Anyone who’s ever managed a supply chain knows how fragmented and inefficient the industry can be. The average supply chain has numerous essential handoff points, and individual providers are often resistant to sharing information, creating silos of data and opaque processes. Add in complications like capacity constraints, both real and manufactured; an escalating global trade war; and skyrocketing customer expectations, and many businesses are struggling to manage a dynamic and sometimes chaotic logistics environment.
“My time at the Port of Long Beach was a real eye-opener in terms of how inefficient supply chains tend to be,” AGL CEO Jon Slangerup told the crowd recently during his “Big Idea” presentation at the 2019 NRF conference.
After years at FedEx, which developed track-and-trace technology based on the custodial control of goods, Slangerup says he was struck by the fact that supply chains often don’t have similar control over their data. Creating a single source of truth for all supply chain information is key for gaining visibility, transparency and, ultimately, the agility to react quickly to changing conditions. Technology is key for enabling that control over information, which helps to explain why 72 percent of shippers have plans to digitize their supply chains.
The human side of supply chain
But technology is not enough. Since no two supply chains are alike, it takes a highly customized approach to build solutions around specific organizational needs and goals. Once you go live, supply chains require constant monitoring to ensure data accuracy, resolve issues and identify new opportunities for efficiency – which businesses often don’t have the bandwidth to support. As a result, many organizations with complex supply chains are moving toward a fourth-party logistics, or 4PL, approach. These providers go beyond the typical 3PL relationship to manage the entire supply chain, implementing holistic solutions that drive efficient communication between factories, employees, carriers and other stakeholders.
Regardless of how businesses source their logistics expertise, Slangerup says, here’s why the human touch is a key component of a well-run supply chain.
- Better supply chain mapping. Businesses need to understand their supply chains first before they can drive operational and cost efficiencies. An experienced partner can help identify the key players, modes and handoff points, along with opportunities for improvement.
- Validated, actionable information. Supply chains produce a tremendous amount of data, but what shippers really need is actionable insight. A supply chain expert can help you get from A to B by validating data when needed, since primary sources are often inaccurate.
- Accountable, proactive management. Seventy percent of businesses have experienced a supply chain disruption in the past year, according to the Business Continuity Institute. When problems inevitably crop up, a partner with a deep logistics network can think creatively to help source capacity or adjust route planning.
For businesses just beginning to explore supply chain optimization, the potential upside is great. Case in point: Since partnering with AGL 15 months ago, Slangerup says, one client has trimmed ocean freight costs by 12 percent while simultaneously increasing container volume by 50 percent. The company also slashed processing time in half, allowing it to redeploy logistics-focused employees into more high-value roles.
“The smarts come from interactions with human beings who are experienced, and understand a process for divining all this opportunity,” Slangerup says. “That’s where I think [the real opportunity] lies.”
Interested in hearing more about the high-tech, high-touch supply chain approach from AGL CEO Jon Slangerup? Check out our recording of his full “Big Idea” presentation at NRF.