Is "On-Time Delivery" Just a Promise or a Process to Gain Competitive Advantage?
Over the years, transportation remains one of the top five expenditures for Hi-Tech manufacturers, Retailers and Distributors. As Hi-Tech manufacturers strive to be competitively responsive to the marketplace demands in order to leverage the economic growth, and be a step ahead of their competitors, gaining control over pace and the cost of the transportation activity becomes imperative. As per leading industry analyst firm "A 5% reduction in transportation cost has the same P&L impact as a 5-30% increase in sales".
Primary Objective of Transportation
Make "On-Time Delivery" to Customers Cost Effectively
100% on-time delivery has become a benchmark for transportation. Customers expect 99.9% on-time delivery performance from a Logistics Service Provider (LSP), with minimum damage-in-transit, flexibility to accommodate any order changes and end-to-end visibility through track & trace of the orders and shipments.
On-Time Delivery to customers improves net margins by:
- Faster revenue realization and reduced turn-around-time
- Enhanced credibility of service
- Reduced waiting time for consignee
- Optimized storage space and equipment utilization
- Enhanced predictability through end-to-end visibility
Delivery based Promising to Customers
The time-lines for each pickup and delivery are planned in advance and are communicated across the transportation network so as to ensure adherence at each level. This largely reduces the delay at any of the levels in the transportation network, as the timelines are being tracked and monitored across the network. Communicating plans in advance increases the likelihood that transportation service will be on-time and more cost-effective.
Proactive Monitoring of Shipment
Proactive monitoring of shipment events helps to control the unplanned costs and minimize customer service issues. Prior notice always produces more informed decisions on corrective action.
Demand-to-Deliver (D2D), a pre-configured solution leverages the Oracle Transportation Management (OTM) for Hi-Tech manufacturing industry logistics process area to improve "On-Time Delivery" for better transportation operational planning, optimization & freight spend visibility. Based on the availability of resources & customer promise dates, OTM plans the transportation orders to calculate the transit time and optimize the shipment cost. OTM also monitors all the shipment events from booking to delivery for better visibility. Based on the transit times derived from OTM, D2D solution can fulfill the demand of "On-Time Delivery" and influence the net margins by better controlling the unplanned costs.
Author: Lakshmana Murthy K / Abhishek Sabharwal
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