Now that we’ve started the new year, we should take a detailed look at the best practices for keeping supply chains running at peak performance. Regular supply chain audits keep your shipping operations operational and functional all year. So, why is it that they're often ignored?
When Should You Audit Operations?
Oftentimes, the thing that prompts an audit is money. Auditing your supply chain can provide an objective look at what you're really spending from end to end. This can be especially scary when you just completed your budget for the new year and didn’t include any space for an audit.
New projects and new supply chains can also signal that it's time for an audit. For instance, if you are switching from using a global strategy to a near-shoring, there may be new opportunities for efficiency. Another example could be that your company recently merged with another that has its own, separate supply chain. You could be paying twice the cost when those shipments can be consolidated into one easier, more sustainable mode
However, a new project or high expense shouldn't be the only thing that prompts an audit of your supply chain. Every year supply chain operations face new challenges to overcome, and your strategy should shift based on this. What may have been a good financial and supply chain decision last year might not be wise this year. A supply chain audit should be conducted regularly throughout the year by a third party as part of your business's best practice.
Audits are like a health check-up for your business. Just as you depend on a doctor to assess your health each year, regular end-to-end supply chain audits help ensure that your business is healthy.
Beware of these three excuses for avoiding a transportation audit.
Relationships with current suppliers are good
Maybe you feel that rebalancing your transportation network has the potential to harm current existing contracts. Shifting volumes to a new supplier might damage a key relationship or change your volume discounts. And, there's no doubt that repeatedly asking suppliers for price concessions can cause "RFP fatigue." We're not advocating that: But we are suggesting that a systematic review can uncover opportunities to combine partial truckloads, shift goods from less-than-truckload to full trucks or shift modes. You'll only see these inefficiencies with a comprehensive review of your entire supply chain system.
Audits take too much time
To use an earlier example, going to the doctor takes time out of your day. And if you are busy with a heavy workload, taking that time out of your day can seem nearly impossible. This is why leaning on a third party is important. Having someone else who is trained and knows what strategies to look for, can relieve this pressure on your internal team. How much you delegate in that process is up to you.
Don't know where to start?
You likely already have all the data you need. Your company's existing recent Request for Proposals (RFPs) will already contain all the information you need, including:
- Individual lanes by modes of transportation
- Frequencies of shipments
- Weights and volumes
- Origins and destinations
- And more
That pre-created document can be uploaded into an audit program. Additionally, that information may already be inside a ERP system such as Oracle or another SAP software package. These reports are easy to pull and great to provide to auditors.
Steps In A Strategic Transportation Audit
Now let's take a look at the steps in how a third party conducts an audit.
- Gather your data — Your partner should have the systems and expertise to take in your data, normalize and analyze it.
- Analyze the data with a proven system — Our own approach has been optimizing operations for the world's biggest supply chains for over 30 years. Our experts look for overlaps in shipments, high shipment volume and shipment and customer densities.
- Consult together — We understand that no two shipping operations are the same and will have unique business objectives. Once we've developed a plan for your operation, we consult with you to ensure it aligns with your priorities.
- Provide a Proposal — After we intake your objectives and data, we create a proposal that is custom-tailored to your needs.
- Design the new system — Once we agree on any optimizations, we can work with you and your suppliers to implement them. If there is a need for new suppliers, Morgan can set up a new relationship.
Let Morgan Optimize Your Transportation Network
Completing a regular assessment with a third party on an end-to-end strategic basis is a best practice for your organization. Not doing so endangers the health and efficiency of your business. Morgan can help you optimize your shipping lanes while providing a smoother supply chain. Reach out to our team of experts today to see how we can help!
