As we approach 2025, the logistics industry faces unprecedented challenges and opportunities. In a recent interview, TranzAct's Co-Founder Mike Regan offered advice for what priorities to set in order to navigate changes and improve your supply chain performance.
Here are a few highlights.
Moving from assumptions to analytics
Is your supply chain based on facts or assumptions?
In the last several years, there has been increasing volatility and variability affecting supply chains. This makes it more important to have a solid fact-based understanding of your supply chain rather than relying on assumptions.
While companies can't reduce the number or external events, they can increase their visibility in order to move from guessing to knowing.
Data analytics has become a pivotal tool for gaining greater visibility into supply chain operations.
Whether it's using a high quality freight audit and payment system or a Transportation Management System that get your team on the same page, it's important to have a system that collects the right data and makes it easy to access.
An accurate and accessible view is key for managing a supply chain well and for objectives such as identifying bottlenecks and inefficiencies that may not be immediately apparent.
Building Agile Supply Chains/ Reducing Waste
In the face of global uncertainties and disruptions, building agile supply chains has never been more important. This is important for both responding quickly to changes in order to prevent disruption and to reduce waste on an ongoing basis.
In the interview, Regan noted that if you take away one thing, it's that “Carriers are using pricing to say that we’re not going to allow your waste free of charge.” This means that shippers should focus on internal changes in order to reduce rates or prevent them from escalating.
“Carriers are using pricing to say that we’re not going to allow your waste free of charge.”
One area where it will be important for shippers to adapt to change is LTL shipping. The NMFC changes set to roll out in 2025 could cause many companies to change the way they package or ship freight based on how their freight class might change.
Another area that requires shippers to stay ahead of changes is parcel shipping. As parcel carriers look to improve their performance, this mean rate increases and new accessorial charges that can be difficult to track. Analytics provided by platforms such as our Parcel Toolbox offer the ability to see how changes can affect costs beforehand.
Yet another area where companies can reduce waste is through managing their customer base. Similar to how airlines identity and prioritize certain customers, shippers can develop internal customer stratification programs.
Understanding the impact of the supply chain on balance sheets
Tracking the impact of the supply chain on balance sheets is critical for financial health and operational efficiency. Supply chain costs, including procurement, manufacturing, and distribution, can significantly influence a company's profitability. By closely monitoring these expenses, businesses can identify areas for cost reduction and efficiency improvements.
Moreover, effective supply chain management can enhance cash flow by optimizing inventory levels and reducing the time products spend in transit. Companies that streamline their supply chain processes often see an improvement in their financial metrics, leading to better investor confidence and market performance.
Finding three objectives for 2025
Heading into 2025, it will be important to set priorities. Regan encouraged shippers to choose three objectives for improving their supply chain and then address three key questions:
1. What does it cost?
2. Who do I need to have working on it?
3. What support is it going to require from the organization?
In line with this, he encouraged shippers to work on having a fact-based supply chain and stop guessing. Be open about sharing what you want and the expectations that you hope to see happen.
To hear more, listen to the full interview.
