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?
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.
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.
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.
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:
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.
Now let's take a look at the steps in how a third party conducts an audit.
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!