Do you believe in ghosts? Well, that’s absolutely your personal opinion. What we would like to believe is that unless someone brings in adequate scientific evidence, we will keep ignoring their existence even though there might be a demon watching over me right now. I’ll also ignore the incident where I heard my own voice calling me from the backseat of my car while I was driving home last evening. No scientific evidence, does not qualify as reality, right?
Existence of ghosts has always been up for debate. But what we are interested in is its notorious reputation. Ghosts are known to be mischievous, destructive, and most importantly invisible to the naked eye. They have even managed to gain the reputation of an entity that feeds on the happiness and wellbeing of the living. So, supply chain stakeholders does it ringany bells? A similar entity has been causing troubles in your life too and unlike ghosts, it’s very real.
Poor logistics visibility has been a major cause behind sleepless nights for logistics stakeholders. It has been mischievously feeding on profit margins, slowly destroying brand reputation and impairing sight of ground level operations. An exorcism won’t help get rid of the challenges posed by poor visibility, but modern logistics tools can.
Poor Visibility Feeds on Profit Margins
It’s not easy to put a value on the total amount businesses lose every year owing to poor logistics visibility. It’s a multi-layered problem and one cannot point out any one area and say “yeah, the ghost is in that room.” It’s more like a demon, possessing the most vulnerable individual in a house and then rapidly spreading it’s negativity across the entire house.
Businesses seldom have adequate visibility of ground level logistics operations. Result? Logistics stakeholders do not have control over fleet activities. Things like unnecessary diversions, prolonged stoppages, theft and pilferage, avoidable delays, frequent halts, vehicle idling, loss of physical documentation and more take over logistics operations and gradually starts making financial dents that’s not easy to comprehend. For instance, to put a financial cost to the idling problem, a normal truck idling for 25% of its working day will use $2,500 worth of fuel per year during this idle time. That’s a cost that could easily be saved. Here’s another one. By taking unnecessary turns, delivery fleets consumes as much as 10 million gallons of extra fuel a year. These are just two metrics, imagine the cost associated when all the problems triggered by poor visibility are taken into consideration. That’s one greedy demon feeding on the vulnerabilities of your logistics operations.
Poor Visibility Destroys A Brand’s Reputation
If your house has gained the reputation of being haunted, neighbors and friends will rarely drop in to say “Hi.” Similarly poor supply chain visibility directly impacts customer loyalty. Challenges like prolonged delivery delays and lack of customer transparency triggered by poor visibility will gradually drive away your customers.
Today, customers do not just pay for the product they want to buy, their decision to purchase is significantly influenced by how the product will be delivered. Questions like does you business provide contactless deliveries? Can the health of the delivery executive be visible to customers? Can customers gain real-time visibility of how her delivery is progressing? Do they get to know about delays? So on and so forth. Therefore, just like the product quality, delivering on high-levels of service expectations is equally important now. One study found that 69% of consumers are much less or less likely to shop with a retailer in the future if an item they purchased is not delivered within two days of the date promised and we all know that it costs anywhere from five to 25 times more to acquire new customers than retaining an existing one. Hence, along with prayers, businesses need to leverage advanced predictive and real-time visibility tools to drive aways the demons that will cause or already is causing customer churn.
Poor Logistics Visibility Disrupts Supply Chain Operations
Going by the tales we have heard about ghosts, these entities make a house difficult to live in. They cause unnecessary disruptions. Opening up doors, suddenly closing windows, switching the lights off (this one is their favorite they say), throwing away utensils, spoons and knives all over the kitchen and rocking chairs every now and then are some of the common ways ghosts cause disruptions in a household. Its counterpart, poor logistics visibility, has gained pretty much a similar reputation with regards to supply chain operations.
In absence of capabilities that allow real-time visibility of ground level logistics operations, managing supply chain and ensuring seamless deliveries become extremely cumbersome. This in turn results in poor delivery productivity, inaccurate KPI benchmarking, increases risks and makes inventory management difficult.
In a B2B scenario, even a single day delay can cause huge losses in terms of productivity. Think of a situation where you supply heavy equipment to telecom companies responsible for setting up towers in remote locations. Your delivery gets delayed by a day and as customers do not have any visibility over the delay, an entire team’s one day man-hour gets squandered. As hours keep adding up, the estimated time to make the tower up and running goes way beyond the budgeted time; And for your telecom customer, this ripple effect can result in losses adding up to millions of dollars in lost productivity.
SLAs (service level agreements) also get impacted owing to poor visibility as there is no sophisticated way to track if service levels are being religiously followed. Risk of threat increases multifold when businesses do not have visibility of fleet activities. A driver can pause for hours without shippers knowing about it. Visibility of inventory is crucial when it comes to meeting customer demands. Imagine a situation where a business accepted a same-day delivery request and later learns that it does not have inventory ready to execute the request.
So don’t you think life will be much better if you can stop the “poor visibility ghost” from haunting your supply chain? A modern logistics management can do that for you and in this post you will get more insights as to how that’s possible.
It’s 4 am in the wee hours of morning. I should be leaving now. I can see the owner of the laptop shivering out of fear as he watches the alphabets being automatically pressed on the keyboard...
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