The biggest challenges of the "new" logistics and where to focus to tackle them
As all markets become more competitive, and consumers demand the highest performances at the lowest price, companies must rethink their strategies in light of swiftness and effectiveness. At the core of this change of pace, there is supply chain management. So that, after the 1990s' "new economy" and the 2021's "new normal", we believe it is the right time to talk about the "new logistics". A logistics which must nowadays respond to several, never-before-seen requisites, like scalability – the ability to adapt volumes and speeds during sudden shocks, like the 2020 lockdowns – and elasticity – the capacity to constantly evolve together with the continuous technological advancement. Let’s see which are the biggest challenges of this new paradigm, and how managers and planners can run their win game, from the very beginning.
Keeping up with the "network economics"
Nowadays, logistics managers have to interface with an ever more complex industry. In our previous articles, we have much talked about the challenges of new trends like reverse logistics, last-mile transportation, and next-day delivery. Yet, perhaps a greater organizational strain is represented by the rising prominence of multiple-source logistics: in today’s, hyper-connected economy, all major companies have realized the importance of eliminating any dependence from a single provider, so to decrease their exposure to regional shocks.
Some examples? When the uncertainty of Brexit regulations was causing incredible discrepancies in supply chain fulfillment, all companies operating with the United Kingdom were urged to move their operations elsewhere. Equally, we may cite the spread of the pandemic and its tragic consequences on China’s export capacity, which froze most global productive processes, or, more recently, the 2021 obstruction of the Suez Canal.
Predictably, such a strategy remarkably complicates the work of the logistics manager, with inventory flowing from and towards multiple locations. In this scenario, the secret is to plan down to the smallest detail, bearing in mind the whole picture. How to? Here are two best practices for logistics managers:
Your planning team must be smartly organized: each person should be accountable (and held responsible) for one "piece of the puzzle" (e.g., a specific line of business, a single provider or destination). Make sure that every planner knows in detail what is happening in their own field of responsibility - and that they have the right tools to do so! Then, combine their insightful knowledge with your ability to plan the bigger picture: and voilà, teamwork makes the dream work!
Facts, facts, facts: when logistics is more complex, visibility and traceability become crucial. In order to tackle (and possibly prevent) delays, mismatches, and bottlenecks, you will want to know where your inventory, vehicles, and drivers are at any time. This will enable you to make decisions with a minimum degree of uncertainty and to foresee any accident. Check out how to maximize your supply chain awareness!
Empty runs and drivers shortage
The paradox of truck loading: sometimes, you are forced to release a half-loaded truck, because you didn’t have enough eligible goods to fill the whole container; some other times you have too many goods to deliver, but no human resources to do it, as the widespread shortage of truck drivers gets worse day after day. In the first case, the number of necessary runs to fulfill your operations will float up, and so will the costs for gas, tolls, and workforce. In the second case, your business will suffer the consequences of supply chain discontinuity: delivery delays (and, thus, unhappy clients), costs of updating the whole planning, and a vicious chain effect on the whole supply chain. Although apparently opposite, such situations are two faces of a single problem: planning inefficiency.
But how to solve the goods-drivers mismatch? Well, allocating orders to minimize routes and finding workforce on the territory at the right time is something that your Excel paper can’t solve. Here you will need the help of a logistics management software - or better, a logistic management network, that:
Analyses your warehouse existences and allocates goods in a way to fill every truck and minimize routes;
Helps you choose the fastest, lower-cost itinerary;
Permits you to track vehicles and locate your workforce on the territory.
We know that these are only some of the challenges that logistics managers must face - the confrontation with scale economics and the fulfillment of sustainability standards are some other examples. Still, here at Cargoful we believe that smart solutions can solve even the most complex problem. And make sure that our clients live their most serene and productive working life. For logistics is, actually, the best job in the world!
