The continued growth of e-commerce, demand for faster shipping, labor shortages and ongoing supply chain disruptions have pushed organizations to reevaluate their operations. This includes looking into solutions to further automate and streamline supply chain processes, from warehousing and transportation to shipping and handling dangerous goods (DG).
Automation in the supply chain isn’t new, but there’s been accelerated interest in it since the onset of the pandemic. Automation can take many forms, but regardless of the technology chosen, organizations are making it a fast-growing priority. According to Gartner, 50% of supply chain organizations will invest in applications that support artificial intelligence and advanced analytics capabilities by the end of 2024.
As we embark on a new year, it’s the perfect time to evaluate operations and consider applying new solutions to old (and future) supply chain issues, especially when it comes to the shipping and handling of DG.
Why DG Shipping Remains Challenging
Shipping goods of any kind can be challenging. But when they’re classified as “dangerous” or “hazardous,” another layer of complexity must be overcome in order to maintain safe, compliant and efficient supply chain operations.
Thousands of items are classified as DG, and the regulations that govern their transport are constantly evolving. Regulations can also vary based on country, transportation mode and myriad other factors. This lack of regulatory consistency makes it challenging (and often time consuming) to prepare hazmat shipments and ensure they’re compliant with the latest regulations. Ensuring compliance is even more difficult for organizations with multiple locations or business units, which often have different shipping processes and lack consistency across the supply chain.
In addition to a confusing regulatory environment, organizations often face an uphill battle in their approach to compliance. Despite the availability of reliable and affordable DG management tools, many companies still rely heavily (or completely) on manual compliance processes that are overwhelmingly inefficient, highly susceptible to errors and further compound the challenges of shipping hazmat safely.
This outdated and insufficient approach can especially be found in organizations where senior leadership team fails to fully understand or isn’t informed about the direct links between shipping compliance and operational and financial performance. As a result, most of the budget is dedicated to other areas of the supply chain, while DG management is overlooked and often excluded from strategic discussions around organizational automation initiatives and technology investments. Until improved management of DG shipping processes is seen as an operational imperative versus a reluctant requirement, challenges will persist.
The Importance of Automating DG Management
Technology and automation are key to future-proofing DG shipping operations and ensure that this critical, yet often overlooked, part of the supply chain can keep pace with the evolving global supply chain, and supports and doesn’t hinder other organizational automation and digital transformation efforts.
There are dozens of tasks required to put a DG item into transport. Slow, manual compliance processes mean slower fulfillment, deliveries and overall business, especially for businesses constrained by staffing issues. This complex process also means there’s a good chance that significant inefficiencies, errors or delays could occur with one or more supply chain partners.
Automating the DG shipping process can reduce the chance of errors and greatly improve operational efficiency. Investing in the right DG shipping software can set organizations up for automation success and drive impactful supply chain benefits, such as:
Making the Transition to Automation
For supply chain organizations that want to become more automated in their DG processes, it’s not difficult to make the transition. However, it does require the right technology and processes.
Using supply chain technology alone isn’t sufficient to improve DG operations, given most transportation, warehousing, order-management and enterprise resource planning systems aren’t built with the necessary functionality to position hazmat as their main focus. DG pros agree. Twenty-nine percent of those responding to Labelmaster’s survey admit their ERP system doesn’t have the needed DG functionality, and nearly 60% said their WMS doesn’t either.
To make up for this technology gap, organizations should look into investing in dedicated DG shipping software. Not only will this improve the automation process, it will help create a central location for the storage and maintenance of data that can be accessed by all stakeholders. It will also ensure that all parties are working with accurate, up-to-date information without the need to re-enter data or consult multiple interfaces.
With this automation and integration in place, organizations will have taken a critical step toward investing in technology that drives successful supply chain operations and delivers much-needed business value.
The shipping and handling of DG will continue to be challenging, as supply chain complications persist and transport regulations further evolve. Automated DG management technology helps organizations to improve operational efficiency and customer satisfaction, while reducing operating costs and ultimately maintaining supply chain integrity.
Mario Sagastume is vice president of software and customer success for Labelmaster.
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