7 Inefficiencies That Could Be Slowing Down Your Supply Chain

An efficient supply chain is one that meets customer expectations in a cost-effective manner. With two-day delivery (or less) becoming the retail standard for customers, balancing cost and customer service is no small feat. According to the GMT 2018 Brand Shipping Policies and Execution Research Study, 58% of consumers seek same-day shipping. Meanwhile, 48 of the 54 retail respondents offered some form of free shipping.

Unfortunately, reducing shipping costs and increasing delivery speed seem to be at odds with one another. And while it’s easy to blame the struggle on carriers who annually raise costs without improving commitment times, highly effective shippers are looking internally for cost reduction opportunities.

How? Over 90% of Benchmark respondents’ parcel volume was shipped either via FedEx or UPS. As a result, an efficiency battle for a competitive edge is being fought through the fulfillment network. Little can be done to improve cost or efficiency once a shipper hands off an order to a carrier.

To identify inefficiencies, take a step back and evaluate the system as one entity. Lean Process Improvement identifies seven wastes: defects, over processing, over production, movement, transportation, work in progress, and waiting. These can be roughly translated into symptoms of an inefficient parcel network.

Any efficiency analysis or optimization initiative requires a comprehensive view of a shipper’s supply chain. As customer expectations rise, accurate and accessible parcel data is invaluable to shippers. Remaining in the dark about a network’s volume distributions or contract impacts is not on option for retailers wishing to gain a competitive edge.

Ensuring your supply chain is interconnected and running smoothly requires taking a few steps back to evaluate the whole network and focus on opportunities.