Suppliers of consumer goods are battling increased transportation costs that are negatively impacting profit margins, according to Environmental Leader. The silver lining, however, is that in the process of mitigating these costs, organizations are drastically improving transportation efficiency.
The website reports that a study from Honeywell found 49 percent of C-level consumer goods executives believe profit margins have been impacted over the last 12 months due to increased transportation costs. However, the study also found that those organizations that performed evaluations of their direct store delivery (DSD) operations are saving an average of $734,000 annually.
The cost savings come from a couple of areas, including fuel, delivery receiving, payment procedures and merchandising. However, an evaluation of DSD is not only cutting costs but also reducing the time it takes to perform essential tasks in various workflow areas. By improving the loading of trucks, delivery of items and check-in procedures, companies could save up to 2.5 hours a day for each DSD route.
The Right Tools to Perform an Analysis
The ability to analyze DSD routes and save time at distribution centers and retail locations requires cutting-edge data collection. Understanding costly and time consuming procedures in the supply chain is done by analyzing real-time information captured by employees on the warehouse floor, at receiving locations and even while merchandise is in transit.
When this information is integrated with existing ERP systems, the result is data that creates a clear and accurate picture of the efficiency of the supply chain - identifying problem areas and highlighting best practices. And the advantages are not only related to analysis.
With automated data collection, employees save time logging data and are able to be more productive. Collection with a barcode scanner instead of pen and paper is also far more accurate and available in real time. These tools make the job easier for the employee while also cutting costs and improving profit margins for the organization.
The Time to Switch is Now
The supply chain is changing constantly. Organizations in the supply chain face a skills gap in the U.S. manufacturing labor force, rising fuel prices, increased government oversight and must also remain conscious of brand reputation as consumers take an increased interest in production and provenance. All of these issues require supply chain managers to take advantage of new tools that can help them adapt and react to changes more quickly.