Can't see what's going on in your small package supply chain? Open up your eyes with these helpful steps.
Managing a lean, efficient supply chain today involves plenty of challenges, from optimizing manufacturing schedules and reducing inventory costs to expediting customs, speeding cash flow and improving customer service.
I wouldn't suggest trying it with one arm tied behind your back — or with both eyes closed. But that's essentially what you're doing if you try to run a small package supply chain without real visibility into the process.
Greater visibility enables more proactive supply chain management, allowing businesses to improve efficiency, better manage costs and inventory, and enhance customer relationships. In many cases, it allows managers to identify small problems and to correct them before they become big ones.
Information technology investments leading to improved information visibility and adoption of just-in-time (JIT) processes have led to significant supply chain enhancements. Over the past decade, the result has been a 34 percent reduction in the ratio of inventory to sales, a $4.6 trillion reduction in total business inventories and a 10 percent improvement in cash cycle times (Source: U.S. Statistical Abstracts; U.S. Dept. of Commerce; Cass and ProLogics State of Logistics Report — 2002).
Effective small package supply chain management requires precise management of the three flows of commerce — goods, information and funds. As supply chains become more complex, the flow of information about a shipment has become nearly as important as the shipment itself, and is critical to synchronizing the flows of goods and funds.
Supply chain visibility — the ability to capture and leverage that information — has come a very long way in a very short time. Marty Peters, who began work as a UPS driver in Detroit in 1946, remembers the advent of the ballpoint pen as a momentous change in the way he did his job; drivers no longer had to carry pocketknives to sharpen the pencils they used to manually log pickups and deliveries. But drivers still kept hand-written records, and accessing those records required that a clerk search through a file cabinet.
Today, drivers who work at Peters' package center carry sophisticated wireless devices called DIADs (for delivery information acquisition device) that scan computer-generated labels on packages they pick up and wirelessly beam information about the shipment to the world's largest DB2 database. As a package speeds through the delivery network, it's scanned numerous times by high-tech wireless optical scanners mounted above highly automated conveyor belts, or on the wrists of employees. This helps to guide the package's journey from trucks to cargo jets to whirring conveyor belts and back to trucks — until the recipient signs the DIAD carried by another driver in another city, and even more information, including that digitally-captured signature, is beamed to the database.
As a result, there's a virtual tidal wave of digital real-time information available regarding goods moving around the world. That information is powerful, but it isn't helping you manage your supply chain by sitting on a computer server somewhere. The challenge is accessing the particular information that's important to you in a way that it can offer the maximum benefit for you and your customers.
The good news is that a number of Internet-enabled visibility tools are available to help you connect with and leverage specific information about your shipment. The broad range of visibility tools available means there are likely one or more that suit the particular needs of your company very well, whether you manage your supply chain and your own fleet of trucks, or you contract out your entire supply chain to a 3PL. What's more, some are available at no charge as value-added services.