Blog: 4 Primary Challenges of Establishing and Maintaining Logistics

August 26, 2020 Ivy Davis

With COVID-19 causing operational disruptions across countless industries, it’s more important than ever for organizations to gain visibility and track movement across their supply chains.

To help illustrate the significance of shipment and logistics visibility, and the challenges involved in maintaining that visibility, we asked one of our strategic partners,  Glenn Koepke, the Vice President of Network Enablement at FourKites, to share his thoughts on how organizations can ensure seamless collaboration for optimal performance. 

What Are the Primary Challenges Affecting Logistics Visibility?

Koepke shared his recommendations during a recent webinar with DiCentral on how enhanced chain visibility can address the four major logistics disruption points referenced below. 

Supply Chain Disruption #1: Volume

Koepke: The first disruption we’ve seen in the logistics industry pertains to volume, especially as it relates to demand and supply fluctuations.

Whenever there are changes in supply and demand volume, companies have to take a hard look at how their resource network will be affected. For example, if a warehouse operation experiences a 20% volume increase, they would need to find the capacity to meet that demand. This is where logistics visibility proves its value, as it allows a warehouse to forecast volume spikes and plan accordingly.

The logistics industry is driven by supply and demand, and any volume fluctuation will cause problems with consistency and impact a carriers’ ability to commit to freight. In turn, this creates a chain reaction that eventually reaches the customer, as the products they need won’t be where they need them. 

Ultimately, most supply chains and logistics networks are trying to deliver the goods at the right cost and at the right time. If things get out of line, the network is impacted, sometimes dramatically. 

Suppose you’re a food manufacturer, and you need a specific raw material, but don’t have carrier capacity to get that material into your warehouse. This will cause a production delay, and that delay can cause a significant loss in sales.  We need to make sure that logistics visibility is a staple in the industry, as it will exponentially improve the way we respond to these disruptions.

Key Takeaways: 

  1. Supply and demand have experienced tumultuous fluctuations in 2020, and companies are struggling to maintain their agility.
  2. With volume on the rise, retailers, manufacturers, distributors, and technology providers are investing serious time and energy into making logistics and shipping visibility a priority in their network.

Supply Chain Disruption #2: People

Koepke: As a result of the dramatic fluctuations in supply and demand, logistics companies have been trying to make sure their people have the resources they need to stay agile. But when you look at these teams, they tend to be classified as overhead. Customer service departments, production planning teams, and logistics teams aren’t sales teams, which means they’re not directly driving revenue. Since they’re not specifically tied to a revenue goal, they tend to get stretched thin and are forced to operate in several different roles.

The question that supply chain managers are looking at then, is this: Are we leveraging the talent of our employees effectively? Unfortunately, the answer is often no. One of the reasons for this is, quite simply, a lack of technology. The logistics industry still relies on a lot of manual communication. Without the proper investments made in technology, logistics employees have to do things manually, which involves more time, more energy, and more money.

Suppose a shipment is late, and the customer calls a help desk to ask about the status of their delivery. That customer service rep will probably have to email or call the appropriate logistics team for an answer. If that team doesn’t have the right technology investments—and in a lot of cases they probably don’t—they will have to reach out to the warehouse or even the driver who is carrying the shipment. Getting an answer back to the customer will then become a long and complicated process, frustrating the customer and the resource network.

Key Takeaways: 

  1. As supply chains across industries become more global and complex, data sharing and collaboration between supply chain partners have become essential.
  2. Outdated technology prevents people from doing their jobs effectively. This muddles logistics visibility and frustrates customers and workers alike.
  3. If logistics visibility were more of a priority, customers, warehouses, and manufacturers would know exactly where their shipments are at any given moment, alleviating frustration and promoting better collaboration.

Supply Chain Disruption #3: Delays

Koepke: One of the things I’ve always said about folks in the supply chain is that they’re fantastic at being agile. Supply chain experts deal with delays and disruptions every day. Our goals and job roles aren’t based around the status quo; they’re based on how we manage the delays that disrupt the status quo. 

With volume increasing at an unpredictable rate, we need logistics and shipment visibility more than ever. If a warehouse ships an average of 100 loads per day but is suddenly asked to start shipping 150, problems will arise. Somehow, that warehouse has to get 50 extra loads through its network with the same amount of resources, time, and staff they had when they were only tasked with managing 100 loads in a day.

A disruption like this causes detention, which is our term for the waiting time that occurs when shipments are delayed. The substantial delays at distribution centers are creating significant bottlenecks across the industry. These bottlenecks create detention, and that detention affects drivers—who are paid for each mile they drive, meaning waiting at a distribution center equates to not getting paid. Furthermore, when the drivers are delayed, customers are unable to receive the product they ordered, which adds further tension to the entire logistics network.

Key Takeaways: 

  1. Logistics disruption and delays are nothing new, but COVID-19 has significantly increased detention and placed a serious strain on the logistics network and the people responsible for running it.
  2. Logistics visibility can help manage these disruptions, as it helps managers identify where delays occur, and either helps to expedite a solution or prevent them from happening again.

Supply Chain Disruption #4: Supply

Koepke: The final significant disruption that logistics networks face in 2020 revolves around import and export, specifically the supply that fuels those efforts. Whether it’s tariffs or trading disputes, there are so many disruptions in the import/export business that we can’t begin to predict them all.

You can’t solve every problem before it occurs, but you can give yourself the resources and information you need to get full visibility into your network. And when you have visibility into your network, you’re in a prime position to equip it with the framework it needs to remain agile even in the face of tremendous supply fluctuation. 

When you make logistics visibility a priority, you can give your customers, your employees, and your partners unprecedented insight into shipment status. This way, they never have to feel like they’re left to their own devices, saving everyone time, energy, and money. That’s the power of logistics visibility.

What Comes Next?

2020 has been a tumultuous year, and even with most of the United States in some stage of reopening, things aren’t quite back to normal. If you want more details about the four supply chain disruptions outlined above and an in-depth look at how logistics and supply chain management strategies are staying agile in the face of the COVID pandemic, be sure to download DiCentral’s full webinar with Glenn Koepke!

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