Author: Zach Warrick
Why Partnering with the Right Third-Party Logistics Provider Can Improve your Supply Chain Forecasting
Gartner lists supply chain forecasting as a primary barrier facing brands’ supply chains. Managing your supply chain is critical to the health of your business, and you ideally need any partnering provider to be a leader in supply chain forecasting. When done well, supply chain forecasting helps companies fulfill orders in a timely manner, keeps costs low, and keeps companies and consumers happy. All of which effect your business’s bottom line. The right 3PL should make accurate supply, demand, and forecasting data fundamental to the way they deliver logistics services. Let’s dive in to six traits to look for when selecting a strong 3PL partner:
1) Getting a 3PL that buys into deep logistics forecasting and invests in integrating and meeting those needs.
Deep logistics forecasting has become a necessity in today’s world. Accelerating volatility and complexity in the supply chain and beyond requires 3PLs to be streamlined and hyper-responsive to accurately forecast and effectively meet customers’ demands.
2) Preserving logistics forecasting into SLAs (service level agreements) and operational processes
Adding logistics forecasting into a business’s service level agreement and operational processes can reduce friction within the supply chain, from clearing customs shipping out of distribution centers, as well as create a safety net for potential supply and demand issues with consumers. Forecasting gives you the ability to anticipate your customer’s needs and complete customer’s orders as soon as you receive them.
3) Aligning forecasting with inventory management and capacity to remove supply chain constraints.
There are multiple benefits to aligning forecasting with inventory management and capacity. Inventory management becomes a much easier process. Stock shortages become less frequent, the amount of inventory you keep on hand is tailored to your consumer’s purchase patterns, and employee scheduling and labor costs are more effective to your bottom line. For many retailers, peak shopping season is on the horizon, and even large global brands are preparing for potential delays and stockouts.
4) Considering all transportation modes, network location design, and other factors as part of forecasting and distribution.
Transportation is the heart of forecasting and navigating both your supplier’s requirements via an expansive fulfillment and transportation network is a key ability to look for in a 3PL. In fact, optimizing supply chain networks can be a fundamental driver of cost reduction, making it a great core competency to look for in a logistics partner. Knowing your supply chain lead times, transportation modes, and patterns are key to knowing when to re-order inventory. Having multiple modes of transportation and multiple product manufacturers can turn severe supply chain issues into creative problem-solving opportunities.
5) Taking a continual improvement approach to refine logistics forecasting and supplementary activities.
Forecasting is a constant learning process that relies on reviewing you and your 3PL’s data on a continual basis. Continuous improvement creates smaller and smaller margin for error and a smooth, steady, and streamlined supply chain from end-to-end. This increases customer satisfaction and accelerates growth for your brand as well.
6) Using robust computer modeling and trend identification.
Using a robust inventory management system can streamline your inventory re-ordering process. Bringing data in via your sales channels and 3PL provider can create an accurate, data-driven picture for your inventory management system to develop an ordering solution. Identifying trends within your customer’s buying habits will give your team insight into order volumes and purchase times.
Conclusion and How GEODIS Can Help
Business strategy relies on solid forecasts of likely future supply and demand. Good modeling supports stronger, more confident planning and strategy. We describe three ways you can optimize your supply chain forecasting process, meeting customer needs while mitigating risk and preparing for future demand.
GEODIS is a worldwide transportation and logistics leader. We pride ourselves on being a data-driven, deeply integrated, customer-focused provider, with deep expertise in logistics forecasting and what that means to your bottom line.
Strong data management is at the heart of the services we provide. This critical information helps us realistically forecast logistics and supply chain needs based on the latest technology and battle-tested, robust modeling techniques. This means we can provide our own forecasting or effortlessly integrate with your existing tools.
Strong logistics forecasting means we are central to reducing your operational costs, increasing efficiencies, keeping your supply chain flexible, maximizing continual improvement, and aligning our services with your business strategy. Our investment in modern technologies and continual improvement means you can trust us to deliver. To find out how GEODIS can help you realize these goals, schedule a call with us today.
Want to dive deeper into effective, reliable forecasting or need a framework to begin forecasting? Read more in our whitepaper: Why Reliable Logistics Forecasting is a Fundamental Tool for Staying Competitive.
For more, check out part 1 of our forecasting series: Why Forecasting is a Fundamental Engine for Business Growth
Author: Evelyn McCarter