Using Your Transportation Management System Data to Make Better Manufacturing Decisions
Posted by FreightPOP on Monday, November 29, 2021
The current challenges in the supply chain are creating havoc for everyone, from manufacturers and suppliers to carriers, retailers, and consumers. It seems every day brings yet another surprise, and surprises lead to negative customer delivery experiences.
What if you could eliminate many of the surprises about what’s coming in and when and eliminate the potential friction in the system?
By simplifying and streamlining the logistics experience, manufacturers can provide a more efficient way for customers to know exactly what’s happening at every stage. The right transportation management system can provide the data you need to make better manufacturing decisions when it comes to:
● Resource efficiency
This helps keep your customers in the loop and makes your production planning easier.
There’s no question we are in a difficult environment. Manufacturing bottlenecks and shipping delays have mounted at the same time demand has surged.
If you don’t know when raw materials and supplies are coming in, you can’t make good decisions about meeting commitments with your customers. Capacity planning begins with accurately forecasting demand to order and receive the products or materials you need. You have to piece together what you need, how much you need, where it’s coming from, and when you can get it.
If you miss the mark on your capacity and resource planning, you face several significant problems, including:
● Failure to meet demands and commitments
Issues Manufacturers Face
For many products, the cost of materials can account for as much as 50% of total manufacturing costs. If you have to rush materials due to poor planning or supply chain congestion, the increased costs for shipping can significantly eat into your profit margins. If you over-order to ensure you have enough supplies on hand, you increase your holding costs and tie up valuable warehouse space and capital for materials you may not need.
Before placing an order or issuing a P.O., you really need the answers to some fundamental questions to protect your manufacturing business:
● Can the vendor supply the quantity of the required materials?
If the answer to any of these questions is no, you will struggle to fulfill orders.
How a Transportation Management System Can Help
A transportation management system (TMS) can help you monitor and evaluate your supply chain by providing reports on a vendor’s deliverability based on meeting your deadlines. The right TMS for your business can report on the number of items pending, outstanding, or delayed and highlight fulfillment issues.
Breaking Out Supplier Charges
A good TMS should also give you reporting on total landed costs, so you have insight into what suppliers are costing you in terms of goods, products, and shipping. This is important since suppliers usually control both product and shipping. In most cases, they handle the shipping at their rates, pay for the freight, and bill you. That typically comes at a significant markup. So, when you assess your suppliers, you should be looking at both hard costs and landed costs.
A robust transportation management system can also track both real-time and historical data to help you evaluate supplier reliability. This helps you forecast deliveries better and enables you to work with suppliers with the best track records to fulfill your orders on time. This is how TMS systems support "prescriptive analytics"—or put another way, how they answer the question: "How can we do better?". The software provides insight into different scenarios so you can forecast and plan more accurately.
When you can see what’s coming and can accurately track your inbound, manage your inventory control process for validating products that have made it to the dock, and check them into your order system, it streamlines your entire procurement process.
Manufacturers can make better decisions based on using data with clear visibility into the supply chain. This eliminates surprises and helps you run a more efficient operation.
New Ebook: 8 Strategies to Build a Disruption-Proof Supply Chain
How FreightPOP Helps
FreightPOP's transportation management system allows you to expertly assess your vendors and suppliers with one-click supply chain management. And with FreightPOP’s customer portals, you also improve communication with your suppliers, easily establishing what quantities are available, when they will ship, and if there is excess capacity.
FreightPOP gives you and suppliers a more transparent view of what’s available and what is planned, allowing you to track inbounds and outbounds at every leg of the journey.
Learn more about How FreightPop can help you better control your supply chain and run your manufacturing business more efficiently. Contact FreightPop today to request a demo.