What is Transportation Optimization?

| December 12, 2016

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Transportation Optimization is the process of determining the most efficient means of moving product to the customer while maintaining a desired service level, given a static supply chain network. The customer can be an internal component of the company or the traditional, external consumer.Transportation optimization studies are separated into two categories: strategic and tactical.

Spotlight

Transentric Inc

Since 1987, Transentric, a supply chain technology solutions provider located in Omaha, Nebraska, has created messaging solutions and business-to-business applications to transportation operations and inter-enterprise supply chains. With an extensive background in information technology, Transentric provides shippers, carriers, third parties, and trading communities with: Inventory and Shipment Visibility Business-to-Business Connectivity Intelligent Messaging Transaction Management Transportation Systems Support Event Management Alerts Data Integrity Management.

OTHER ARTICLES

Transportation 2020: Top 4 Ways For Shippers To Navigate The Road Ahead

Article | February 10, 2020

For shippers, the past two years have been a roller coaster ride. As quickly as capacity became limited and freight rates increased in 2018, the opposite occurred in 2019. Carriers that had invested in equipment and drivers in 2018 saw excess capacity and plummeting rates in 2019, a year with a record number of trucking company bankruptcies. It was a dramatic shift that occurred much faster than typical cyclical changes in the transportation industry.

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REAL-TIME SUPPLY CHAIN, GPS AND TELEMATICS MORE ESSENTIAL THAN EVER

Article | March 28, 2020

Combining real-time vehicle data and intelligent agents with integrated planning and execution for efficient, resilient supply chains. A supply chain is only as fast and responsive as the data driving it. Today, new sources of real-time data such as telematics, combined with a planning and execution platform, mean that supply chains can be more efficient, better optimized, and more automated than ever.

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How AI is used to power logistics

Article | March 10, 2020

There’s no shortage of challenges for the logistics industry, whether it’s growing global tensions or trade wars. But technology is providing opportunities for improvement – and artificial intelligence (AI) is driving a lot of that change. Data in logistics was historically underutilised. But now the ability to capture and organise big data is enabling innovation in advanced analytics, automation and artificial and augmented intelligence – optimising entire delivery cycles as a result.

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3 Ways to Benchmark to Boost Supply Chain Performance

Article | April 20, 2021

You might be wondering what the benefits are of benchmarking. Well, imagine you are training for a 100 metre sprint in your district. What would be the key number, or metric that you would need to know? It would, of course, be what the winning time was when this race was last run in your district. Without that information, you don’t know what you’re trying to target. It would be impossible to know if you’ll have any chance at all of winning the race. It’s exactly the same in business. If, for example, you are concerned about the pick rates in your warehouse, or your transport costs, or your inventory accuracy, benchmarking can help you because it can show you exactly where your performance is compared to others in your industry. A few years ago, I was working with an automotive parts business. They had a little issue with their picking productivity in the warehouse. They wondered how good it was, whether they could improve it. They actually thought it was okay. We looked at the figures and compared them with other businesses. This helped us realise that their picking productivity should be three times better than it was. And believe it or not, over a few months they did begin to improve their productivity. Why? Because benchmarking opened their eyes to the fact that they were at a level quite far below others in the industry. That’s the beauty of benchmarking. Until you know what others are doing, you can’t be sure how good your performance is. If you’ve never tried benchmarking, there are three ways you could do it. 1. Informal Benchmarking This exercise would involve you measuring particular functions or aspects of your business and comparing that against other parts of your business. Let’s say you have a warehouse operating in one city and another operating in another city. You might start to measure the same metrics and see which one is performing better. You might know other people in the industry who are also operating warehouses so you might agree to share some data with them. This is probably the easiest way to start off, but it has some downsides: You’re only measuring against a very small sample size. If all of you in the pool are not that good, how would you know what good is? You have to make sure that the businesses are similar and you are measuring things in exactly the same way. It’s very important in benchmarking to have a standard way of applying the metric. 2. Formal Benchmarking This can work for much larger businesses. Perhaps you have operations in many different countries. You could agree a formal structure for how you are going to measure performance. You could do monthly or quarterly benchmarks with all the parts of your international organisation. You could learn from each other and share best practice. This method is okay but you’re not getting access to a very large pool of results to measure yourself against. You will find that companies are very reluctant to give out benchmarking data. You might also be operating in an environment where the performance is quite low right across the business. 3. Hire a Professional Benchmarking Firm This is the ultimate way to do it, although there are not a lot of professional benchmarking firms such as ours around. If you do manage to find one, you will quickly realise that there are significant benefits to be had by bringing in the professionals: The metrics are put together in exactly the same way: When we do a benchmarking exercise for our consulting clients, we go through a very robust data-gathering process and then make sure all the costs, for example, are in the same buckets as everyone else’s in the database. You gain access to a big pool of results: Professionals have measured hundreds, if not thousands, of companies. This enables you to say, ‘Our company is this size, it operates in this industry, these are the characteristics of our supply chain, who else in that pool of results is like us? We want to be measured against them.” It’s no good measuring the performance of a grocery retailer, for example, against an industrial product supplier. They have different supply chains. You need to be measuring like with like.

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Spotlight

Transentric Inc

Since 1987, Transentric, a supply chain technology solutions provider located in Omaha, Nebraska, has created messaging solutions and business-to-business applications to transportation operations and inter-enterprise supply chains. With an extensive background in information technology, Transentric provides shippers, carriers, third parties, and trading communities with: Inventory and Shipment Visibility Business-to-Business Connectivity Intelligent Messaging Transaction Management Transportation Systems Support Event Management Alerts Data Integrity Management.

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