5 Ways To Optimize Supply Chain Management With Location Intelligence
Melissa AU Team | Australia, Location Intelligence |
Managing cargo movement is one of the most critical aspects of maintaining a smooth supply chain. Whether you’re sending cargo from the warehouse to a store or delivering customer orders, you need to make sure that deliveries are made on time.
If your stock doesn’t reach stores in time, you might miss out on sales. If orders are delivered late, you might lose customer’s loyalty though they love the product.
To predict practical delivery timelines, you need access to reliable geospatial data. This refers to knowing where your cargo is at any given point of time and pinpointing delivery points.
Most bottlenecks and delays occur at nodes like ocean terminals or customs and distribution centers. Your ability to foresee these disruptions and plan solutions for them could be the difference between happy and unhappy customers. Having reliable location data also helps you plan your cargo movement for operational efficiency.
What Is Geospatial Location Data?
Geospatial location refers to the latitudinal and longitudinal coordinates of a street address. For example, “1285 Limer Street, Atlanta, Georgia, 30303” can be converted to Latitude 43.699792 and Longitude -73.985513. This can be pinpointed on a map for clearer visualization.
Here are 5 ways to optimize supply chain management with location intelligence.
1. Ensuring Timely Deliveries
Being able to track consignments accurately and consistently helps make accurate delivery predictions and ensure that these timelines are met. It’s better to tell a customer an order will take 3 days to be delivered rather than promise one-day delivery and then not be able to stand by it. According to a consumer research report, proving timely deliveries incentivized 61% of consumers to stay loyal to the brand.
Pinpointing cargo location helps last-mile delivery agents find their way to pick-up points and then select the best route to the order destination. This becomes important in cases where apartments and societies may have more than one entrance or where buildings may not be numbered chronologically. Location data can also be leveraged to reduce driver idling time. The agent closest to the pick-up point can be assigned with the delivery to save time.
2. Route Optimization
From traffic jams to storms, there are many factors that could cause delays. Logistics companies need to be able to foresee such disruptions and plan alternatives accordingly. Of the many routes possible, they must be able to choose the shortest routes as well as alternatives in case required.
For example, let’s say you get to know of a mile-long pile-up on a highway on a delivery route. If you have the exact location of your vehicle carrying the cargo and the delivery point, you can choose an alternative route that bypasses this traffic jam. Choosing routes with location data becomes even more important when the agent has to make multiple deliveries.
3. Improved Agility
Having access to reliable location intelligence helps businesses make quicker decisions and stay agile. Let’s say a customer calls with a request for express delivery. Rather than make a guess, customer service agents can quickly determine the feasibility of making such a delivery.
If an order is held up at any point, logistics managers can quickly take alternative action and inform the customer. While the customer may not be happy with the news, they will be more comfortable being kept in the loop and knowing when to expect delivery rather than having to wait without any knowledge of the delay. This reduces the risk of potential refunds and helps improve the level of customer service offered.
4. Controlled Costs
Along with ensuring that deliveries are made on time, logistics managers must also make sure they are made in a cost-efficient manner. Once again, location intelligence can help. It gives businesses visibility over expenses and helps identify opportunities for savings.
For example, being able to choose the shortest and quickest route helps make more deliveries per day and controls fuel consumption. Further, it helps fleet managers make informed decisions in case of expected delays and thus reduces associated costs. For example, if a fleet manager has advance knowledge of a storm and reroutes cargo to bypass the troubled area, they may not have to worry about driver overtime.
5. Demand Modeling
Part of running smooth supply chain systems is ensuring that warehouses and distribution centers are located in the right places. There’s no use in having a warehouse in Delhi if your maximum deliveries are being made to customers in Mumbai.
Knowing where your customers are and their location data helps with reporting and demand analysis. This type of modeling helps businesses plan ahead and calculate production volumes as well as set up distribution centers where they will be needed the most.
For example, if the demand for dairy products is higher in one location, positioning a cold storage warehouse in that area helps meet customer needs while reducing last-mile distances.
Accessing reliable geospatial data
Now that you know the many ways in which location intelligence can optimize supply chain processes, you need to understand how to get reliable location intelligence. There are 2 aspects to this.
You need the ability to track cargo when it is on the move and have access to accurate delivery point addresses. Cargo can be tracked with the Internet of Things (IoT) devices, geo fencing, RFID technology or barcode scanning at check-in and check-out nodes.
When it comes to street addresses, you need to integrate an address verification and geocoding solution to your supply chain system. This performs multiple functions. Firstly, it ensures all addresses entering the system are validated against third-party databases to be accurate and deliverable.
Any missing information such as pin codes or street names can be added to enrich the data and make sure it is complete. The address format is then standardized to match your system and converted to latitudinal and longitudinal coordinates for map positioning.
With this information, your supply chain managers are equipped to make data-driven decisions to optimize logistics flow and ensure timely deliveries.