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Five Signs It’s Time To Update Your Supply Chain Technology

Source: Talking Logistics, by Dan Grimm​


Does technology hold you back or accelerate your success?

Supply chain applications have changed so significantly over the past decade that the use of legacy applications can prevent companies from reaching their full potential. Legacy solutions work fine by the previous standard that was in force — but today it’s not near enough.


True modernization and business benefits occur when supply chain and transport management applications are integrated into a network that utilizes ecosystem data to provide easier access to service and collaboration with, for example, partners and carriers. Many companies have a current need for an update that can increase capacity, increase efficiency, and deliver lots of data that can be utilized to improve operations and customer experience. If you are unsure whether your current setup can deliver on those parameters, here are five signs it’s time to consider a more modern solution.


The Five Signs

1. Your customers get annoyed with you.

The world is moving toward smaller shipments and whether direct-to-consumer or direct-to-business, customers are able to go online and see exactly where their order is, right now. Customers expect it, because they have all ordered goods online, with a quick overview of order status and delivery. They do not understand why your company cannot provide this service in relation to their shipments. Visibility of inbound and outbound shipments is key to meeting expectations and building customer confidence.

2. Only two people in the world understand your system – and they are retiring soon.

If you are still dependent on older technology, the odds are high that the people who have developed and might maintain your solutions will soon retire — and either no one knows the fine details of these configurations, or at best it’s tribal knowledge. Perhaps the original vendor no longer supports the application, or the applications are so highly customized that it is difficult to keep it running. Any way you slice it, this is a high-risk situation.


3. Transportation costs are swallowing up profits.

Transportation is a significant part of the cost of doing business, and for many companies and service providers operating on a low margin, bringing costs down is the key to surviving. This can be done with a modern transportation management system (TMS) application connected to a network where together they generate loads of data. This data helps to make better decisions when it comes to finding long-term savings and understanding the trade-offs between cost and service.


4. Inventory and inventory-handling costs are too high.

If you do not have complete control over incoming shipments from your suppliers, typically more safety stock is needed to help secure enough inventory. Improved transparency over inbound shipments allows for a reduction in inventory, which will remove large costs from the supply chain. Minimizing safety stock not only decreases your carrying costs, but also reduces the risk of getting stuck with goods and materials that are otherwise difficult to sell, as is often the case with seasonal or trend-based goods.

5. You cannot execute on new ideas and opportunities.

An optimized, friction-free supply chain allows you to act quickly when new opportunities (or challenges) arise. Finding new ways to make logistics a competitive advantage rather than a cost is essential. For example, today’s customers want opportunities like parcels, cross-border trade, and last-mile delivery. If your existing system doesn’t support these capabilities, customers will be disappointed. Updating your supply chain technology to a cloud-based platform of integrated applications helps meet the new demands you’ve already identified and the ones even your customers don’t know about yet.

While this list is not comprehensive, these five areas are leading indicators that now is a good time to evaluate new technology options and make a change that will accelerate efficiency and help you gain competitive advantage in any market environment.

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