Your transport and distribution network plays a vital role in your supply chain. At times of company expansion or reorganisation, many businesses review their transport capacity in light of their operational commitments, vehicle size and customer service requirements. This reassessment cannot happen in isolation, but is usually carried out in conjunction with warehouse improvement and other steps to improve the supply chain.
While many businesses manage their transport planning strategy in-house, outsourcing this function to a Transport Planning Consultant such as LPC gives you several strategic advantages. This article is an outline of how a Transport Planning Consultant can help you achieve improved ROI from your transport operation.
1) Assess Your Current Operation
A transport network is never a static business. Over time the needs of your business will change as you take on new customers, ordering habits change and new products are introduced. To ensure your transport network is equipped to deal with the needs of your business, it is useful to regularly assess your capabilities.
This starts with a realistic analysis of your current vehicle and resource utilisation, as this is an important indicator of productivity and efficiency. Determine how many containers, pallets and cages are used on every vehicle on each delivery, how much vehicle space is underutilised, and the mileage covered. This will setbenchmark for improvement and show where efficiencies could be made.
This assessment can be carried out manually, although a Transport Planning Consultant will be able to help you by running a virtual analysis, using planning software and data from your driver tracking system.
2) Create An Improvement Strategy
Knowing your current strengths and weaknesses does not itself in itelf help you save costs. Working with your utilisation analysis, a consultant can help identify ways you can maximise the output for each driver-hour and make full use of the carrying capacity of your fleet. This forms the basis of an improvement strategy, where opportunities are exploited and data should be gathered for regular reviews. A consultant may use route planning software or planning applications to model a number of efficiency saving solutions using different transport scenarios. The most efficient scenario can be implemented across your network; sometimes involving large scale reorganisation of your fleet or augmenting your capacity by using a 3PL partner.
3) Understand & Review Your Logistics Data
Data recording and analysis are the keys to continual improvement. It ensures that every action you take can be measured and assessed in terms of ROI and productivity markers. Again, good modelling software, supported by a Transport Planning Consultant, will be a crucial factor in improving your efficiency over time. Setting up a virtual model of your distribution network using real operational data lets you create an unlimited number of improvement scenarios. This lets you update and test your strategy without having to implement untested changes.
Data review and solution modelling is an extension of the actions taken when setting up your strategy; the difference being that ongoing improvements tend to be on a smaller scale and can be implemented progressively over time. This reduces the impact on your business and makes change management easier – while ensuring your Transport Strategy remains relevant to your current needs.
4) Outsource Transport Functions To Reliable Third Parties
Your initial assessment and ongoing improvement plan may have shed light on parts of your operation where savings can be made, or where there is a gap in your capacity. In these circumstances it is often more cost-effective to outsource parts of your distribution network, rather than taking on new assets in-house. However, tendering to third parties and managing these relationships is time-consuming in itself, and comes with a certain level of risk. A Transport Planning Consultant will be able to use their experience to negotiate suitable contracts third parties, manage the tender process and implement an integrated strategy combining both outsourced and in-house resources.
Download Our FREE E-book
There are various options for transport planning that allow you to optimise your own vehicle and resource utilisation. For a free guide to transport planning and management, please download our new e-book: Transport Planning & Transport Logistics. The guide covers a wide range of supply chain management topics, including improvement strategies, working with third parties and resolving logistical difficulties. Click here to access your copy.