markups? Can warehouses and distribution centers accommodate early or late shipments? Can transportation modes be mixed?

Advanced TMS tools ensure that shippers are supporting a longer-term perspective, in addition to daily logistics decisions. Using the advanced TMS tools, shippers can expand their geographies to take advantage of lower commercial rates, and then quickly shift orders to their private or dedicated fleets when carrier rates climb too high.

Transportation planning cannot be a one-time activity based on a universal shipping mode, but instead must be a continuous process of analysis. Business rules must be flexible enough to change as shipping rates, order volumes, fuel prices and other transportation factors evolve. By studying the big picture for any given day, shippers can make intelligent transportation decisions that are in both their and their customers’ best interests.

The Bottom-Line Benefits
Adopting the cultural, process and technology changes necessary to achieve a holistic view of the transportation function drives benefits that are well worth the investment. Consider these real-world examples of companies that have realized significant cost and service improvements:

  • PepsiCo recognized an opportunity to add value and generate revenue by establishing an internal logistics and transportation division for its various business units. With a new, broader perspective, Pepsi Logistics Company, Inc. (PCLI) offers the best possible transportation solution under PepsiCo’s negotiated rates. PCLI manages more than 40,000 annual shipments, powered by a single technology solution and shared planning practices.
  • Kimberly-Clark implemented a TMS with optimization capabilities that allowed the planning staff to create real-time service constraints and save an incremental $12 to $14 million per year in freight charges. The TMS automatically assigns approximately 80 percent of shipments to the carrier that best balances cost with service, resulting in an aggregate reduction of 35 hours of manual planning every day.
  • By using advanced tools for visibility across all orders, MasterBrand Cabinets produces daily transportation plans based on real-time network costs and constraints, and then builds production loads in its factory that result in the fullest truckloads possible. This approach enables the company to balance the made-to-order nature of its custom cabinetry with real-world business constraints. Electronic communications with multimodal carriers track shipments until all customer deliveries are completed. MasterBrand continually assesses carrier performance, so that future tenders can be automatically assigned to the most cost-effective, highest-service transportation vendors.

An Ambitious, Yet Achievable Vision
By leveraging advanced transportation solutions and a new cultural focus, forward-looking shippers are using a holistic perspective to make strategic matches across all orders and available shipping modes, foster better transportation choices and achieve significant competitive advantage. If your business has not yet achieved this kind of broad, transformative perspective, there’s only one question: What are you waiting for?

Fabrizio Brasca is vice president, global logistics, JDA Software. He is responsible for developing innovative transportation and logistics strategies across all industry verticals.

Matching Demand Forecast Periods to Production Lead Times

Demand Signal Repositories | By •

It is common to speak of a “one number” demand forecast. And a “one number” forecast works fine if your demand forecast and your manufacturing planning are based on the same time period. For example, if you do a monthly forecast and the plant uses it to plan production for the entire month, then there is no inconsistency.

But a lot can happen in a month.

I was briefed a while back by Nitin Goyal, product manager for JDA Software’s Sales & Operational Planning (S&OP) solution. I asked him how his customers with long manufacturing lead times were dealing with this issue. He told me that some of JDA’s clients in the semiconductor industry are using banded forecasts that include a high-confidence forecast (for products the manufacturer is very certain the market will need); a medium-confidence forecast (often the “one number” consensus forecast); and a low-confidence forecast (a high demand scenario).

In this case, a manufacturer can safely make the high confidence forecast units early in the month, then produce the medium-confidence forecast units later in the month, unless they see a drastic drop-off in orders. Only if they see an unexpected surge of demand does the manufacturer ramp up the factory in the last week of the month. In the semiconductor industry, adding capacity is expensive. These banded probabilistic (“stochastic”) forecasts make a lot of sense and can improve the S&OP process.

Many companies have found that if they move from monthly to weekly forecasts their forecasts become more accurate. What if you take it a step further and produced forecasts every day? That is what Land O’Lakes did. The company moved to doing a daily rolling forecast that covers the next 28 days.

Jeanine Viani, the Director of Supply Chain Planning for Dairy Foods at Land O’Lakes, spoke at Oracle OpenWorld last month about the company’s implementation of Oracle’s Demantra Advanced Forecasting and Demand Modeling application, an optional add-on to Oracle’s Demantra Demand Management solution. This application makes use of an individual customer’s order history and compares it to the orders that have dropped in the last few days. Land O’Lakes is the first Oracle customer to use Demantra for open order correction.

You might be wondering, why forecast daily unless the lead time for your factories is also just a day?

At Land O’Lakes, the production lead time to make butter is one week and the lead time for cheeses 3 to 4 weeks. The company’s traditional weekly forecast was 45 percent accurate, captured at the item/location level. But when they do daily forecasts, the following week’s accuracy is better than 70 percent. The forecast for two weeks out drops to about 55 percent, and the accuracy for weeks three and four remains at 45 percent. So, in effect, for the one-week lead time products, accuracy is now at 70 percent rather than 45 percent. For cheeses with a lead time of three weeks, the accuracy is now 56 percent (70 percent week one, plus 55 percent week two, plus 45 percent week three, divided by three weeks) rather than 45 percent.

So, why not forecast weekly? Because the plant can base its production schedule on the most current and accurate forecast. Demand is not jumping around so dramatically – partly because many customers want their shipments on the same day every week – that they are having a hard time balancing demand and supply.

Land O’Lakes is on track to receive the payback several months ahead of the original estimate, based on reductions in inventory, coupled with a reduced need to redeploy inventory from one distribution center to another.

Finally, some companies are using Demand Signal Repositories to take downstream data and create accurate, short time forecasts and in this way become “demand driven” (see, for example, “Del Monte Foods and Shelf-Level Collaboration”). But accomplishing what Del Monte did is difficult. For many companies, starting with stochastic forecasts, or moving to weekly or even daily forecasting, will be a better intermediate step.

Guest Commentary: Transportation Strategies for Mitigating Risk as a Continuous Improvement Initiative

Guest Commentary | By •

Supply chain disruptions occur in many forms, from simple day-to-day concerns to catastrophic natural disasters. While potential risk cannot be avoided entirely, leading companies are taking a new approach to risk management and optimization. Instead of viewing risk mitigation as a one-time or periodic activity, these companies are assessing risk as a continuous improvement initiative. By adopting a combination of sophisticated technology and best-practice processes, organizations can effectively and continuously examine risk across all aspects. The following four examples illustrate how leveraging process and technology can strategically mitigate supply and transportation chain interruptions on an ongoing basis.

Design as a Process
One of the first and most common approaches to mitigating risk is to simply plan for it. Many companies leverage network design and tactical transportation modeling solutions to plan for challenges, but the difference between practice adoption and best-in-class is one of frequency.

Best-in-class organizations not only embrace proactive network and tactical transportation design, but they also take it beyond the traditional one-time or annual problem-solving event. They maximize risk mitigation effectiveness by enabling it as an ongoing, continuous process and by designating network design as an established, staffed function within their organizations.

When correctly implemented, network design as a full-time function is cost-justifiable based on the associated risk averted, money saved, and efficiencies gained. It also provides two distinct benefits: the ability to dynamically adapt strategies as supply chains evolve and the ability to anticipate and act ahead of emerging or cyclical trends.

Procurement Beyond Price
Transportation capacity availability and service-level consistency are two other examples of risk that organizations must continuously address. Factor in a challenging economy that impacts carrier solvency risk, and these issues become magnified. Companies must consider many factors when procuring a rate between two points, including the travel direction, equipment being used, committed capacity, agreed upon service levels and additional costs. This level of variation necessitates an explicit representation of the network in order to properly analyze all risk aspects. Organizations that focus solely on overall transportation cost leave themselves vulnerable to the inevitability of risk by failing to consider other risk-contributing factors affecting their transportation chains.

Advanced transportation procurement technology helps companies combat these risks by delivering the ability to model an improved representation of the network and perform comprehensive what-if analysis. Modeling the network with sufficient granularity enables systematic analysis of the potential tradeoffs – or costs – between mitigating the risk associated with each or some combination of variables, and the price of the service. When examining strategies to effectively mitigate risk, a company must concurrently consider the cost impacts of the associated mitigation options – such as how many carriers to secure per lane – and evaluate their worth accordingly to arrive at the best option for that particular organization’s business.

The “right” option for the company is often somewhere in between the highest-cost but safest option and the least expensive but also least secure option. Conducting optimization analysis to represent the network enables the company to examine that low-level detail and identify valuable tradeoffs to arrive at the right mix that fits its business.

Collaboration With Partners
Another granular form of risk is lack of visibility within a supply or transportation chain. Inbound shipping processes represent a common example of lack of information or interaction. While a company knows what order it placed, it often does not have insight into what the supplier’s inventory is, when the goods will ship or if they will be short-shipped. Traditional electronic signals such as Advance Ship Notices (ASN) are typically sent only after the goods are in transit, thus limiting a company’s ability to proactively adjust or re-plan if something goes wrong. The impact of these risks to the company’s supply chain might manifest as not receiving required materials at its factory/distribution center or a short-shipped truck that is now only half full.

Lack of visibility also poses a threat in the operational realm. A company might not have timely insight into supplier information affecting the orders it places, such as the supplier’s capacity or how the supplier schedules appointments for the ordered loads. The ability to share these signals and gain needed visibility requires both technology and processes that enable partner collaboration and communication. With these in place, suppliers can let companies know immediately what is being shipped so the company can plan accordingly. By providing carriers with the mechanism to share capacity and other details and by enabling them to interact with the dock scheduling process, companies are able to see exactly when each carrier will arrive at the dock and ensure that carriers are not scheduling concurrent appointments that cause inefficient wait times. With the ability to receive status updates regarding when trucks are in transit as well as revised estimated times of arrival, companies can react quickly and proactively to increase performance and service.

Closed-Loop Processes
Leveraging closed-loop processes as part of a continuous improvement paradigm is another strategy in mitigating risk. While companies might track the occurrence of a disruption within the supply or transportation chain, they commonly do not have the ability to capture why the disruption happened. Technology and processes can deliver the mechanisms to tie it all together.

Being able to record the reasons behind a disruption enables this feedback to be used as inputs into subsequent processes, such as procurement or supply chain design. Companies can leverage the results of network risk mitigation what-if and other analysis as information in their transportation management and other systems. These capabilities enable a company to help ensure that it can effectively put its plans into practice and redirect when necessary based on new information and events to minimize disruptions and overall risk.

Fabrizio Brasca is vice president, global logistics at JDA Software. He is responsible for developing strategic transportation innovations across all industry verticals.

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