Managing a global supply chain effectively is challenging even when the economy is strong. During economic downturns, it can be like traversing a minefield—every step fraught with uncertainty and risk. Supply chain efficiency is paramount.
Logistics management providers can be their clients’ compass during these periods, allowing them to plant their feet with confidence. To do so, however, providers must do more than simply offer their standard solutions. They must be true partners, through thick and thin.
Here are a few ways in which leading logistics technology providers distinguish themselves during periods of economic uncertainty—and ensure their clients come out on top.
Cutting costs is critical to supply chain efficiency, and data holds the key
As margins shrink, shippers become increasingly concerned with cutting costs. This is incredibly difficult, though, if they don’t have total visibility into their freight spend.
A fully integrated TMS System boosts visibility dramatically, ensuring that data from across a company’s disparate systems is centralized to provide a complete picture. Still, data is just numbers before it’s analyzed for meaningful insights. And since every shipper has a different level of understanding and experience around data analytics, it’s the responsibility of providers to bridge the gap between raw data and actionable insights.
When shippers have access to intuitive business intelligence tools—and guidance from their provider—it’s easy to identify opportunities to bring costs down. For example, they might spot one facility that’s relying heavily on premium freight, allowing them to step in and implement controls to prevent unnecessary overspend.
Inventory becomes a luxury, so a JIT model becomes more attractive
During boom times, companies are often eager to up production to meet increased demand. But when the name of the game is cutting costs, inventory becomes something of a luxury, forcing shippers to pay high warehousing costs to store goods they have no guarantee of selling.
As a result, many shippers implement a just-in-time (JIT) inventory model during economic downturns. By receiving goods on an as-needed basis, companies can decrease waste and free up cash that would otherwise be spent renting space for boxes to gather dust.
However, to make this strategy work, shippers must be confident in the reliability and efficiency of their supply chain. Even a small disruption or delay can cause the entire supply chain to shut down, resulting in late deliveries and dissatisfied customers. End-to-end visibility is essential, and providers must work closely with their clients to provide it for a JIT system to function as it should.
Capacity requirements go down, and shippers can leverage this to secure the best rates
As demand decreases, the need for carrier capacity shrinks with it. Smart shippers can capitalize on this by negotiating better deals with their most reliable and trusted carriers. After all, shippers must avoid sacrificing quality in their quest to cut costs if they want to hold onto customers, so simply opting for the cheapest solution is not a viable option. And while top carriers can pick and choose who they work with during boom times, they’re usually on the lookout for consistent freight during downturns—incentivizing them to offer more competitive rates.
Providers can help their clients become more attractive to top carriers by ensuring their supply chain operations tick along like clockwork. When delays at the warehouse are minimal, for example, carriers are more likely to enter into low-cost contracts with shippers, confident that everyone’s best interests are being met.
A partnership that can weather any storm
At CTSI-Global, we’ve supported our clients through the good times and the bad for more than 60 years. We’ve successfully navigated numerous economic downturns that have wiped some of our biggest competitors off the map—and we’re standing stronger than ever, alongside our clients.
Find out what a difference the right partnership makes. Contact us today.