5 Ways Partial Truckload Companies Can Improve Its Supply Chain
Posted by Fernando Correa ● Apr 18, 2023 1:08:38 PM
The American trucking industry moves more than 10 billion tons of freight annually, making it a crucial link in the national supply chain. Yet, many truckload companies do not fully understand their supply chains, which are vulnerable to factors like global crises and weather conditions.
As a partial truckload (PTL) company, it’s vital to understand your supply chain to ensure agility and build future-proof processes. Getting better insights and visibility into your supply chain can help avoid bottlenecks like material shortages, increased freight costs, port congestion, etc.
5 Key Points of Supply Chain Management and Improvement
Today’s shipping industry is quite competitive; winners are those with the most efficient supply chain processes. This post will help you understand your supply chain better to ensure customer satisfaction, timely deliveries, efficiency, and streamlined processes.
1. Evaluate Your Current Supply Chain
A concrete supply chain process merges multiple processes and functions to deliver a proactive system that reflects your needs and drives performance. Regardless of your setup, supply chains are imperfect and will likely fail, leading to delays and cost implications.
Consequently, conducting an in-depth supply chain evaluation is vital to identify improvement areas and fix pain points. The best approach is to use the Supply Chain Operations Reference (SCOR) Model, which evaluates your supply chain for effectiveness and efficiency.
The SCOR model standardizes your processes and offers measurable ways to track results against your goals while focusing on five key areas: plan, source, make, deliver, and return. You should also pay particular attention to critical supply chain metrics, including:
- Perfect order index: This metric shows the number of shipments you make without any incidents, such as delays, damage, or inaccurate details
- Cash-to-cash time: This is the time it takes for your company to convert inventory into cash -- the faster, the better for your cash flow.
- Supply chain cycle time: This is how long your company takes to complete orders that customers place when you have no inventory.
- Fill rate: This is the number of customer orders your current stock can fulfill without failed shipments or backorders.
- Inventory turnover: You must know the number of times you sell or ship your inventory in any given period.
Evaluating your supply chain based on these metrics will help you make improvements that will impact your business the most. Supply chains are naturally unpredictable, so you need to design yours to align with customer expectations, be action-driven, and be agile.
2. Audit Suppliers and Distributors Regularly
Your business relies on suppliers and distributors to fulfill certain parts of the supply chain. Their inability or inefficiency can impact your processes and reputation. As a result, it’s vital to audit them to know their quality controls, tool verification procedures, and equipment maintenance.
Auditing helps identify repeated problems, track your suppliers’ performance, and highlight potential challenges while ensuring continuous quality improvement. More importantly, you’ll ensure distributors and suppliers comply with your standards and requirements.
For example, in 1999, NASA lost a $125m satellite after a team in the project used imperial measurements instead of metric measurements. This is a typical example of what can happen if your team and suppliers are not on the same page.
3. Regularly Review Inventory Levels
Inventory is the lifeline of your trucking company, and it’s subject to supply and demand dynamics. Overstocking or understocking certain products has cost implications. Hence, it’s advisable to have an inventory review system to ensure healthy stock levels.
You can have a periodic or continuous review system depending on your inventory type. In a periodic system, you review your inventory after a specific time- every three days, two weeks, or one month. Continuous review constantly tracks your inventory in real time.
Regardless of your review system, it’s advisable to use an inventory tracking method that simplifies your experience and offers better visibility into your stock levels. You can use spreadsheets, accounting systems, software, card, or custom solutions.
4. Streamline Communication Between All Parties
Effective communication and collaboration across all relevant parties is vital for a seamless supply chain process. Your internal team should be on the same page with suppliers and distributors to minimize errors, downtimes, delays, and confusion.
Investing in the right solution can simplify communication between different parties. For example, Cargobot Pool allows sales, logistics, and transportation planning departments to communicate and collaborate easily, improving efficiency and streamlining processes.
Whether you deal in materials, parts, or finished products, shipment details like customer contact information, destination, amount, etc., should be clear and accurate. Ideally, improved communication will result in greater efficiency, faster trucking, and fewer returns.
5. Improve Efficiency and Reduce Costs
Inefficiencies like underutilized trailer space and delivery delays increase your overall trucking and freight costs. Plus, about 1 in every four shippers have to remanufacture and reship goods due to product damages caused by trucking inefficiencies.
Instead, you need to improve the efficiency of your trucking processes by automating tasks, upgrading your technology, updating customers regularly, improving communications, and ensuring perfect deliveries. Planning and optimizing your routes also helps improve efficiency.
More importantly, if you have a large fleet, you must measure your productivity by tracking fuel consumption, service hours, compliance, cost per trip, idle hours, and driver safety. Taking care of these factors can streamline your trucking operations, improving delivery and cutting costs.
Tools for Better Managing Your Supply Chain
Errors and inefficiencies cost partial truckload companies lots of money every month. As a result, it’s wise to leverage different tools and techniques to simplify your operations, avoid pitfalls, and get better visibility into your supply chain. Here are the tools you must have:
Efficient warehouse management can improve your supply chain performance. You need to be able to handle complex logistics tasks involved in route planning, cycle counting, product tracking, inventory monitoring, etc.
Warehouse management tools like Logix Platform, Fishbowl, and SphereWMS can simplify your operations. They help to streamline and optimize warehousing, accounting, and transshipping by providing real-time information on inventory quantity, history, location, and status.
As noted before, the supply chain is subject to market dynamics, but you can use past trends to make predictions and forecasts. This is where analytical tools are helpful, allowing you to use past data and performance to make demand forecasts and anticipate customers’ needs.
Great examples of forecasting tools include Logility Solutions, Streamline, and SAP Integrated Business Planning. With such tools, you can manage complex global supply chain changes, seize new market opportunities, and respond to changing market dynamics.
Giving your customers real-time status updates on their shipments is vital to delivering a great customer experience. Such information is crucial for customers in planning their deliveries and production, eliminating confusion in order location and arrival.
Examples of exceptional tracking software solutions include ShipHawk, Orderhive, FreightPOP, and ShipStation. Some of these tools offer a comprehensive solution for managing warehouses, dispatch, orders, shipments, carriers, etc.
The success of any partial truckload company depends on its fleet management, which directly impacts trucking performance and shipment deliveries. For instance, poor vehicle maintenance, route planning, and fuel planning can lead to delays and even product spoilage.
With fleet management tools like Fleetio, Whip Around, Samsara, and AUTOsist, you can easily stay on top of your operations, making your supply chain processes efficient and reducing operational costs.
Digital Freight Solutions
In today’s digital age, technology has become the foundation for reliable business growth, offering solutions for almost anything. With digital freight solutions, you can find shippers and carriers and connect your departments for an efficient supply chain process.
For example, Cargobot offers digital freight solutions like Cargobot Pool, Zilla Freight, and Cargobot Saas. Such solutions allow you to minimize disruption, seize new opportunities, and automate your supply chain.
Harness the Benefits of Cargobot Pool
The success of PTL transport companies hinges on effectively managing their supply chains. Yet, several challenges impact today’s inland freight system, including traffic congestion, capacity shortfalls, unpredictable weather, etc.
Overcoming these challenges involves analyzing your supply chain to understand your needs and processes. Pay attention to the type of products you deal in and their freight rates, as they impact your supply chain performance, hence delivery and arrival times.
Thanks to Cargobot Pool, you can use a digital freight solution to overhaul your supply chain processes for the better. Whether you ship dry or refrigerated freight, this solution optimizes your transport process by consolidating loads from different shippers to save costs and improve delivery times.
It offers a platform for carriers and shippers to partner and share shipping space, making it an excellent solution for PTL shipments. Cargobot Pool allows you to leverage optimized routes to move more loads, enjoy lower partial truckload freight rates, and save time.
If you want to improve your supply chain, use our digital solutions to enhance collaboration and communication, partner with shippers, and streamline your operations. Contact us today to find out how we can help you.
More Resources to Explore:
- How to Choose the Best PTL Transport Solutions Partner
- 5 Ways Partial Truckload Companies Can Improve Their Supply Chain
- 5 of the Biggest Headaches Facing PTL Shipping This Year
- How PTL Shipping Companies Can Keep up w/ the Latest Technology Solutions & Demands
- 5 Ways Refrigerated Trucking Companies Can Keep Up w/ Industry Demands
Topics: Cargobot Pool