Building Supply Chain Resilience Through Physical and Financial Visibility
It’s safe to say that the supply chain could be categorized as “chaotic” over the last two years.
For many leaders, this is due to circumstances completely outside of their control. And yet, regaining control during chaos appears to be essential: as the world isn’t “returning to normal” anytime soon.
In fact, we at Trax posted in another article that disruption should be considered the “new normal.”
That may be true, but leaders who hope to withstand this or any season of change must build resilience, and there are two ways to do it.
Two Ways to Build Supply Chain Resilience
Josh Bouk, President and Chief Revenue Officer of Trax Technologies, recently wrote on the forum Supply Chain Brain about a dual approach to supply chain resilience. He identified two key areas essential for any growth-minded leader:
- Physical Visibility
- Financial Visibility
Both of these, as we’ll see, are made possible by technology.
1. Physical Visibility in Supply Chain
Logistics executives must find a way to mitigate risk, control cost, and implement the right carrier handling requirements (among other components). This is only achieved through a comprehensive, accurate view of the physical movement of goods along the supply chain.
Josh Bouk urges leaders to reimagine the physical flow visibility. He explains that it is no longer sufficient to know when goods leave a warehouse or arrive at a destination: “Shippers need total visibility of the flow of goods, in order to make rapid and fluid operational decisions. Those that managed to achieve this over the past two years have been the ones that fared the best, reacting in near-real time to disruptions.”
Embracing technology is the key to achieving this agility and avoiding costly, lengthy shifts.
2. Financial Visibility in the Supply Chain
Financial flow visibility is the second area executives must develop to build resilience. Financial data tracking and analysis will answer mission-critical considerations:
- Are rates escalating beyond plan?
- Are partners delivering against contract rates and agreements?
- Are shipments sitting in port, accruing charges?
Many companies are downgrading growth plans due to factors like these, which may feel uncontrollable. And yet, enhanced understanding could be the key to mapping current challenges and making strategic, realistic improvements moving forward.
Josh Bouk explains the tech-based solution: “High-quality data collected across the operation delivers confidence in, and executive support for, the many decisions required to combat challenging market conditions.” The better companies get at organizing, visualizing, and analyzing data, the more visibility will be gained over both physical and financial components of operations.
The Real End Game
The real end game for building these two areas is airtight resilience against external market factors. These factors represent a real threat to the future of businesses in the supply chain. Enacting cost controls and performance-enhancement strategies will yield dividends, and could be the difference between companies that make it… and those that don’t.
Trax Helps You Build Supply Chain Resilience
Global dynamics impact the supply chain. Port closures, shifting air freight routes, gas prices, carrier shortages, price hikes, global inflation, and more should absolutely impact forecasting. Imagine the risk if you didn’t have a clear picture of the physical and financial dynamics that impact your business.
We are in a season of ongoing change, and resilience will be the only way to survive and thrive.
This is built by using tech-enabled purpose-built tools. That is what Trax has.
Trax is the global leader in Transportation Spend Management solutions. We partner with the most global and complex brands to drive meaningful optimizations and savings through industry-leading technology solutions and world-class advisory services. With the largest global footprint spanning North America, Latin America, Asia, and Europe, we enable our clients to have greater control over their transportation performance and spend. Our focus is on your success.