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About the Author |
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Stephanie Miles
Senior Vice President, Commercial Services
Amber Road
Stephanie Miles leads Amber Road's global support team for the company's global trade management solutions as well as the on-demand professional services team.
Prior to joining Amber Road, Stephanie ran the supply chain visibility company, BridgePoint, for 7 years as a first tier subsidiary of CSX. While at BridgePoint, she held the positions of Senior Vice President and General Manager, and also served as a Board Member. Stephanie entered the supply chain management industry in 1992, where she held numerous positions including product and project management, and Manager of Government Programs.
She holds a degree in mathematics from Pennsylvania State University. She is a member of the National Defense Transportation Association and the Council of Supply Chain Management Professionals.
For more information, please visit www.amberroad.com.
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Supply Chain Comment
By Stephanie Miles,
Senior Vice President, Commercial Services,
Amber Road
January 22, 2015
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Best Practices for Lean International Supply Chain Operations
Five Ways to get Started in Right-Sizing your Approach to International Supply Chain Management
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Eighty-eight percent of companies have global supply chains today, according to an Aberdeen report. Yet investment in these operations lags behind domestic operations. In order to compete globally, companies must expand their focus to maximize international efficiencies. The results can be dramatic: supply chain leaders achieve annual savings of $17 million compared to industry laggards by streamlining logistics processes and improving their international supply chains using automation technologies.
The results are notable because of the greater cost and complexity of global supply chains. A typical international shipment is nearly twice as costly as a domestic one, and average cycle times are about five times longer. Thus, the benefits of investing in international operations are significant, with a one percent investment in international supply chain efficiency yielding a far greater return than a one percent investment in domestic operations.
Below are five ways to get started in right-sizing your approach to international supply chain management.
Miles Says: |
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| The benefits of investing in international operations are significant, with a one percent investment in international supply chain efficiency yielding a far greater return than a one percent investment in domestic operations. |
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What Do You Say?
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Our Guest Experts |
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1. |
Evaluate your supply chain system, strategy and current technologies
Too often, companies decide to reengineer their operations without assessing where they are now, what goals they hope to achieve with reengineering, and how they will measure their progress and achievement of their goals.
Companies should look to adopt goals and strategies that more tightly integrate their systems and technology. By streamlining and centralizing operations and adopting collaborative, cloud-based technologies, companies have a greater opportunity to ensure all operational goals are in sync.
On the front end, demand fulfillment – synchronizing supply chain operations to the needs of the customer – is a key competitive strategy. Traditional cost and profit models are no longer sufficient to operate in a global, internet speed world. Instead, companies must be able to quickly respond and adapt to the market environment.
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Assess and optimize total landed costs
Determining total landed costs is key to maximizing profits. The lowest-cost vendor is not necessarily the lowest-cost option once transportation costs, trade regulations and duties have been factored in to the equation. In fact, the actual cost of the goods could be much higher than anticipated.
A company should be able to compare total landed costs of using potential and current suppliers for sourcing from and distributing to multiple locations with the most up-to-date data, including assessorial charges, tariffs, regulations and preferential trade agreement sourcing locations.
Test scenarios that enable comparisons of international shipping options should be done on a regular basis. |
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Comply with trade regulations worldwide
Trade regulations and duties have a significant impact on international supply chain operations. These regulations are constantly changing and often involve numerous jurisdictions, formats and languages. Combining information regarding purchasing, logistics and distribution allows for a more complete picture of what a company’s actual international supply chain costs are. Similarly, non-compliance ewith international rules and regulations could lead to fines, revocation of import/export privileges or worse - jail time.
Successful international operations call for the ability to instantly update this information, which requires access to, and understanding of, a myriad of worldwide lists. Any trade regulation changes, which can happen overnight, must be implemented immediately to avoid non-compliance issues.
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Optimize transportation systems and strategy
Transportation management is another key part of a successful international supply chain program. An international move involves more parties, longer lead times, higher base transportation rates and a variety of assessorial charges that are difficult to decipher and calculate. All of these factors affect a company’s ability to route, rate and manage international transportation and associated costs.
Transportation management includes contract and rate management, the ability to compare available routes by date or other criteria needed, carrier selection, booking and carrier management, shipment tracking and managing potential disruptions or delays. Centrally storing this information allows for ready access, enables side-by-side comparison of available routes, and automates booking and associated carrier communications. With real time shipment tracking, status alerts, freight auditing and reporting and performance monitoring, companies can adapt to potential supply chain issues as they occur, as well as mitigate the effect of potential carrier errors. The result is reduced transportation costs, improved on-time deliveries and customer service, and minimized freight expediting costs.
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Adopt a control tower approach
Companies today want to increase their end-to-end supply chain visibility. This visibility, though, is much more than track and trace. Today’s global supply chain requires a high degree of operational readiness and synchronization of end-to-end activities, including integrating the flow of goods, information and money associated with the movement of goods. Best in class companies achieve this visibility using a control tower approach.
A control tower approach is the cornerstone to agility, responsiveness, and visibility. With this approach, companies can reduce inventory, lower total landed costs and decrease cycle times by connecting planning and execution, from raw materials to delivery to the end customer. This end-to-end supply chain connection involves integrating import/export data and information from overseas suppliers, logistics providers, brokers and carriers. Without the big picture, it is nearly impossible to implement cost-saving strategies such as just-in-time inventory replenishment. |
Final Thoughts
Improving an international supply chain requires investment in technology and improving processes. Automating import and export functions, international transportation, supply chain visibility, and free trade agreements allows companies to minimize the time and effort of manual processes and grants easier access to information, quicker response times and reduced errors. Companies that successfully achieve global growth recognize the importance of expending the time, effort, and resources on their international supply chains. |
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