How Did the Modern Supply Chain Come to Be?

How Did the Modern Supply Chain Come to Be?

Here are eight key events that contributed to the creation of the modern-day supply chain.

The modern supply chain is a complex animal that’s come a long way since the cavemen in the cartoon below were experimenting with the earliest modes of transportation (we’re hoping this one didn’t make it past the drawing board).

Much innovation and evolution has taken place since those early, experimental days. Fast-forward to 2020 and we’re at a point where hundreds of millions of shipments traverse the world’s transportation networks every day. Supporting these movements is an ever-evolving technological foundation that includes advanced innovations like artificial intelligence (AI), machine learning (ML), robotics, and business analytics.

The modern supply chain’s predecessors were equally as advanced for their time. Here are eight facts you may not know about the history of the supply chain and how it culminated into today’s complex, global networks:

  1. Ancient trade routes were mostly linear chains that took finished products to their ultimate destination. Because production and consumption of most items took place locally, the producer and consumer communicated directly with each other. This made for a pretty simply supply chain. “In ancient times, transportation technology was basic and the cost of moving goods was an important determinant of the production and distribution of a product,” The Globalist points out. “Thus, goods were put together close to the source of raw materials. Then, these products made their way in a largely linear chain to their end consumer.”
  1. The Industrial Revolution broke up that linear chain of command. During the 18th century, shipping technology improved to the point where it could supply the large-scale functioning of international production networks. As the Industrial Revolution took shape, production networks took on a different scale, globalization took hold, and transportation technology witnessed major breakthroughs (i.e., railways, the Suez Canal, and the Panama Canal). “As a result, the cost of transporting goods dropped sharply,” The Globalist “Ocean freight rates, for instance, fell 70% between 1840 and 1910.”
  1. Supply chain management started in the warehouse. Early efforts were focused on pallet and pallet lifts mechanization (circa 1940-1950) to obtain better warehousing space, racking, and layout. The “unit load” concept and pallet use became popular, extending to transportation management in 1950 by utilizing intermodal containers together with ships, trains, and trucks to transport them. This set the stage for supply chain globalization.
  1. The computer was born. In 1963, the National Council of Physical Distribution Management took a lead role in transferring some of earliest supply chain discoveries over to the world of physical product distribution. Computers came to be right around the same time; this helped push NCPDM’s agenda. Up until that point, manual records and transactions were the norm. Then, data computerization created opportunities and innovations in logistics planning (e.g., randomized warehouse storage, truck routing, and inventory optimization).
  1. There’s a self-proclaimed “father” of the modern supply chain. Consultant Keith Oliver recalls the moment in 1978 when a light bulb went off while he was a working for a unit of Philips NV. Components in a Philips television, he discovered, traveled an average of 30,000 miles—hopscotching the globe from one step of production to the next before arriving in an American or European living room. U.K.-born Oliver, then in his mid-30s, pitched a solution initially billed as “integrated inventory management.” That term eventually became “chain of supply” and, later, “supply chain.”
  1. Supply chain management hopped on the technology train. By the 1980s, personal computing was stoking logistics transformation and improving supply chain management. “With access to computers, planning surged ahead with unprecedented graphical interfaces,” FlashGlobal points out. “An emergence of new technology like flexible spreadsheets and map-based interfaces significantly improved logistics planning and execution technology.” This would continue to evolve throughout the 1990s, when enterprise resource planning (ERP) systems were used to identify planning and integration needs for logistics components.
  1. The cloud changed everything. Today’s supply chain is an evolving ecosystem where trading partners can collaborate via the web. Cloud computing technologies are enabling breakthrough innovations in supply chain management (SCM) applications delivered via SaaS (software as a service) models. “By enabling a ‘network’ view,” Accenture points out, “digitization can help companies capture huge savings and competitive advantages by fostering networked processes; optimizing the complete enterprise instead of individual functions; and driving new ways of thinking and working by enhancing visibility, collaboration, and innovation.”
  1. Supply chain control towers amped things up. As supply chain managers target greater efficiencies, Accenture says one overarching cloud- based strategy can be used to enhance cost improvements and performance: establishing a “control tower” to coordinate and orchestrate the elements that make up the supply chain. “Control tower systems connect trading partners and service providers,” Accenture states, “to create a vibrant, ‘always on’ electronic community.”

The Evolution Continues

IntelliTrans’ Global Control Tower provides high levels of supply chain transparency; aggregates, completes, and enhances data from a variety of sources; offers visibility into and execution of different aspects of the supply chain; and generates data-driven alerts and analytics that ask deeper questions and deliver meaningful insights.

By leveraging tracking information, the Global Control Tower provides analytics that measures key performance indicators (KPIs) like fleet cycle time, origin/destination dwell time, lane and hauler performance, back orders, freight spend, load optimization, and more. With their rate, equipment, lease, tracking, and invoice data in a central repository that’s accessible 24/7, companies can position themselves for success in any market conditions.

Why Don’t You Have End-to-End Supply Chain Visibility?

Why Don’t You Have End-to-End Supply Chain Visibility?

If your supply chain management platform isn’t giving you end-to-end visibility, you’re missing out on some critical benefits and competitive advantages.

For most companies, the idea of having end-to-end supply chain visibility has been the Holy Grail of supply chain management. It’s also been somewhat of a pipedream for most of these organizations. They know this level of visibility exists and they understand its value, but they just can’t seem to connect the dots in a way that leads them to complete, end-to-end supply chain visibility.

This presents major problems for companies that need end-to-end visibility in order to manage inventory, monitor shipments, and meet customer expectations. Today, that pretty much encompasses all B2B and B2C organizations. The problem is that many shippers don’t know where inventory is located, what level of service their carriers are providing, or where the stopgaps are in their supply chains.

You Can’t Run on Incomplete, Outdated Information

Despite the investments being made in people, processes, and technology, few companies can say that they have end-to-end visibility across the supply chain. Lacking accurate key performance indicators (KPIs) based on this data, most of these companies are still running on incomplete and outdated information.

It’s been nearly three decades since IntelliTrans introduced its visibility platform, and we’ve been perfecting it ever since. To date, we’ve helped thousands of companies achieve something that’s still out of reach for many: obtaining a complete, end-to-end view of the supply chain that starts at the transportation planning stages and ends when the product is delivered to the end customer.

With a supply chain visibility platform in place, shippers can save an average of 6%-10% in annual transportation costs. These savings come not only from selecting the lowest-cost carrier and the right transportation mode, but also from achieving flawless shipment execution across the entire supply chain:

• It starts at the planning stage. The shipper gets the order from its customer, and then works to select the right transportation mode. It then executes the load with that carrier or carrier base. The pickup date is determined and the payment is calculated.

• Extreme dock scheduling. The shipper and carrier decide on a pickup time at the dock. The carrier knows exactly where to be at what specific time and what it’s supposed to pick up, to ensure the most fluid operations possible. This helps eliminate the detention charges associated with trucks sitting around the yard, waiting to be loaded or unloaded.

• Managing in-transit shipments. Using exception management as a basis, the visibility platform helps reduce transit time variations by automatically resolving these and other exceptions. Rather than having someone overseeing the entire process, he or she can jump in and tackle the exceptions that need attention (and spend the rest of the time on more important tasks).

• Shipping more loads with the same number of assets. When you optimize the above steps, you can effectively reduce transit times and ship more loads with the same number of vehicles or carriers. This can significantly reduce asset costs in a business world where transportation and equipment costs continue to grow year-over-year.

Freeing up cash. With all eyes on the bottom line in our current economic climate, having end-to-end supply chain visibility equates to shorter sales cycles and the ability to bill sooner for shipments (which, in turn, arrive at their destinations faster). This helps reduce the amount of cash that’s tied up in the business.

Reducing reliance on labor. When a plant, warehouse, dock, and/or yard are automated and running on high levels of visibility, the shipper’s labor needs can be reduced. It also means fewer “touches” on orders and reduced costs of physically moving assets. Because labor is one of the most expensive line items for any product-oriented operation, this can result in substantial savings and improved bottom lines.

In an era where transportation costs continue to rise, and with events like the global pandemic driving some carriers to introduce “COVID” rate hikes, companies need 24/7 insights into their transportation costs, fees, assessorials, and other charges. This is just one more advantage to having good end-to-end supply chain visibility, where access to data means being able to quickly identify and address inaccurate bills and invoices.

When you can prove that a carrier’s truck did not sit idle at your site for two hours, waiting to be loaded, disputing incorrect charges on an invoice—even 30 days later, when the bill comes—is pretty easy.

Your End-to-End Supply Chain Visibility Partner

IntelliTrans’ Global Control Tower provides high levels of supply chain transparency; aggregates, completes, and enhances data from a variety of sources; offers visibility into and execution of different aspects of the supply chain; and generates data-driven alerts and analytics that ask deeper questions and deliver meaningful insights.

By leveraging tracking information, the Global Control Tower provides analytics that measures key performance indicators (KPIs) like fleet cycle time, origin/destination dwell time, lane and hauler performance, back orders, freight spend, load optimization, and more. With their rate, equipment, lease, tracking, and invoice data in a central repository that’s accessible 24/7, companies can position themselves for success in any market conditions.

Thoughts on Visibility in the Supply Chain

Thoughts on Visibility in the Supply Chain

Supply chain visibility. Everyone in the transportation and logistics industry needs it. But there are many degrees of visibility in the marketplace. In-transit visibility, which is what is most commonly discussed and shows where goods are along the route from origin to destination, is only part of the picture.

What happens pre-transit? What’s happening at the facility – are they ready to load your freight? Just because a railcar or truck has arrived and is ready to be loaded, it doesn’t mean that the facility has the dock space to actually load it. When there is dock space available – how long did it actually take to load? And after the loading, what are the extra steps necessary before it leaves? For railcars, it could mean inspections, for trucks it might mean tarping for weather.  Many of these questions exist at the destination facility as well.

Another visibility aspect that is often overlooked is inventory visibility. How much product does my customer have, and how faster are they using it.  What is the status of inventory at the production location – Is it loaded onto a railcar or truck and then set aside, waiting for an order? Do you have certainty on the availability of that inventory – has it been assigned to an order already?  Is it really there, or just a reflection of data management issues?  If it sits too long on either side of transit will additional costs be incurred?

And finally, consider potential route visibility as well. Based on a railcar’s weight, it might be too heavy to travel certain routes. Knowing which routes are possible and which are not based on weight or other factors is another overlooked aspect of visibility.

It really does all boil down to getting the most complete, timely and accurate data that you can in order to execute flawlessly & perform continuous improvements in your supply chain. Without it – you’re only getting a small slice of the big picture.

Supply Chain Machine Learning

Supply Chain Machine Learning

The IntelliTrans analytical toolkit has evolved over the years from Access databases, Excel spreadsheets, Crystal Reports, and OLAP Cubes to dynamic dashboards and scorecards. All these technologies, however, have focused on understanding past performance.

One of the most exciting developments in data analysis is the rise of predictive analytics and machine learning. Now that we understand what happened and why, we have moved towards predicting what will happen and how to optimize outcomes based on those predictions. The shift in analytical focus from past performance to future prediction is a disruptive force shaping many industries right now.

Using machine learning models, we’re able to provide our customers with better foresight to drive supply chain efficiencies and cost savings.

Early Shipment Out of Route Detection

Our machine learning models are based upon our 25 years of experience, and these models ensure the railroad handling error is caught and resolved as soon as the car displays anomalous behavior – usually before railroads themselves detect an issue. This early detection results in substantial savings, increased car utilization, and improved on-time delivery.

Shipment Exception Management & Prioritization

IntelliTrans also uses our machine learning models to predict trip plans for each trip. Any significant deviation from this predicted plan is flagged for resolution by our operations team with the carrier, which ensures these shipments receive timely attention and resolution.

Dynamic ETAs

We provide dynamic ETAs using machine learning models based on numerous factors, including but not limited to weather, network congestion, and switch schedules. This functionality provides a high degree of confidence around empty car supply, on-time delivery and complete transparency of the predicted whereabouts of every rail car, allowing shippers to remove ‘padding’ from fleet sizes and delivery times.

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Fleet Sizing

We help customers optimize fleet size by simulating thousands of what-if scenarios based on probabilistic models. Proper fleet sizing minimizes cost and gives peace of mind that railcar supply is adequate to best serve the market.

Predictive Freight Cost Modeling

We provide accurate freight cost estimates for future shipments by utilizing machine learning models built upon our voluminous shipment and rate data. This enables our customer’s commercial teams to provide reliable quotes to their customers and our customers the ability to create accurate spend reports based on forecasted demand.

Bad Order Repair Duration

We help customers predict the duration of a bad order repair and incorporate that into our dynamic ETA so there is full ETA visibility of every railcar.

When is a Control Tower not a Control Tower?

When is a Control Tower not a Control Tower?

A Control Tower is not a Control Tower if it only provides shipment visibility. Claiming that shipment visibility is a Control Tower is like saying you only need radar equipment and you don’t need Air Traffic Controllers or the ability to have bidirectional communication with pilots. A true Supply Chain Control Tower means:

  • finding alternative ways to satisfy customer demand if a shipment is late.
  • utilizing detailed dock and yard information to prevent late shipments in the first place.
  • knowing your customer’s inventory levels and demand forecast to make your supply chain more resilient.
  • managing the challenges inherent in complex supply chains.

IntelliTrans has provided shipment visibility services since 1992, and our visibility platform remains a core part of our business today. However, we don’t stop with visibility, our Supply Chain Control Tower has integrated on-asset monitoring hardware, integrated mapping solutions, and proactive exception notice delivery to our customers and customers’ customers. If you want to take control of your supply chain and do more than look at your shipments, reach out to IntelliTrans. We have a team of experienced supply chain professionals leveraging mature processes and world-class technology ready to drive improvement on your behalf.

Reliable ETAs in a Changing World

Reliable ETAs in a Changing World

In today’s shipping environment, it’s tough to make accurate predictions on shipment estimated time of arrival (ETA); things like yard congestion, weather, service schedules, block size, and resources available compound unpredictability. This unpredictability is causing shippers to turn to freight visibility platforms now more than ever to gain control of their supply chains. In the age of Amazon, it’s not enough to be given ETAs from the outset, shippers need current data points and dynamic ETAs updated throughout the course of the shipment.

IntelliTrans has been innovating supply chain technology for over 25 years. For ETAs, we couple the most current data with historical data analysis on a route. When shippers view our dynamic ETAs, they are seeing the past, the present, and the predicted future. We provide intervention services to ensure complete and accurate data in conjunction with machine learning algorithms to find signals in noisy data, allowing us to discover systemic insights and provide more accurate information to our customers and staff.

If your service partners are not providing you with accurate ETAs, better visibility, and incremental value improvement then it’s time to leave them behind. Inaccurate empty railcar supply can lead to facility shutdowns that negatively impact customer relationships, so expect more from your Transportation Management System provider.

After all, if we can order a $10 gadget on Amazon and track it all the way to our front door, shippers should be able to gain the same level of granularity with their $100K+ asset loaded with high-value inventory. Don’t settle with the status quo because it’s easy; IntelliTrans is here to help you navigate change.

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