Successful manufacturers are always on the hunt for ways to reduce cost of goods sold to help drive margin growth. The supply chain offers a smart place to start because it is one big, connected machine that impacts every part of the business. Usually when one element goes off track, consequences are felt throughout. Time and money are spent to optimize supply chain processes, mitigating risk and limiting the slowdown of goods produced and moved.
But there is one critical supply chain process that has remained unchanged and inefficient for years. Unfortunately, this process is not equipped to handle today’s extreme market volatility. Manufacturers across the US continue to use this old, rigid process because no other options exist to replace it- until now!
A fully-optimized freight procurement process is necessary to navigate extreme market conditions, and flips. And 2021 is already showing unprecedented activity.
The “traditional” way to procure freight is rigid and static. It fails all parties involved, except for brokers, especially when market prices swing quickly due to swift changes in supply and demand.
Loads move through a systematic waterfall until they are accepted. When capacity is tight, an inefficient process can take hours to complete. Shippers who have yet to update and optimize putting the entire supply chain at risk.
This is where technology comes into play. Technology has optimized the freight procurement process, eliminating increased costs and challenges associated with extreme market unknowns and fluctuation. Late deliveries equal OTIF penalties, as well as missed appointments & unfulfilled SLA’s to customers. Those consequences are felt up and down the supply chain; however, software now provides another option for freight procurement. Here is how software helps and differs from brokers and DFBs:
The freight procurement process is the most complex and costly process within the entire supply chain. With unpredictable market volatility, every manufacturer should be committed to optimizing this critical operation. Shippers who continue to use the old, static way to procure freight will continue to place their entire supply chain at risk.