The Application of Supply Chain Data to Maximize ContinuityDive into analytics, top metrics, and risk management to come out on top

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Supply chain leaders are working to find a viable solution that excels during times of disruption. The COVID-19 pandemic unveiled the weaknesses and opportunities for improvement in the supply chain. Those same investments into new technologies of yesteryear are applicable more now than ever, and those that understand the immense value of data-driven decision making can reap the greatest rewards. Unfortunately, the pandemic drags on, and cracks in current operations will be put to the ultimate stress test. To continuously move forward, shippers need to know what to do with the data and how to track the right information.

Disruption is nothing new to supply chain professionals. Weather-related events occur, and public health scares always seem present. Then, the COVID-19 crisis changed the game. Now, figuring out the best way to manage risk is on the minds of shippers and top supply chain leaders. Moreover, the frequency of major disruptions and risks is increasing, says Craig Guillot of Supply Chain Dive.

To help shippers maximize use of advanced systems through the right metrics and KPIs, this white paper will explore:

• The value of big data analytics and their relationship to supplychain resilience.

• The top metrics that enable continuous improvement ofprocesses.

• The need to leverage systems to create a more responsiveand productive omnichannel supply chain.

JUMP TO A SECTION

» Overview

» I. Big Data Analytics toImprove Supply ChainResilience

» II. Top 10 Metrics to Trackand Manage Risk in theSupply Chain

» III. Omnichannel RiskManagement : OmnichannelIntegration Continues toProve Valuable Thru Crises

» IV. Summary:Comprehensive Applicationof Data and InformedDecision Making MaximizeBusiness Continuity

As the profitability of many organizations is now highly dependent upon an optimally performing supply chain, managers need to move beyond traditional metrics. They must now look to new key performance indicators that can measure their ability to survive and recover from a major disruption.”

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I. Big Data Analytics to Improve Supply Chain Resilience

Supply chains across the globe need a better mousetrap to keep freight spend under control and efficiently manage freight. And, investment statistics reveal an increasing trend for more technology to enable multi-modal shipping and the application of big data analytics to increase scalability, flexibility, and demand-driven management decisions. According to a 2017 survey of supply chain investments, conducted by Gartner and reported by Supply Chain Quarterly, investment in analytics

To continuously improve, shippers need to understand the challenges of managing supply chains without resilience, how analytics build flexibility into the process, and a few tips for the use of analytics to enable resilience.

Challenges of Poor Supply Chain ResilienceThe challenges of poor supply chain resilience contribute to a loss of visibility and poor responsiveness when circumstances change. The recent disruptions to the supply chain reflect the severe shortfalls that may occur when a back-up plan is unavailable. Moreover, failure to enable resilience will inevitably lead to these added problems:

• Higher risk of out-of-stock product.

• Poor visibility into supplier product availability.

• Limited access to more capacity when truckers are unavailable.

JUMP TO A SECTION

» Overview

» I. Big Data Analytics to Improve Supply Chain Resilience

» II. Top 10 Metrics to Track and Manage Risk in the Supply Chain

» III. Omnichannel Risk Management : Omnichannel Integration Continues to Prove Valuable Thru Crises

» IV. Summary: Comprehensive Application of Data and Informed Decision Making Maximize Business Continuity

is expected to grow to $22.8 billion by 2020 as executives become more cognizant of the importance of gaining sustainable value from big data analytical capabilities.”

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• Inability to rapidly change the freight schedule to respond to changes in demand.

• Complete desolation when relying on a single or a few suppliers, especially when those suppliers rest in regions of the world that may be subject to quarantine.

• Lack of insight to optimize routes and avoid risks in real time.

• Poor accountability that derives from limited visibility.

• Increased risk of accounting errors that further add to freight spend.

• Inability to provide information on freight volume and demand to potential new carriers or supply chain partners.

The writing is on the proverbial wall, and shippers continue to face the worsening of the current crisis, notes Transport Topics :

Clearly, the disruption will only exacerbate the problems and exploit the weaknesses in the supply chain, but a strategy to build resilience could help avoid those risks.

JUMP TO A SECTION

» Overview

» I. Big Data Analytics to Improve Supply Chain Resilience

» II. Top 10 Metrics to Track and Manage Risk in the Supply Chain

» III. Omnichannel Risk Management : Omnichannel Integration Continues to Prove Valuable Thru Crises

» IV. Summary: Comprehensive Application of Data and Informed Decision Making Maximize Business Continuity

All over the world, drivers hauling goods across or between nations are running into locally enforced rules aimed at locking down the wider population to stop the virus from spreading.”

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JUMP TO A SECTION

» Overview

» I. Big Data Analytics to Improve Supply Chain Resilience

» II. Top 10 Metrics to Track and Manage Risk in the Supply Chain

» III. Omnichannel Risk Management : Omnichannel Integration Continues to Prove Valuable Thru Crises

» IV. Summary: Comprehensive Application of Data and Informed Decision Making Maximize Business Continuity

Big Data Analytics Build Flexibility Into Decision MakingThe crux of poor supply chain resilience lies in limited visibility, so more visibility will amount to better informed decision making. Through added visibility into traditionally overlooked processes via big data analytics, shippers know what is and is not appropriate. Instead of basing decisions on assumption, analytics provide the hard facts and costs for all inefficiencies. They are the ultimate solution to an ever-evolving supply chain.

Since big data analytics provide more insight, shippers also have the advantage when making critical decisions, but their implications are broader than that. Descriptive analytics provide insight into what happened. Predictive analytics provide insight into what will happen. Prescriptive analytics reveal what needs to happen to reach that goal. It is a continuously moving process from past through future, and shippers that realize the potential of analytics can future-proof their supply chains. That is the base definition of resilience—enabling business continuity despite the challenges that may arise. So, analytics are the precursor to supply chain resilience.

How to Apply Analytics to Improve Supply Chain ResponsivenessShippers should follow these steps to reap the greatest gains from integrated supply chain planning and system use:

It’s easy to claim analytics need to be deployed, but what other steps can shippers take to improve use of analytics to enable responsiveness and success throughout times of disruption? The following list contains the best practices in applying analytics to improve responsiveness and create a self-propagating cycle of application of analytics and their effect on supply chain resilience.

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JUMP TO A SECTION

» Overview

» I. Big Data Analytics to Improve Supply Chain Resilience

» II. Top 10 Metrics to Track and Manage Risk in the Supply Chain

» III. Omnichannel Risk Management : Omnichannel Integration Continues to Prove Valuable Thru Crises

» IV. Summary: Comprehensive Application of Data and Informed Decision Making Maximize Business Continuity

Upgrade to a cloud-based TMS that includes available big data analytics modules

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Create and track the right freight management metrics.3

Deploy data collection and analysis across whole supply chains—including brick-and-mortar POS systems.

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Onboard carriers seamlessly with EDI and APIs to reduce delays.

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Leverage cloud-computing to process data faster and gain insights around the clock.

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Share insights with relevant supply chain partners.6

Use portals to put carriers in the “driver seat” of scheduling and more.

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Hold partners accountable for their actions.8

Measure performance again.9

Validate results from improvements.10

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II. Top 10 Metrics to Track and Manage Risk in the Supply Chain

Under the current COVID-19 global pandemic, managing risk in the supply chain has taken on a renewed importance. Procurement teams continue to struggle with finding available suppliers and shipping capacity to enable supply chain responsiveness. According to the Harvard Business Review

The vital information in question has another name— logistics metrics that enable better management of risk in the supply chain . Shippers need to understand the top metrics to track and manage risk through the current and future disruptions. Obviously, it’s a broad range, so let’s start with the top five.

JUMP TO A SECTION

» Overview

» I. Big Data Analytics to Improve Supply Chain Resilience

» II. Top 10 Metrics to Track and Manage Risk in the Supply Chain

» III. Omnichannel Risk Management : Omnichannel Integration Continues to Prove Valuable Thru Crises

» IV. Summary: Comprehensive Application of Data and Informed Decision Making Maximize Business Continuity

Recognize opportunities to improve the process for the next round of disruptions, taking stock of lessons learned.

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Let the data prove analytics’ value through the good times and the bad.

12

Repeat.13

vital information is often not available or accessible across their global teams. As a result, their response to the disruption has been reactive and uncoordinated, and the impact of the crisis is hitting many of their companies full force.”

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1. General Carrier Performance Amid Risk in the Supply ChainThe first metric is really a combination of multiple metrics that form the carrier performance scorecard. Carrier adherence to on-time delivery, carrier delays, average length of delays, and total carrier costs averaged per shipment are essential metrics to maintaining a positive relationship throughout disruption.

2. Percent of Carriers With Lower-Than-Average Capacity Following DisruptionMaintaining adequate control over inventory remains a problem for modern supply-chain managers. When risks materialize, inventory may be subject to instances of panic buying, a run on necessities, and other external factors. As a result, more companies reorder products to make up for demand. Carriers will experience a decline in available capacity due to increased volume of total freight shipped. However, prolonged disruptions, such as the novel coronavirus disruption, will inevitably cause a demand shock, leading to a drastic reduction in available shipped rate and higher rates. At the onset of any crisis, supply chain leaders must begin tracking the percent of carriers with declines in available capacity to stay informed of the overall health of carrier performance.

3. Percent of Carriers With Available, Mode-Specific CapacityIs not enough to simply track carriers affected by limited capacity during disruption. Shippers must track the percent of carriers with available capacity across specific modes. Remember that understanding availability of capacity within modes is essential to taking advantage of multi-model transportation options and alleviating higher freight rates. While preliminary reports regarding the performance of the industry for April 2020 are still in the works, the severe disruptions within the industry alludes to a sudden spike on truckload freight rates.

JUMP TO A SECTION

» Overview

» I. Big Data Analytics to Improve Supply Chain Resilience

» II. Top 10 Metrics to Track and Manage Risk in the Supply Chain

» III. Omnichannel Risk Management : Omnichannel Integration Continues to Prove Valuable Thru Crises

» IV. Summary: Comprehensive Application of Data and Informed Decision Making Maximize Business Continuity

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JUMP TO A SECTION

» Overview

» I. Big Data Analytics to Improve Supply Chain Resilience

» II. Top 10 Metrics to Track and Manage Risk in the Supply Chain

» III. Omnichannel Risk Management : Omnichannel Integration Continues to Prove Valuable Thru Crises

» IV. Summary: Comprehensive Application of Data and Informed Decision Making Maximize Business Continuity

4. Total Cost in USD for Inability to Procure SuppliesAnother critical metric to track in managing risk in the supply chain is the total landed cost for all procurement processes. During disruption, total landed costs will increase as more activities may be necessary to secure supplies. It is a simple concept; more work on the part of individual shippers and carriers to move freight and meet the demands of disruption will inevitably lead to higher labor costs.

5.Number of Available Backup Suppliers for Fastest-Moving Products

Suppliers will also see a change in the fastest-moving SKUs. Take the example of cleaning supplies under the current situation. As SKUs began to fly off shelves, shippers had to immediately look for alternative suppliers. Tracking the total number of alternate suppliers with available product for fastest-moving items is a critical component of a successful risk management and mitigation strategy. Moreover, shippers should also track the difference in cost per SKU when working with a given supplier, changes in the shipping timeline, and opportunities to avoid unnecessary expenses in the shipping thereof.

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JUMP TO A SECTION

» Overview

» I. Big Data Analytics to Improve Supply Chain Resilience

» II. Top 10 Metrics to Track and Manage Risk in the Supply Chain

» III. Omnichannel Risk Management : Omnichannel Integration Continues to Prove Valuable Thru Crises

» IV. Summary: Comprehensive Application of Data and Informed Decision Making Maximize Business Continuity

6. Percent Compliance With the Inbound Freight Routing GuideMaintaining compliance with the inbound freight routing guide should be a year-round metric, and its importance grows during times of disruption. Failure to comply with the inbound freight routing guide will lead to added detention charges and longer dwell times for truckers at your facilities. Furthermore, shippers lose control over the inbound freight process when the workflows and rule sets within the routing guide go out the proverbial window. As a result, shippers should maintain a specific metric on the percent compliance for all carriers with the inbound routing guide, as well as the percent of compliance for each carrier, supplier, or other vendor engaging in the supply chain. As compliance moves further away from 100%, shippers should begin to enforce penalties, including refusal to pay assessed charges, to combat the problem and ensure smooth freight management.

7. Total Revenue Lost During Current DisruptionWhile it is disheartening to track the total lost revenue deriving from a disruption, it is essential. Recognizing the fiscal impact of a disruption provides a founding stone for building the business case for better, more efficient risk management strategies and transportation management capabilities to prevent future disruption in your supply chain. Also, it is easier to quantify this cost in terms of total lost revenue on average by carrier, customer, and other supply chain partner.

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JUMP TO A SECTION

» Overview

» I. Big Data Analytics to Improve Supply Chain Resilience

» II. Top 10 Metrics to Track and Manage Risk in the Supply Chain

» III. Building the Business Case for TMS Integration Amid Uncertainty

» IV. Summary: Comprehensive Application of Data and Informed Decision Making Maximize Business Continuity

8. Percentage of Unrelated Risks Coming to Maturity During Another CrisisProactively managing unrelated risks as during a major disruption is a highly subjective task. Supply chain leaders already have their plates full, and they must also consider the likelihood of other risks impacting the supply chain during a current disruption.

For example, continuance of the disruptions of COVID 19 could conceivably continue into hurricane season. The forecast for the upcoming 2020 hurricane season indicates a minimum of four major storms and more than a dozen named tropical storms.

As a result, companies should review all available data for other risks, such as mergers and acquisitions, whether -related risks, political changes, and global trade disruptions for a possible percentage of impact to current operations based on the most available data. The exact criteria for calculating this metric will also vary by facility. Thus, it is best to approach it by assigning a risk index value to each possible risk, such as impact from a hurricane’s landfall to your current facility. As the forecast shrinks, shippers should intervene and take proactive steps to protect against the effects of these risks, and in retrospect, understanding the percent of risks that did come to fruition during another disruption will help supply chains identify their weaknesses and opportunities for improvement.

9. Percent of Accounts Receivables That Have Yet to Be Paid During the CrisisFinancial matters will come under the microscope during the crisis. Shippers should track the total number of late or missing payments within the accounting department that occur during a disruption. This metric provides insight into whether carriers are properly reimbursing your company for possible freight claims filings, the reversible of detention time charges, and more. In addition, keeping this data intact may be necessary to gain access to available funding under relief legislation.

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JUMP TO A SECTION

» Overview

» I. Big Data Analytics to Improve Supply Chain Resilience

» II. Top 10 Metrics to Track and Manage Risk in the Supply Chain

» III. Omnichannel Risk Management : Omnichannel Integration Continues to Prove Valuable Thru Crises

» IV. Summary: Comprehensive Application of Data and Informed Decision Making Maximize Business Continuity

10. Percent of Accounts Receivables That Have Yet to Be Paid During the CrisisFinally, the tenth most important metric to manage risk in the supply chain metric surrounds dwell time again. It is possible for dwell time to be assessed as a result of the failures of other companies. For instance, tracker a arrives two hours late, causing a cascading delay in the dock schedule. All subsequent drivers then begin to charge added fees for dwell time. These costs all traced back to the original problem, which was the first trucker’s late arrival. Shippers can manage risk in the supply chain by isolating the original cause of all dwell time charges for a given duration and assessing those charges back to the original cause or carrier. It sounds harsh, but tracking these metrics will help isolate causes of higher costs from dwell time, as well as improve shipper and carrier relationships too.

III. Omnichannel Risk Management : Omnichannel Integration Continues to Prove Valuable Thru Crises

Organizations, particularly resellers, spent years building the best omnichannel capabilities on the planet. As trucking jobs rise to become the saviors of higher demand during disruption, the economy still suffers. This is an unforeseen era that upended all prior expectations. All signs indicated the future was based on the channel capabilities, creating a seamless shopping experience from brick-and-mortar stores through e-commerce. However, the disruptions caused by COVID-19 triggered a sudden fear of loss and poor omnichannel risk management . During the initial creation of this blog, that was the idea. Now, omnichannel is more important than ever as organizations and governments look to radically and swiftly reopen nonessential businesses, provided they can offer curbside services and contactless options. Let’s take a closer look at the state of omnichannel risk management strategies in response to the disruption and how omnichannel integration continues to prove valuable throughout crises.

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JUMP TO A SECTION

» Overview

» I. Big Data Analytics to Improve Supply Chain Resilience

» II. Top 10 Metrics to Track and Manage Risk in the Supply Chain

» III. Omnichannel Risk Management : Omnichannel Integration Continues to Prove Valuable Thru Crises

» IV. Summary: Comprehensive Application of Data and Informed Decision Making Maximize Business Continuity

Did Retailers Get Something Wrong With Omnichannel Risk ManagementRetailers that felt the tensions of competition started massive overhauls of supply chain processes and the ability to offer omnichannel experiences years ago. According to a 2017 Harvard Business Review article,

That’s right. Omnichannel might have been an obsolescent business model, and when initial stay-at-home orders were enacted, omnichannel was replaced with nothing. Businesses suddenly found themselves in an essential versus nonessential mindset. While most businesses would like to think their services and products are essential, it boils down to a level of necessity. For companies that sold groceries, pet supplies, and similar essential products, the business model changed to reflect a safe distancing environment. As the country moved weeks into the COVID-19 crisis, unrest resulted in the form of protests across the country. Governments are working on plans to reopen the economy, and in some states, nonessential businesses can return to work if they can offer a curbside or delivery option.

Retail sales through digital channels (including mobile sales) increased by a massive 23% in 2015. Much of these gains have gone to online retailers. Amazon is the biggest beneficiary, now accounting for 26% of all online retail sales. What is more, as it continues to expand aggressively into new categories like grocery and fashion, Amazon’s existential threat to traditional retailers is greater than ever. Just ask Alexa.”

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JUMP TO A SECTION

» Overview

» I. Big Data Analytics to Improve Supply Chain Resilience

» II. Top 10 Metrics to Track and Manage Risk in the Supply Chain

» III. Omnichannel Risk Management : Omnichannel Integration Continues to Prove Valuable Thru Crises

» IV. Summary: Comprehensive Application of Data and Informed Decision Making Maximize Business Continuity

Omnichannel Strategies Are Ideal for Difficult EnvironmentsWhen the current disruption began, nonessential businesses were forced to immediately furlough workers and hope for the best. Then, the solution arose by leveraging the facts to support continued operation. These facts point to the ability to maintain safe distancing measures and enable remote workers to work. In such fashion, major retailers made the successful jump to embrace lackluster omnichannel order fulfillment under a pseudonym. In fact, what does omnichannel fulfillment really mean? Put simply, omnichannel fulfillment refers to the ability to give customers an online buying experience and eliminate the need to visit a brick-and-mortar store.

Okay. That’s the basic premise of all e-commerce transactions, but it becomes omnichannel when customers develop the willingness to visit brick-and-mortar stores to pick up their orders instead of delivery. It is important to note that this is not the same as a by online pick up in-store (BOPIS) option. Instead, it is more of a buy online and pick up outside of the store fulfillment model. Contact between consumers declines. Retailers see the benefits of continued success and profitability, and everyone wins. In fact, USA Today reported that several major retailers that did not fit the essential criteria would begin offering curbside pickup options to curb the effects of the novel coronavirus. Such companies include Kohls, Best Buy and Dick’s Sporting Goods.

As a result, omnichannel took on a new form— omnichannel risk management —allowing for business continuity despite disruptions. In this circumstance, omnichannel was not the consumers’ preference, but it was the solution.

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JUMP TO A SECTION

» Overview

» I. Big Data Analytics to Improve Supply Chain Resilience

» II. Top 10 Metrics to Track and Manage Risk in the Supply Chain

» III. Omnichannel Risk Management : Omnichannel Integration Continues to Prove Valuable Thru Crises

» IV. Summary: Comprehensive Application of Data and Informed Decision Making Maximize Business Continuity

What Should Businesses Do NowThat’s a tricky question. E0commerce soared 52% year over year in the U.S. and Canada from March 22 through April 4, 2020, reports Digital Commerce 360. Such gains are indicative of a new value in omnichannel. Regardless what official orders say, consumers took note and took to the internet. Delivery and curbside are up across all industries. There has never been a similar surge in demand. For businesses, these added revenues might keep the lights on for now, but they are rapidly on the way to becoming the new normal.

I’m not predicting that the industry will stay closed for long, but if the coronavirus does return, the measures taken to offer curbside will enable business continuity. So, what are the next steps? Shippers need to improve their fulfillment capabilities, including gaining more insight into demand forecasting, leveraging data and automation to speed replenishment, using connected systems, such as an integrated TMS , to recognize when problems might arise, and continuously applying data to improve operations throughout the supply chain.

IV. Summary: Comprehensive Application of Data and Informed Decision Making Maximize Business Continuity

Leaders must clearly define and communicate an organization’s risk tolerance. Risk mitigation often has an associated incremental cost, and so it is important to align on which risks need to be mitigated and which can be borne by the organization. An organization’s culture should also allow for warning signs of both internal and external risks to be openly shared.”

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JUMP TO A SECTION

» Overview

» I. Big Data Analytics to Improve Supply Chain Resilience

» II. Top 10 Metrics to Track and Manage Risk in the Supply Chain

» III. Omnichannel Risk Management : Omnichannel Integration Continues to Prove Valuable Thru Crises

» IV. Summary: Comprehensive Application of Data and Informed Decision Making Maximize Business Continuity

Disruption is hard on all businesses. Unlike the disruptions of the past, this disruption triggered a faster evolution and deployment of omnichannel capabilities. Companies that already invested in omnichannel were in the best position to scale it to meet demand. Those that withheld upgrades struggled to stay afloat, and the casualties of economic fallout are mounting. Meanwhile, data in its raw form remains meaningless, and disparate TMS solutions offer little insight. However, the culmination of advanced TMS functions and big data analytics open the door to continued scalability, flexibility, consistency, and data-driven decision making.

In addition and according to McKinsey & Company, Clearly, the best path forward lies in the continuous evaluation of both internal and external factors that may contribute to the next big disruption.

Shippers that have not yet invested in analytics need to start thinking about how to increase resilience now—before their competitors do. Also, investment can be realized more easily through a TMS that includes analytics-driven functionalities, such as reporting and performance metrics, including those listed above, to monitor and improve operational excellence.

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JUMP TO A SECTION

» Overview

» I. Integrated Supply Chain Planning : Connectivity Enables Responsiveness

» II. How to Build a Better Shipping Mousetrap With a SaaS TMS Functions

» III. Building the Business Case for TMS Integration Amid Uncertainty

» IV. Summary: A Connectivity-First, Unified TMS Must Be Your Goal

During a time of crisis, employees need data to make informed decisions, and sharing of information forms a critical step in successful mitigation of risk in the supply chain . There is not a one-size-fits-all approach to metrics to manage risk during disruption. For companies that do not act now to offer easy, accessible, and affordable curbside service—the fundamentals of omnichannel—their fate will be similar. Do not take that chance. Bring your systems into harmony with the omnichannel supply chain—it will save your business through this disruption and the next.

About Cerasis

At Cerasis, we believe you should be able to source dependable carriers without spending too much time and money, and easily provide reports to your leaders. That’s why we’ve helped thousands of shippers with over the road transportation management technology and services for over two decades.

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