Via LinkedIn : Happy New and Challenging Supply Chain Year. As each of us go through the annual drill of forecasting and budgets, if you do not make change this year, with what is known globally and the risks at large, there is no one else to blame. I did some basic client surveys at the end of the year and my senior colleagues agreed with me, the following are basic and well known as they adapt their 2015 planning and add contingencies in light of the rising costs of freight and inventory.
1–Mistakes will be costly for domestic transportation, air and ocean. Last minute orders, result in paying more bottom line. Unless you have a values driven provider, they will take advantage of the spot market freight rates and in turn what you pay.
2-Non consistent truck lanes are costly.
3-Distribution centers not having a delivery window and off loading in 30 minutes or less, will result in not only higher rates, but fewer alternatives.Drivers need to turn wheels bottom line.
4-Flexible global networks are best as the west coast ports will continue to get worse.(yes,I realize this) However, why are you not driving change?
5-Fragmented purchasing terms and silos inside a company result in paying dearly.
6-Gorilla customers will switch purchasing terms on an ad hoc basis from client pick up when they can not get a truck. Big box stores are doing this now across several accounts. They are highly efficient but can’t keep up with this capacity crunch moving forward.
7– As fsc. continues to decrease CARRIERS will increase their line haul.Carriers got used to the money and are not stupid enough to give it up when the laws of supply and demand apply.
8-Consider the southeast for imports and exports. Slow downs and congestion will be the new normal on the west coast
9-Mexico will continue to grow and our security processes are well beyond CTPAT. Canada has different HOS laws and we manage our NAFTA countries very efficiently. Mexico is the near source alternative as the China due to the costs of the rising middle class becomes less cost efficient when adding the cost of freight and ocean delays.
10-Think really hard about having forward cross docks on a specific basis to combat your freight not getting delivered on time and avoiding retail charge backs. Creativity to combat issues with sales forecasts is the only method of winning. STORMS, delays, and this winter is predicted to continue to drive up freight costs, lessen capacity by region, and result in delays.
My all star supply chain managers are the ones saving millions on inventory while balancing the cost of freight. The freight manager ignoring inventory will be the difference in winners and losers. 2015 WILL BE MORE CHALLENGING THAN 2014.