7 INEFFICIENCIES THAT COULD BE SLOWING DOWN YOUR SUPPLY CHAIN
n 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
24 PARCELindustry.com MAY-JUNE 2019
BY JESSICA WURST 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. Internal Diagnosis — Wait, We’re Inefficient? 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. 1. Defects: Internal operational errors resulting in incorrectly shipped packages. Ask yourself: Are you getting slammed with address corrections? Are packages shipped at the correct service level? Recommendation: Blame the system. Well-established fulfillment processes are essential for an efficient shipping network. Unfortunately, the more steps involved in the process, the greater opportunity for error. Evaluate each step in the process where defects could occur. Include the transportation management system (TMS), packaging and labeling procedures, and the customer interface. Are these systems protected against human errors?
PARCEL May/June 2019