Supply Chain Mistakes Every Transportation Company Should Avoid
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3 Supply Chain Mistakes Every Transportation Company Should Avoid

Every company should have specific supply chain procedures in place to effectively manage, monitor, and execute tasks and processes. As seen in the past two decades, major corporations have fallen prey to simple supply chain mistakes that cost time, money, and a brand’s good reputation. In the pursuit of establishing good practices, top companies have made dangerous errors when it comes to supply chain management. Here are a few of the top mistakes you will want to avoid.

 

Measuring Cost and Not Impact

As budgets get tighter and resources diminish, evaluating the supply chain is focused primarily on cost – not total impact. Unfortunately, this method is proving ineffective for modern companies, as one missing link in the supply chain can leave businesses in the red, customers unhappy, and reputations marred. Companies are now instituting an impact-based evaluation of the supply chain, which identifies weak links and helps eliminate supply chain risks capable of negatively impacting business as a whole.

Failing to Implement Scalable Solutions 

The ability to grow without causing a hiccup in the supply chain is a hallmark of successful companies. However, failing to implement scalable supply chain solutions early on may result in a severe – and costly – disruption to business. Instead of making this mistake, choose scalable solutions designed to grow along with your business’ needs.

Lack of Robust TMS

Simple transportation management systems do not necessarily provide companies with the information needed to stay ahead of the competition. In fact, failing to implement a robust TMS can have dire consequences when it comes to evaluating the entire supply chain process and minimizing risk. A robust TMS touches upon each stage of the process to provide you with valuable insights into the health of your company, from rail and port integration to accounting and invoicing functions.

Companies That Learned the Hard Way

In the past 20 years, top companies have been negatively affected by a supply chain disruption due to poor decisions made at the executive level. Here are three of the top supply chain catastrophes experienced in recent years:

  • Hershey Foods. Back in 1999, Hershey Foods experienced a supply chain mishap at the height of the Halloween candy season. A lesson costing the company more than $150 million in sales, the disruption was the result of prematurely launching a new supply chain infrastructure.
  • Adidas. Like Hershey, Adidas prematurely launched a supply chain management system without confirming it would be successful through impact modeling. Designed to manage warehouse distribution of its product, Adidas’ system failed mid-launch, resulting in an inability to fulfill approximately 80% of U.S. orders. The resulting loss in market share was huge for Adidas, as millions in sales were lost and business was disrupted for months.
  • ToysRUs.com. In the same year Hershey Foods took a hit, ToysRUs.com was dealt a similar blow when holiday orders were delayed due to an inadequate supply chain. Once the company’s site was launched and began to take orders, sales came quicker than Toys R Us’ supply chain was capable of managing. As a result, Toys R Us lost credibility among loyal holiday shoppers and had to troubleshoot the issue by outsourcing order fulfillment to Amazon.

 

Don’t Make Costly Mistakes – Choose GTG

A well-designed supply chain and management plan is essential when mitigating risk and protecting a brand’s reputation. If your company needs a scalable, efficient, and robust TMS solution, choose GTG Technology Group. To learn how we help keep your business moving, contact us today.

Sources:

http://www.alom.com/wp-content/uploads/2014/03/ALOM_RiskManagementTop5Mistakes.pdf

http://supplychaincoach.com/june-webinar/

http://www2.uhv.edu/luj/MGT6352/The%20Top%20Ten%20Supply%20Chain%20Mistakes.htm

http://webcache.googleusercontent.com/search?q=cache:olNdA-iGQdUJ:www2.isye.gatech.edu/~jjb/wh/tidbits/top-sc-disasters.pdf+&cd=5&hl=en&ct=clnk&gl=us

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