Managing global freight and ocean container movement now requires more dedicated insight as companies have expanded internationally. And no event outside of COVID-19 has exposed just how extensive, yet fragile, logistics networks and capacity flows have become over the last several decades.
To adapt, some manufacturers have adopted progressive supply chain approaches that move from "lean models to more flexible ones like "sense and respond." But not all businesses have successfully met the challenges.
Globalization forces supply chains to consider all events, from regional holidays and ocean weather patterns to geo-political turmoil and currency fluctuations. Moreover, 2020 introduced yet another element: navigating a global pandemic.
Challenges and changes
Supply chains, or instead supply networks as they exist now, are multi-national and prioritize agility, resilience, and flexibility to keep the lights on. However, sophisticated supply chain characteristics often pressure logistics operations and the constant strive for cost reduction. In addition, there are several other challenges to manage.
- The SKU explosion: Customers want all options now, not just a few colors, sizes, designs, you name it. What’s harder is that preferences can vary by country, region, and city in many cases.
- Customer expectations: Customer satisfaction, and retention, rides on availability and speed. Essentially “I want this now.” Ensuring global goods are on-hand so fulfillment can execute in hours rather than days or weeks places enormous pressure on companies today.
- Cost compression: Business revenue and profitability are paramount, and supply chains exist to drive both. A myriad of forces constantly attacks margins. Even small increases in margin can translate to significant shifts in shareholder value and market capitalization, which can fuel R&D, market expansions, M&A activity, and other growth avenues.
- Hyper-competition: With technology driving innovation, many once-stable industries have been upended by novel competitors. The digital-first models that blow apart traditional market barriers to entry add more pressure to companies, and rapidly compressing innovation cycles continue to mount.
A globalized supply chain puts many critical product and raw material streams far away from the final customer. As distance increases and visibility lessens, not knowing what inventory is in motion and where it’s located is unacceptable. A global health crisis has highlighted how fragile most extended supply chains are. Those that invested in more agile sense and response capabilities have been able to scale down and back up again as opportunity arose rapidly.
What those companies have in common is the ability to compress the time required to re-set when the ground beneath them shifts. As global supply chains continue to navigate the bullwhip effect causing price increases, freight capacity challenges, and port congestion, having a global freight management platform that allows for increased visibility and streamlined data sharing has become a critical need.
And, as always, contact ICCG to help provide you with insight and information. Please schedule a complimentary consultation to look over your questions.