The technology solution for efficient global sourcing
Aug 25, 2010 Comments (0)
Producers and vendors in all business sectors are increasingly adopting global sourcing models for everything from raw materials to complex final assemblies. But global sourcing of supplies and components is not an automatic strategy for cost reduction. High fuel bills for every mode of transport, just-in-time supply constraints and rapid changes in demand levels place immense cost reduction pressures on sourcing.
In fact, without accurate tracking at each supply chain step, inefficiencies can quickly consume cost savings. When shipments from any part of the global supply chain are lost or delayed, the inevitable missed deadlines have a major negative impact. The result is inevitably missed deadlines, halted production runs, delayed product launches and lost sales. Such problems can destroy a producer's reputation and cause untold chaos for vendors who must explain to customers that temporary delays in a shipment, caused by systemic supply problems, have made them lose business. Such problems can damage any company's reputation and dramatically increase costs, all due to information snags, missing or ill prepared shipping documents, customs delays and inappropriate shipment routing.
Information technology with trace-back capability is essential in today's global sourcing infrastructure. Such computerized tracking must give businesses along the supply chain a common language to capture shipment information and history. The integrated information exchange platform must be usable across the supply chain, so information can be retrieved at any stage. In addition, the system must be designed for flexibility to many sourcing markets, taking into account the highly varied documentation and quality requirements of multiple customs regimes and related national security concerns.
A lack of information is the most preventable, and most costly, problem when it comes to inefficiencies in global sourcing. This lack of information can refer to incomplete or missing data about the status of shipments, an inability to retrieve data when needed, or an inability to adequately integrate systems. The result is a colossal amount of wasted time and energy spent chasing information which ought to be readily available, and lead to a systemic inability to identify and correct problems. An electronic tracking system eliminates exactly these problems.
Until very recently, despite advances, the technology to produce such tracking records had been incomplete at best. Common electronic information systems used to track product have included bar coding and Radio Frequency Identification (RFID). These systems employ identification tags that are printed or attached to the product packaging to differentiate each product batch. In some instances, these unique identifications are used within the supply chain to document various components and their assembly history. Such information can then be updated and passed along the supply chain to both final product assemblers and their distributors. But these physical tools in themselves do not facilitate state-of-the-art supply chain management because they do not generate either real-time or historical tracking data that supply chain efficiency. For that, they must be elements of a comprehensive electronic tracking system.
A comprehensive real-time electronic tracking database lets logistics personnel track orders as they cross the world, and catalog results that can be searched, displayed and made useful. Electronic tracking also eliminates inefficiency from physical keying of routing numbers and freight identification instead of using EDI (Electronic Data Interchange). The ideal program will show what has been shipped or is due for shipping, what is in transit, and how any given shipment is performing against the producer's timetable. Via links to the freight shipper's own information, logistics personnel should be able to cross-check and validate progress and timing of shipments. The entire system should be password-protected, encrypted and interactive. This allows the customer to authorize and initiate both the original transaction and any subsequent amendments, with the system providing written confirmation at each step.
The best electronic tracking is an intuitive solution that gives users "real world" search criteria to determine shipment status. That includes vendor or consignee identities, country of origin and destination, and most importantly a manufacturer's own purchase order and SKU codes. In addition to real time information, it also should provide historical data that can be used as a benchmarking tool for shipment performance.
Using electronic tracking systems to thoroughly check every link of a supply chain and make sure it holds can save enormous amounts of time, energy, and resources, and eliminate the high, hidden cost of supply chain inefficiency. Comprehensive electronic tracking solves supply chain problems by providing transparency and visibility to ensure that shipments arrive without delays or surprises. The end result will go right to the bottom line for companies at every step in the supply chain.
Simon Kaye is Founder and CEO of Jaguar Freight Services with offices in London, New York, Philadelphia, Paris and Hong Kong and an operations network in Europe, North America, South America, Australasia, Asia, Middle East and Africa. Jaguar Freight Services provides a fully integrated door-to-door freight solution including customs clearance, storage, and distribution facilities, and proprietary Cybertrax 2.0, real time online information tracking system.