A leading air freight services provider wanted to implement industry best practices to enhance organizational growth and boost efficiency. To identify and focus on key performance metrics in the transportation industry, the air freight services provider approached SpendEdge to devise a comprehensive approach that would help them identify and benchmark the industry best practices. A detailed quantitative analysis of various categories within the supply chain was carried out to identify and benchmark the industry best practices that would help them improve competitiveness.
About the Client:
The air freight services client was facing challenges in benchmarking the best practices in the transportation industry.
How did SpendEdge Help the Client?
- Step 1: Identified peer group practices
The first step revolved around the process of identifying the peer groups in the transportation industry. By doing so, the client was able to identify the standards of excellence for services and processes and then implement the required changes to reach the optimal industry standards.
- Step 2: Comparing and benchmarking the best practices in the industry
A detailed analysis of the gathered data helped the client to compare and benchmark the industry best practices. This enabled the air freight services provider to discover the extent to which their present performance lags when compared to the leading players in the industry.
- Step 3: Developed a comprehensive approach to continuously monitor and recalibrate the industry best practices
A three-step benchmarking model was devised to help the transportation industry client to continuously monitor and recalibrate the industry best practices. The incessant evaluation of the benchmarked industry best practices helped them in reinstituting the benchmarking process.
Moreover, the correct implementation of the above steps resulted in the development of realistic, clear-cut standards for the processes involved in the identification of best practices.
Key questions answered in this industry best practices benchmarking engagement include:
Benefits of the Engagement:
The industry best practices solution offered by our experts helped the air freight services provider devise a comprehensive three-step benchmarking model that enabled them to keep track of industry standards. It also helped them lower freight costs and enhance services to maximize customer satisfaction and retention. Our industry best practices experts worked as an extension of the firm to identify the success factors that uncovered major opportunities for improving air freight services.
Why incorporate industry best practices benchmarking?
It’s no secret that to improve organizational growth its essential to identify and implement the best practices prevalent in the industry. Benchmarking industry best practices is the key to improving performance and overall business growth. Adopting best practices also helps firms to fill skill gaps, encourage leadership, enhance organizational efficiency, and achieve sustainability.
However, to withstand growing competition, transportation industry players must adopt better strategies to deliver better results. Moreover, industry best practices benchmarking does not mean replicating what other competitors do, it helps organizations gain detailed insights into the acceptable industry standards.
As transportation firms start focusing on delivering top-notch customer experiences, industry best practices benchmarking becomes essential to stay a step ahead of competitors. Such an approach to drive organizational growth is as simple as comparing what your organization does to what the best in the industry are doing. Therefore, it is essential to evaluate the benchmarks on a periodic basis, in order to stay abreast of the constantly changing industry trends and best practices.
To know more about our industry best practices solution
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Overview of the Logistics Industry
The logistics industry is confronting immense change owing to the presence of digital transformation, changing customer expectations, and evolving business models. With the relentless growth in the competition, companies are planning to invest highly in product innovation and expansion facilities to strengthen their foothold in the market. Contract logistics at large involves the process of handling activities such as designing and planning supply chains, facilities, and warehousing to improve the supply chain efficiency. Moreover, the growing convenience of online shopping is compelling businesses to outsource their logistics activities.
Some of the factors that may curtail the growth of the contract logistics space include:
- Rising fuel costs: Today, prominent contract logistics service providers are witnessing a fluctuation in the fuel prices. Higher fuel prices will have an adverse effect on the transportation as it escalates the surcharges added to freight rates. Even in the midst of the fluctuations, prominent contract logistics will face the need to ensure consistency in their product offerings while meeting the quality requirements.
- Improving customer service: The consumers of today are informed and are demanding transparency in their supply chain activities. To keep pace with the customer demands, contract logistics providers need to improve their technical capabilities and streamline their supply chain operations to stay relevant and offer more reliable services to the customers. In addition, contract logistics service providers need to meet the regulatory compliance to reduce the time-to-market for the products.
To address such challenges and adequately gain relevant insights into the market, leading contract logistics service providers are augmenting the need for a category market intelligence solution. Request a free proposal to access our service portfolio of category market intelligence solutions.
The Business Challenge and Our Journey
The client, a renowned contract logistics service provider, wanted to understand the market landscape in terms of the drivers and the potential challenges in the market. With the help of a category market intelligence solution, the contract logistics service provider needed to analyze the supply and the commodity price trends and understand the supplier pricing and the cost structure to deliver the products to the target audience. The primary objective of the client was to assess the technology landscape and streamline their technical capabilities to improve the supply chain efficiency.
To analyze the latest developments in the contract logistics services space, the procurement experts at SpendEdge carried out extensive research comprising interviews and discussions with prominent stakeholders in the market. Through category-specific websites, trade journals, and specialized publications, the experts also compiled information needed to eradicate supply chain risks.
The category market intelligence solution offered by SpendEdge assisted the contract logistics service provider to devise a robust SWOT analysis to identify the key risks in the logistics industry. Moreover, the solution also offered relative insights into the procurement best practices that can help the contract logistics service provider to improve supply chain efficiency and ultimately reduce excess inventory costs.
Fundamental Questions Answered to the Contract Logistics Service Provider :
For detailed insights on solutions offered, request for more information.
The engagement offered insightful ways for the contract logistics service provider to gain information on the market dynamics in terms of the raw materials and the indirect spend involved in the supply chain process. The solution further assisted the client gain early warnings of any potential problems and mitigate robust supply chain risks.
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Overview of the Transportation Services Industry
The transportation services industry encompasses several sub-sectors including subways, municipal buses, goods transport systems, and other similar modes of transport. Just like the other peer industries, the leading players operating in the transportation services sector are looking at expanding their business units to establish their presence in the market. The transportation services sector is a capital-intensive one, and the demand for these services is further driven by the macroeconomic trends in global exports and imports.
Here are a few factors that may curtail the growth of the transportation services industry:
- Economic factors: Transportation projects may have an adverse impact on the community’s economic development objectives including employment, business activity, property values, productivity, and investments. The main aim of such projects revolves around improving the overall accessibility while reducing transportation costs. Hence, it becomes necessary to consider both the positive and negative impacts of economic factors.
- Community impacts: These include the impact of a transportation project on adjacent communities beyond specific factors that adversely affect the direct users of transportation facilities. It is also referred to as ‘social impacts’ and includes changes in walking environments, views, noise, and land use mix and community cohesion. Also, community impacts serve as a significant decision factor when transportation services providers are weighing both the adverse and distributional effects of proposed projects.
To counter these challenges and identify the potential risks in the supply chain, organizations are opting for supplier risk analysis solutions. Supplier risk analysis solutions help businesses to identify, monitor, detect, and mitigate threats to maintain supply chain continuity and profitability.
The Business Challenge and Our Journey:
The client, a well-known player in the transportation services industry, was looking at leveraging supply chain risk management solutions to enhance the quality of the supply-chain and maintain productivity standards while mitigating risks and cutting down costs. With the help of industry best practices, the client wanted to collect, analyze, and manage supplier information efficiently. The primary objective of the transportation services provider was to gain actionable insights into the current industry trends and manipulate data, compliance, and risks across their global supply chains. They were also looking at implementing robust supply chain management solutions to reduce supplier failure rates.
To identify challenges in the supply chain activities, the procurement experts at SpendEdge carried out extensive research comprising interviews and discussions with prominent stakeholders in the transportation services sector. The experts also compiled information across a wide array of reliable sources such as trade shows, company presentations, industry forums.
The supply chain risk management solutions offered by SpendEdge assisted the transportation services provider in identifying and collaborating with the right suppliers to bring about a positive impact on their overall business performance. Our solutions helped them in profiling the suppliers based on the typical risks associated with each. Moreover, the client was successful in reducing the cost of maintaining supplier data, which improved the overall supply chain efficiency.
Fundamental questions answered in this supply chain risk management solution include:
SpendEdge’s supply chain risk management solutions offered relevant insights into the compliance and regulatory issues in the transportation services industry. The client was able to identify and collaborate with selected suppliers based on the associated risks to improve the overall supply chain efficiency.
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Overview of the logistics industry
In the recent years, the logistics industry is witnessing robust challenges in terms of high operation costs, low margins, and a shortage of talent. To address these challenges, prominent organizations are planning to streamline their service capabilities to improve delivery performance and increase customer satisfaction levels. With the rising demand for one-stop solutions, businesses are entering mergers and acquisitions to tap potential markets and enhance their functional capabilities. Moreover, the growth of reversed logistics space can be attributed to factors such as robust GDP growth, globalization, and increasing foreign direct investment.
Some of the factors curtailing the growth of the reverse logistics space are:
- Tracking warranty: As reverse logistics involves the process of replacing commodities directly from the customers, it becomes difficult for the companies to track the warranty of the products. In the case of third party repair by an OEM, it becomes essential for businesses to track those secondary warranties and generate appropriate claims for the warranty service offered.
- Improving efficiency: As the reverse logistics space is witnessing relentless competition with the presence of a considerable number of competitors, it becomes essential for the businesses to leverage technological capabilities to streamline their work and deliver efficiency. With the help of advanced software, the company at large can become much more productive and offer seamless and reliable services to the customers.
The Business Challenge and Our Journey
The client, a renowned reverse logistics provider, wanted to accurately classify the spend and gain better visibility into their overall process. With the help of industry best practices, the client wanted to efficiently streamline their process to identify critical savings opportunities in an easy manner. Moreover, through a robust spend analysis solution, the client further wanted to gain accurate, consistent and timely insights into the spend and accelerate their decision-making process.
To identify and calculate the market trends of commodities, the procurement experts at SpendEdge carried out extensive research comprising interviews and discussions with prominent stakeholders in the reverse logistics space. To identify the potential bottlenecks, the experts also compiled information across a wide array of reliable sources trade shows, industry forums, and company presentations.
The spend analysis solution offered by SpendEdge assisted the reverse logistics provider to compare the spend with that of the industry peers and gain substantial savings. Moreover, the solution also helped the client identify bottlenecks in terms of fraud and non-complaint activity and prioritize savings opportunities.
Fundamental questions answered in this spend analysis solution include:
During the course of the engagement, the reverse logistics service provider was able to identify and prioritize sourcing opportunities and devise an effective spend management strategy. In addition, with the help of the spend analysis solution, businesses leaders can monitor performance on the KPI’s and gain granular insights into the spending trends and buying activities. The solution also helped the reverse logistics client understand the products specification including the quality, availability, and service requirements.
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Today, the importance of transportation is far greater than getting people and goods from point A to point B. Advancements in technologies have enabled the logistics and transportation industry to improve the quality of their services. Global businesses and international trade rely highly on the transportation services to move the flow of goods within the economy. Virtually everything around us from the clothes we wear to the device we use is sourced from multiple locations across the world. As every component has to be transported to different players across the supply chain, the overall cost keeps on increasing due to shipping charges and other value-added activities. As a result, the transportation industry is constantly on the lookout for ways to contain this cost. So what are the top trends in the highly competitive transportation industry for 2018?
TRANSPORTATION INDUSTRY TRENDS
Last year, the hype was all about self-driving cars and its ability to seamlessly drive around cities without any mishaps or accidents. This year though, the concept has evolved to bigger vehicles – self-driving trucks. A combination of AI and myriad sensors can correctly evaluate road conditions and learn how drivers behave under specific conditions. Additionally, vehicle-to-vehicle (V2V) communication systems can share learned information and improve the AI driving pattern. As a result, such self-driving trucks can potentially become better drivers than human themselves. Tesla recently announced Tesla Semi an all-electric truck with Tesla Autopilot, which allows semi-autonomous driving on highways.
Blockchain in logistics
One of the major problems faced by the transportation industry is the difficulty to effectively look at performance history and trace the flow of goods. Blockchain’s ability to provide security and transparency efficiently solves this complication as a logistics company can quickly recall the product back to its origin in case any damage is there. Additionally, if a potential customer wants to buy a used car, he may not have any information in the previous condition of the vehicle. However, with blockchain, all parties involved in the transaction can have a clear view of the past records. Another interesting use case of this technology can be to estimate the cargo space for specific shipping orders. The data can be used to calculate the shipping costs, after which automatic contracts can be executed when certain conditions are met and consequently stored into the blockchain network.
What will the future of logistics industry look like? Will it be as easy as ABC when the teleportation technology is finally ready? That may stand true in a very far future, but the technologies and developments at present doesn’t look to disappoint the logistics industry either. A number of disruptive technologies including IoT, autonomous vehicles, blockchain, robotics, and predictive analytics are impacting how the logistics industry will function in the near future. Such unprecedented change in technologies is bound to drive the supply chain to be leaner, faster, and automated. That’s a huge sigh of relief for procurement professionals who are having sleepless nights due to increasing overheads and pressures to meet customer expectations.
The Future of the Logistics Industry
Underground Freight Networks
Today, the majority of the consumer commodities such as water, gas sewage, and oil are transported through underground pipelines. In the near future, delivery of the consumer goods may follow the same path. Some countries in Western Europe are already testing out ways to transport consumer goods through automated subterranean networks. For instance, in Belgium, the University of Antwerp started working on a project “Underground Container Mover” that would transport large 40ft containers along a 21km long conveyor belt carrying 5,500 shipping containers each day. Such systems would enable a constant flow of goods without the worry of traffic and accidents.
Fuel and vehicle costs are not the only major cost components for goods transportation in the logistics industry. The vehicle has to be manned by drivers and delivery personnel, which incurs costs. Also, drivers and delivery personnel can only perform a certain amount of deliveries in a day. So the companies in the logistics industry are looking at autonomous fleet solutions to solve such issues. One of the most popular solution in this regard is drone delivery which has been optimistically looked upon by Amazon. Autonomous vehicles are also making its way in the warehouse in the form of vision-guided fully autonomous mobile robots, which can automatically process orders and move inventory across the warehouse.
Digitization has highly influenced the logistics industry. The growth in e-tailing and connectivity technologies have brought in new solutions for the logistics industry. Digitization in trucking has forced traditional freight brokers to revamp their business model towards mobile freight brokerage solutions. Companies are looking to implement uberization of trucks in order to utilize empty spaces and contribute towards the sharing economy. In the future, apps may be able to match truck drivers with shippers requirement on routes, rates, and schedules. Such apps can also automate the delivery dispatch, status change, load-finding, and driver payment processes. The end result would be savings in operating and fuel costs by improving asset utilization.
For more information on the future of logistics industry, supply chain technologies, and autonomous fleet systems:
Over the past few years, the global transportation services industry has become capital-intensive and typically comprises of services such as freight transportation by air, rail, road, and marine modes. As a result, leading companies in this industry are focusing on providing seamless transportation services at cost-effective prices to stay ahead of the competition and deal with challenges in the market. Additionally, the rise in crude oil prices is forcing companies operating in the transportation services space to enhance their overall competence and profitability over the peers by adopting supply chain analysis solutions. Supply chain analysis help companies operating in the transportation services to devise best-in-class and cost-effective product and service offerings to the customers and increase their overall profitability.
With years of proficiency in offering a wide range of supply chain solutions, SpendEdge helps companies operating in the transportation services space to implement an end-to-end follow-up procedure to resolve any discrepancy across the supply chain.
The Procurement Pain Point and Insights Offered
The client, a leading transportation services provider with business units spread across various geographies, was facing predicaments with their supply chain network that was vulnerable to disrupt their ambitious growth plans. Additionally, the client had an extremely complicated production and distribution network with several storage locations and modes of transportation for delivering its product offerings to customers. As a result, they wanted to evaluate their company’s supply chain management capabilities compared with leading practices across the transportation services industry.
The supply chain analysis experts at SpendEdge tailored a comprehensive research methodology to cater to the transportation services client’s business requirements. This research approach included primary and secondary research methodology coupled with qualitative and quantitative data collection procedures.
Through the course of this supply chain analysis engagement, the transportation services client was able to design a strategic plan for six critical areas including organization structure, planning, operations, sales and customer service, supply chain network, and performance management. This helped them evaluate their company’s supply chain management capabilities compared with leading practices.
Fundamental questions answered in this supply chain analysis engagement include
With the help of this supply chain analysis engagement, the transportation services client was able to gain actionable insights into the opportunities at the functional levels. Furthermore, the client improved their service levels, streamlined planning and operations processes, and increased reliability.
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As the levels of global trade increases, both in terms of volume and complexities, transactions have started taking place between multiple parties and suppliers. Additionally, such transactions are also happening over large geographies. To cater to such increasing levels of trade, businesses have to manage logistics services spanning over vast territories. This has increased the amount of shipping that takes place both in terms of distance and volume, adding to the overall cost and time. It has become a significant challenge for the organizations to manage their transport logistics efficiently. Consequently, businesses are relying on transport management system (TMS) to move freight from origin to destination reliably, efficiently, cost-effectively.
Benefits of Transport Management System (TMS)
Transport management system can drastically reduce the total freight time and enable companies to stock less as turnaround times are significantly optimized. Also, a TMS solution integrated with an ERP system helps reduce the number of errors during entry, which saves time caused by data errors. Additionally, a TMS working in tandem with warehouse management system (WMS) provides better visibility into the supply chain and help maximize productivity and improve the process of moving goods.
Since the transport management system assures faster delivery of goods, it allows the company to function with a minimal level of inventory. As businesses can ascertain the time taken for shipments, they can accurately forecast their inventory requirements and hold an optimal level of stocks.
Savings in Inventory and Freight Cost
As a result of holding lesser inventory, the company can potentially save millions in inventory cost. Since they don’t have to maintain as much inventory as before, they can better utilize the inventory cost in some other business function. By implementing a TMS solution companies can save as much as 90% of the total freight costs which can enable them to remain competitive and even afford price reduction on the final product.
Improved Customer Service
A transport management system with reporting and analytical ability allows companies to monitor the outcome of each and every decision they take. For instance, when businesses partner with multiple carriers, TMS solutions analyzes the overall cost, freight time, and other parameters of each shipping provider in order to perform analysis on the effectiveness of each partner. The solution can provide detailed insight into the cost incurred and the time taken by each partner, which can help them make the correct decision in the future. This way they can choose partners based on the needs of the customer. For instance, if customers prefer faster deliveries then they can select carrier with fastest transit times, and choose economical carrier if cost is the primary concern of the customer.
For more information on transport management system, supply chain, logistics software, and TMS solutions:
As the volume of global trade increases, the customer base gets dispersed in all parts of the world. To carter to such vast market, a proper logistics network is essential which can ensure safe delivery of goods. Corrugated packaging plays a vital role in preserving the status and condition of goods to be transported by providing extra strength, resilience, and protection against environmental factors. The market for corrugated packaging is growing due to factors such as an increase in economic activities in developing countries and the growth of e-commerce industry.
Do-it-yourself Corrugated Pallets
Majority of the packaging and logistics company are opting for do-it-yourself corrugated pallets that can be assembled in-house. Such pallets are an engineered material that does not have any defect, and additional tools or equipment are not required. Consequently, it ensures safe assembly of corrugated packaging and results in cost savings in terms of logistics.
Corrugated Point-Of-Sale Display
There has been an increasing adoption of corrugated point-of-sale display within the retail sector as it offers high visibility at a relatively low cost. Additionally, it can be easily customized and installed at any location in a retail setting. Floor display, counter display, pallet display, endcap display, and sidekick display are the different types of corrugated point-of-sale displays available in the market.
Recycling of Corrugated Packaging
As corrugated cardboard sheets can be easily disassembled and made of recyclable material, companies are putting an effort towards recycling the corrugated packages. Also, by recycling the corrugated cardboard, a fiber can be produced that can be used for manufacturing of new corrugated packages. Almost 90-94% of corrugated packages are recycled every year.
Corrugated Package for Premium Packaging
Corrugated packaging is finding its way in the premium packaging of expensive consumer products such as perfumes, jewelry, and gift boxes to indicate high cost and quality of the product. Companies are using corrugated packaging for premium products as they are not only cost-effective but also is light and durable. Additionally, it can also be coated with adhesives and undergo treatment to make it flame resistant.
Read more about the top trends for corrugated packaging along with pricing trends, procurement best practices, supplier risks, pricing insights, strategic purchasing, and procurement insights in SpendEdge’s upcoming report on the global corrugated packaging market.