How to Achieve a Competitive Advantage Through Supply Chain Engineering (Part 4 of 4)

Supply chain engineering (SCE) used to be simpler. You could stay the course with a strategy for years.

Technology has changed that.

The main SCE functions of collecting data, performing analysis, optimizing, and executing are the same now as they were in the past. The difference is that thanks to technology, these functions are performed faster, more often, and with more detail.

Top supply chain engineering technology considerations for today

Specialized expertise required

Optimizing transportation networks requires sophisticated SCE programs backed by experienced industrial engineers to achieve their full potential. An industrial engineer needs to have the methods and the means to maximize utilizations and output. Just having the right data and the right technology isn’t enough. It takes technical expertise and business experience to develop and successfully translate optimizations to operations and other groups.

Advanced SCE software

To do the job of SCE, private fleets or outsourced providers leverage sophisticated supply chain engineering platforms or proprietary software. Even enterprise-ready platforms require a heavy lift. The software is intricate and formatting how things are laid out is complex. You have to understand how each piece talks to the other pieces. For this reason, there’s a high learning curve and training on systems is extensive.

Significant investment

The cost of SCE software ranges from five to six figures per year depending on the capabilities required, number of users and whether the solution is custom built. There are often annual fees and fees for updates that are ongoing. The cost for hiring and training staff is also considerable. As a result, creating and maintaining an advanced supply chain engineering capability in-house is beyond the means of most small to mid-sized shippers – and many large shippers.

Essential partnerships

Third parties like dedicated fleet providers or consulting firms who provide supply chain engineering play a crucial role in filling talent and technology gaps. Shippers piggyback off a provider’s software subscription and leverage their engineering talent, thus avoiding CAPEX requirements and hiring costs. Ongoing updates and training are also outsourced.

The role of TMS

Advanced TMS feeds the SCE machine with data and essential functionalities. For SCE, you need a TMS that delivers the visibility for a robust understanding of end-to-end supply chain processes. Strong compatibility with existing TMS is a key consideration when shopping for SCE software or considering SCE partners.

Integration with operations

There needs to be a strong connection to operations that facilitates seamless data input and execution. Strong connections between SCE software, data and assets support speed, agility and efficiency in the supply chain. That’s the advantage of in-house SCE as well as a dedicated fleet provider that offers SCE.

Dedicated fleets provide the advantage of technology and integration

The reality is that the advantages of advanced SCE are largely out of reach for many shippers. The investment in technology and talent is prohibitive. That makes outsourced options the essential equalizer for small- to mid-sized shippers.

Shippers can look to consultants or 3PL providers for technology assistance, but integration between outside providers and operations are disjointed by default.

Of the available outsourcing options, a technology-enabled dedicated fleet provider like TA Dedicated provides single-source integration to realize the full benefits of seamless SCE.

10 Advantages of a technology-enabled dedicated fleet provider

1. Continuous improvement is perhaps the greatest by-product of having a dedicated fleet provider like TA Dedicated that provides SCE. The continuity of an assigned team of industrial engineers enables unceasing optimization. Integration with truckload services facilitates agile execution with no gaps.
2. Dedicated roundtrip flexibility and control outside the chaotic carrier bid-and-selection process. Backhauls present an unrealized opportunity for shippers with deadhead mileage representing 16.3% of all trucking, per ATRI.
3. No upfront costs for technology adoption, fleet and equipment upgrades, drivers, research and testing of fleet innovations, or onboarding.
4. Flexible fleet capacity from multiple sources that scales up or down to align with optimizations. Fleets easily integrate with existing TMS and other operating platforms to optimize performance and resilience.
5. Removing gaps between operations and engineering enables companies to quickly capitalize on opportunities and anticipate disruptions.
6. Control of driver capacity enables greater opportunities to optimize routing, utilization, service and costs. Meeting spikes doesn’t always mean more drivers and equipment. Sometimes having drivers work overtime is more beneficial.
7. Organizational coordination benefits from a holistic understanding of when and how much to pull supply chain levers. At TA Dedicated, engineers and pricing teams work together to find the optimal balance between rate, service and other priorities.
8. Better informed decisions come from offering greater insights to customers into costs and other impacts of potential scenarios. Forecasting also benefits through enhanced accuracy.
9. Disruption planning is enhanced by scenario analysis for anticipating potential changes such as seasonal port congestion or volume spikes. This facilitates responsiveness, often enabling capacity to be supplemented by additional logistics divisions.
10. Forecasting advantages are increased by the ability to look at micro timeframes such as week-by-week or day-by-day based on when windows hit historically.

Every supply chain is a unique engineering opportunity

SCE can take many forms and reveal many benefits. The scope of SCE applications depends largely on a company’s size, industry, and stage of development. The one commonality is the primary role of SCE in every shipper’s future.

Take a deep dive into what’s possible for your supply chain. Download the white paper, Supply Chain Engineering: Efficiencies and Optimizations for Fleet Operators.

To learn more about TA Dedicated’s supply chain engineering strategies and how we can help you meet your goals, contact us at 651-686-2500.