What trends and changes have happened this month in the supply chain industry? Find out in this month’s edition of the Supply Chain Digest brought to you by Rockfarm Supply Chain Solutions here.
GETTING AHEAD OF THE SLOPE
In a perfect world, inventories are balanced, production lead times are aligned with purchased materials and transportation planning windows are one week in advance allowing for perfect alignment of your shipment to your chosen carrier when and where you want your shipment picked up. The last 7 months has shown that the perfect world we strive for is fraught with factors well out of our control as logistics professionals.
What we can do is get ahead of the slope through a series of steps designed to mitigate risk. The ﬁrst step is to identify risks. The most prevalent risk for shipper supply chains in the coming 4th quarter is freight budgets careening out of control. Identifying the impact of the risks is the second step in developing your risk mitigation strategy. In our example, the risk can include lower operating margins, lower carrier performance due to an expanded carrier base brought on by diminishing truck capacity and additional resource requirements to manage the load planning processes. After identifying and understanding the impact of the risks, prioritization of the risks should be categorized from most to least critical. Lastly, creation of your risk mitigation plan that includes monitoring, communication and implementation of a risk mitigation strategy should a key trigger point be met.
As we have seen in the last nine months, a perfect storm has been brewing and it has created an environment of higher truck rates due to a lack of capacity. The slow roll of this storm began well before truck rates illustrated an upward slope when production halted in Asia and state economies began shutting down.
To learn more about current trends in the world of logistics, download the full September 2020 edition of the Supply Chain Digest below.
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