Order management software is critical to improving supply chain processes. It's especially vital to making smarter inventory and shipping decisions that are grounded in data. By installing this software, organizations can tackle some of their most complex and intricate challenges. Less-than-truckload shipping is one of these constant issues, which affect virtually every supply chain in some form. Order management software can help enterprises make better LTL shipping decisions, build communication with supply chain partners and leverage this key aspect of supply chains for higher ROI.
LTL shipping is a key part of supply chains, but it is often overlooked. It faces a different slate of challenges than bulk and exclusive shipments. Its cost-effectiveness stems from lower overhead and more expansive range of accessory services, but ineffective management can reduce the gains that enterprises could otherwise realize.
Inventory routing, business relationships and performance analysis are just a few of the many factors that can have a negative impact on LTL shipping, and in turn the supply chain that commissioned the shipments. Order management software can help alleviate issues in these three key areas. Here's how:
How order management enhances LTL routing
Many companies lack comprehensive order visibility, especially when multiple locations and/or suppliers are involved, or when inventory is moved around fairly quickly. LTL shipping can exacerbate these issues, as orders may be broken up or shifted around at a faster pace. As Go By Truck News stated, the need for granular oversight, ability to make changes and capacity to track performance only intensifies with LTL shipping.
"Unlike full truck load carriers, LTL carriers consolidate and move multiple shipments with different origins and destinations," the source stated. "Then at each hub, truckloads are broken into shipments and reconsolidated into new truckloads. These tasks are typically performed manually and by intuition, which further complicates planning and scheduling and often results in wasted time and resources, as well as lost profit."
Order management software can help improve LTL routing in a number of ways. It provides better inventory visibility, offering a repository where information can be stored and updated in a comprehensive manner. This increased visibility leads to more effective and accurate product deliveries, strengthening relationships with supply chain partners and improving customer fulfillment. Since orders can be tracked as they move around multiple locations, companies can understand how their LTL routing processes operate and make targeted changes for optimization.
Order management improves B2B interactions
LTL shipping involves complex relationships that must be formed between vendors, brokers, carriers and other third-party logistics providers. There are hierarchies that naturally exist in these supply chains - brokers and third-party logistics providers viewing as LTL shipping as less important, for instance. However, this traditional order is starting to break down, as organizations recognize the importance of consolidating all the logistics concerns in their increasingly massive supply chains, according to DC Velocity. Instead of being seen as merely "transactional," logistics partnerships are increasingly regarded as "strategic." Organizations have realized that they need to develop their engagement and interoperability with other supply chain stakeholders.
Order management software gives these companies the tools to improve the key processes that supply chain stakeholders must collaborate on. Companies may have been operating in relative isolation, providing just enough information to another partner to get the job done. This means that information could be lost or mutated along the way, throwing off key inventory management and tracking capabilities. In many cases, organizations in the LTL shipping sector simply don't have the resources to participate in a comprehensive communications and collaboration effort.
However, order management software provides a unified system that stakeholders can easily use to input information, make changes and note any extenuating circumstances that could disrupt the original plan. The system can also be scaled to accommodate the capacity of each LTL shipping stakeholder, ensuring that they have access to compiling and sharing all pertinent information.
Performance analysis with order management software KPIs
Many organizations regard LTL shipping as difficult to optimize. In many cases, this view stems from a lack of key performance indicators and any ability to evaluate how LTL processes affect the overall system functionality. This may hamper an enterprise's capacity to enhance cycle times, order fill rates and customer service efforts. Legacy systems aren't designed to impart this level of real-time oversight, because far-flung stakeholders - especially mobile ones - weren't equipped to offer this sort of information in any extensive or constructive way.
With order management software, businesses can develop performance metrics that evaluate how LTL shipping functions as a part of the larger supply chain. Through the lens of inventory availability, warehouse tracking, customer fulfillment and other operations, companies can see how close actual performance matches up to the ideal. Overall, giving supply chains more visibility into all aspects of shipping, from massive bulk freight to LTL, is a significant step toward optimization.
If you liked this article, check out others from Lightwell:
- Addressing retail complexities through streamlined order management
- Top ways to improve customer satisfaction through your order management system
- Justifying an order management solution: An ROI guide