Whether you’re dealing with a simple supply chain or a complex, multi-faceted cross-border model, you’ve likely dealt with some form of supply chain pain that kept you up at night.
Supply chain pain can cost your company thousands of dollars in added expenses and lost productivity, especially if you have no solution to prevent issues from coming back to plague you in the future.
Fortunately, the 4PL model has the prescription for solving problems now, with the ability to respond and pivot when challenges arise down the road.
Here are some of the most common types of supply chain pain we hear about from shippers, as well as how a 4PL can help you solve them:
- Rising operational costs
We live in a global marketplace. As a result, modern supply chains have grown organically in size and complexity, bringing added costs. 4PL optimizes your supply chain to be as cost-effective as possible by using mass buying power, combined data from technology such as transportation management systems (TMS) to make faster strategic decisions with confidence.
4PL providers offer a suite of optimization tools that allow you to manage multiple vendors, track inventory and orders, and coordinate resources from several vendors in different locations. The result is a system that’s more streamlined, efficient, and cost-effective
2. Outdated Technology
Remember when Excel was considered modern-day software you could use to manage your supply chain? Imagine trying to use it on today’s complex models!
Companies are no longer interested in “out-of-the-box” technology. Instead, they demand software designed for their specific needs. A 4PL can help with robust cloud-based technology that gathers data from various internal and external sources and puts it all together for real-time visibility into your supply chain from just about anywhere.
Along with TMS, Enterprise Resource Planning (ERP) software integrates material planning, transactions, and many other critical functions into one cohesive system that improves collaboration and keeps you competitive.
3. Service Failures That Lead To Supply Chain Pain
Service failures happen. Anything from unforeseen natural events to a flat tire can send your supply chain efficiency into a tailspin. Although a 4PL can’t control the weather (yet!), it does have the ability to allow you to respond in case something interrupts the flow of your goods.
4PL providers make it easy to quickly swap out routes, modes of transportation, and even service providers during a service failure. In addition, your 4PL supplier will have all the backup suppliers ready to go, so you’re not scrambling while your customers are left waiting for your products.
4. Inefficient processes
Remember that old saying about chains being as strong as their weakest link? If one part of your supply chain is inefficient or is hampered by bottlenecks, the whole system can be affected, resulting in delivery delays and unhappy customers.
A 4PL provider considers the system an integrated whole, identifying weak spots that may impact the entire network. Best of all, your provider will make recommendations that will eliminate inefficiencies and improve the overall process.
5. Lack of visibility and reporting
When you suspect something is going wrong within your supply chain, you need instant visibility to identify, diagnose, and fix the issue. Unfortunately, investigating problems any other way isn’t efficient enough in the world of modern supply chains.
4PL providers offer real-time visibility into your entire supply chain, including segments outside of transportation covered by TMS. For example, Warehouse Management Systems (WMS) provides insights into storage, picking, packing, and loading products for transportation. In addition, financial supply chain software tracks capital costs and identifies opportunities to increase working capital. When integrated, supply chain technology not only gives you complete visibility into your entire system but also provides rich data that helps improve decision-making across your supply chain’s tactical, operational, and strategic processes.
6. Global supply chain instability
The COVID-19 pandemic demonstrated how fragile our supply chains genuinely are. Without proper optimization, supply management could break down due to other unforeseen future events, such as natural disasters or sudden economic calamity.
With a 4PL, your supply chain has unprecedented on-demand agility that allows swift response to nearly any circumstance. Scale up or down, change suppliers, or optimize routes with speed and dexterity backed by business intelligence that takes away the risk of making hasty “knee jerk” reactions and focuses on making informed decisions in a crisis.
7. Damages and non-compliance
Few things in shipping are as annoying as fines, especially when they hold up shipments and eat into your bottom line. Even worse is the realization that the majority of penalties are entirely avoidable.
The key to mitigating fines due to damages and non-compliance issues is collecting data from your system to identify root causes that could lead to penalties being incurred. For example, data that tells you about order lead time, frequencies, quantities, and modes can help you optimize routes, timing, capacities, and more to keep your products efficiently and in compliance.
One of the best aspects of the 4PL model is that it builds correlations between data and the most crucial parts of your business, including cash flow, inventory management, waste control, and customer service. From there, your 4PL supplier can develop predictive models that will solve virtually any logistics issue.
It’s the best prescription for solving supply chain pain and preventing it from coming back!
If you’re interested in learning how Cedric Millar can significantly transform your current supply chain into a more sustainable, flexible model, we’d love to chat with you. Contact us at 1-888-998-1009 or via email at info@cedricmillar.com anytime for a no-obligation discussion.
