Big Rock Sports leverages enVista’s WMS implementation services to improve inventory and picking accuracy and lower labor costs.
Sock and legwear manufacturer reduces inventory costs and significantly improves service levels with enVista’s S&OP strategy program.
Make the most of Microsoft Dynamics 365’s Advanced Warehousing module and gain insight into the hidden treasures to unlock value.
Learn about supply chain execution and how supply chain execution software can help your company streamline processes and lower costs.
Gain insight into strategic vs. tactical sourcing and how placing transportation procurement into these categories can reduce the complexity.
In honor of Labor Day Week, this issue of Tom’s Takes provides a summary of the 16th Annual Voice of the Blue Collar Worker survey.
Supply chains can have a large detrimental impact on the environment. Sustainable logistics aim to reduce this impact.
The 33rd Annual State of Logistics Report, prepared by the Council of Supply Chain Management Professionals (CSCMP) and their partners was released in late June. Following a retraction in U.S. Business Logistics Costs (USBLC) in 2020 due to the global pandemic, USBLC increased from $1.509 trillion in 2020 to approximately $1.847 trillion – representing a 22.4% year-over-year (YOY) increase in 2021.
Similar to previous years, transportation spend, at $1,205.7 billion continued to be the predominant contributor to 2021 USBLC. It accounted for 65.3% of total USBLC in 2021, up 21.7% from 2020 transportation costs of nearly $991 billion.
All individually reported transportation modes shown had a greater-than-10% YOY increase with motor carriers up 23.4%, parcel shipping up 15.2% and rail up 18.8% from 2020. Over the past five years, overall transportation costs have risen by an annual average of 6.1%
Inventory carrying costs came in at 27.1% of USBLC in 2021 at just over $501 billion. This was up 25.9% from 2020 inventory costs of just over $398 billion, with the 5-year average cost increase of 5.0%. These costs are attributed to warehouse operations, inventory on hand, and the cost of capital. Supply chain bottlenecks – such as ships awaiting unloading, port congestion, lack of containers, fuel increases and a driver shortage – were key reasons for increased transportation costs in 2021. Although inventory levels were reported to be down in 2021, the cost to handle the inventory due to such issues as increased warehouse labor and storage costs led to the 2021 increased carrying costs.
Tom’s Take: “With a 5-year CAGR of 5.8% for USBLC, supply chain leaders will need to continue to evaluate the benefits of investments in people, process optimization and supply chain technology to help mitigate expected 2022 cost increases due to increased fuel prices and surcharges, higher labor wages, growing fulfillment center operations costs and rising interest rates.
The balance of labor versus automation projects and technology investments in transportation management systems, warehouse management systems, order management systems and labor management systems will differentiate the leaders from the laggards in not only reducing costs, but also grow top-line revenues with improved ability to execute and better manage the customer experience.”
Tom Stretar, VP of enVista’s Technology Solution Group, discusses how the Supreme Court AB5 decision could further disrupt the supply chain.
Laura DeVries, a current driver with Gulf Relay, connected with enVista to speak about her experience as a woman in trucking.
Your transportation team has become so important to your business’ success over the last few years. The Amazon effect – the speed of expectations has altered the demands and behavior of consumers and businesses. Brand surveys have shown that speed of delivery in the last mile, as well as the expectation of free delivery for B2C companies, impacts customer satisfaction more than ever. The expectations for B2C are fast and free shipping while maintaining a competitive price point. Deliver later than expected and risk a negative brand review. Charge for shipments and risk losing brand-loyal customers to your competitors. Raise prices and risk losing customers completely. For B2B deliveries, parcel and freight, these supply lines need to flow at the speed of business as your customers are counting on them to operate their businesses.
We are in a supply chain crunch. There are capacity issues, labor shortages, government regulations, driver shortages, inflation, high fuel costs and general rate increases that have left many shippers feeling the pain more than ever while eating into profits.
The speed of delivery also drives the cost up for shippers and that has a detrimental effect on the bottom line. If you don’t promise customers fast delivery, your competitors will. This puts a lot of stress on your transportation team. You want to help drive efficiencies and control costs, to gain a competitive advantage.
Doing nothing or maintaining the status quo is not an option. If there were just one overarching issue, then maybe it wouldn’t crush your business to ignore it, but businesses are taking shots from every angle. Ask yourself what deleterious effect would a slew of negative reviews of your brand based on it failing to be delivered on time have on it long term?
Amazon, Walmart and other big box retailers are full of negative reviews that have nothing to do with the product but everything to do with last-mile delivery expectations that affect the brand. Everyone in your extended organization including your in-house transportation department, 3PLs, 4PLs and vendors who ship your goods have the ability to affect your brand’s reputation.
Gain insight into strategic vs. tactical sourcing and how placing transportation procurement into these categories can reduce the complexity.
When enVista engaged with a leading U.S. apparel retailer, it wasn’t fully equipped to handle all the oncoming global supply chain issues within their transportation network. The omnichannel retailer partnered with enVista to help them build and implement a holistic supply chain strategy built upon world-class technology and domain expertise supported with:
Is your supply chain business intelligence giving your transportation and logistics team the real picture of where you stand today? Is it prescriptive of what you must do to meet peak demands and navigate the stormy supply chain waters? Let’s have a conversation and put you on the path to a competitive advantage. Learn how to optimize your global supply chain strategy, systems, data, labor, inventory, orders, customer experience, facility design, transportation, automation and operations to maximize resilience and optimize results.
Michael Falls is a Director of Global Strategic Solutions at enVista, where he leads analytics, system integration, and customer success strategy for global shippers. Joining enVista in 2014, Falls has a long track record of track record of building and leading high-achieving teams that scale business operations, innovate solutions and delight customers.
