As globalization simultaneously increases the economic integration and interdependence of countries, companies find themselves with a slew of new challenges as they enter the strange new world of international commerce. The challenge of receiving accurate supply chain data from a disparate group of trading partners was identified by 44% of all survey respondents as the biggest challenge companies face when trying to improve the processes around international transportation management. Furthermore, while Best-in-Class companies coincide with Industry Average and Laggard companies that rising logistics costs are a top business pressure, Best-in-Class companies view rising costs in their proper context, with 42% citing the pressure to increase awareness of the cost and service impact of transportation on overall supply chain performance as a top pressure. By improving visibility to international shipments, Best-in-Class companies hope to align various parts of the organization and reduce international transportation costs.
"Companies often fall victim to thinking that they can have a greater measure of control over international shipments than is really feasible today," explains Ian Hobkirk, Aberdeen's Senior Analyst for Supply Chain Execution. "While it is possible to achieve a measure of performance improvement through service level agreements and 'strong-arming' carriers and suppliers, there are limits to this strategy. Weather events, customs delays, and bottlenecks at logistics hubs make unforeseen delays inevitable. Best-in-Class companies recognize this reality, and have adopted a strategy of agility and responsiveness in order to still meet their supply chain goals."
The report highlights how Best-in-Class companies excel by adopting capabilities like strategic bid allocation, dynamic hub routing, and divert-in-transit as strategic supply chain weapons. Examples from companies like Kraft Foods and Del Monte highlight real-life examples of how companies have implemented these strategies.
The research educates readers on how to sufficiently contain the key metrics of international freight spend, international contracted freight rates, and high levels of on-time inbound international shipments by blending tactical processes and data quality initiatives.
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