Supply chains finally have the C-suite’s full and undivided attention. Amid inflationary pressures and rising supply chain complexity, shipping leaders can utilize freight analytics to contextualize their operational challenges and inform internal stakeholders of the risks and costs associated with their transportation network ecosystem.
- From 2020-2021, mentions of “supply chain” increased by 412% during earnings calls among U.S. Fortune 500 chief executives (Reuters)
- On average, major supply chain disruptions lasting at least one month or longer occur every 3.7 years (McKinsey)
A heightened awareness at the top
Now more than ever, supply chain performance is under the C-suite’s microscope. The business impact of trading disruptions and operational downtime at the height of COVID-19 forced executive leadership teams to embrace the importance of maintaining an agile end-to-end supply chain. EY research, for example, found that 60% of C-suite executives say their supply chain’s strategic importance has increased since 2020.
Hindsight is 20/20. The pandemic taught shipping organizations that supply chain resilience is non-negotiable. Now, amid the inflationary pressures of our current economic environment, supply chain performance is anything but an afterthought.
E-commerce proliferation coupled with the rise of digitalization has amplified the supply chain into a top value driver. The operational benefits of integrating innovation like artificial intelligence, machine learning, IoT, blockchain, and prescriptive analytics within key supply chain functions are too impactful to overlook:
- Maintaining consistent on-time deliveries are table stakes for improving customer experiences, which can increase overall sales revenue by 7% and profitability by 2%
- Synchronized fulfillment and return processes help preserve brand loyalty and customer lifetime value at a time when it’s needed most. In 2022, 43% of customers switched products or canceled a contract due to poor service.
- Flexible just-in-time delivery capabilities are critical to minimizing out-of-stocks caused by rapid demand swings. During the pandemic, out-of-stocks associated with consumer panic buying accounted for nearly $3 billion in lost sales across 10 CPG categories.
- Real-time visibility across the end-to-end supply chain empowers shippers to pivot amidst unexpected disruptions and hand-off delays caused by severe weather events that cost transportation companies $3.5 billion annually.
However, while more organizations understand the ROI of supply chain digitalization, commitments to inserting more supply chain expertise inside the C-suite are still behind the curve. A 2022 Indago survey found that nearly 40% of enterprises lacked ample supply chain representation in leadership positions. Furthermore, Accenture’s Drive Your Own Disruption: Is Your Supply Chain in Sleep Mode? report found that most supply chain executives view their role as a primary support function (68%) rather than a competitive differentiator (48%) or business growth enabler (53%).
The findings were a microcosm of an overarching challenge faced by shippers across sectors. Although supply chain performance is top of mind for the C-suite more than ever, there’s still a lack of actual expertise in the room. In turn, shipping teams must be positioned to engage the C-suite with contextual insights relative to operational risk, cost allocation, and rate volatility on a continuous basis. Arming internal stakeholders with the right information at the right times is critical for effective value stream mapping that links the supply chain to scalable business growth.
This is where the applied adoption of freight market intelligence is worth its weight in gold. It simplifies the complexity of the ever-evolving freight marketplace, cutting through the noise by fusing historical and real-time data to generate actionable insights that help shape strategic and operational portfolios. Regardless of company size or sector, freight market intelligence is an invaluable asset for shippers looking to create well-defined executive reports that effectively inform the C-suite about the intricacies of their supply chain.
Implementing proactive risk mitigation strategies
The pandemic heightened the importance of having a well-defined supply chain risk management (SCRM) framework in place. McKinsey research estimates that significant supply chain disruptions now occur every 3.7 years on average, adding more urgency around supply chain risk for CEOs, boards of directors, and investors. Whether it’s a big-box retailer or a raw materials supplier, it’s clear mitigating supply chain risk must be a mandate in the eyes of executive leadership.
But it’s still important to remember that mitigating supply chain risk isn’t just about being well positioned to navigate the next global health crisis or Category 5 hurricane. For shippers, areas of risk permeate throughout every layer of the transportation network spanning from underperforming carriers and shifting capacity levels to unexpected spot market exposure. Operating proactively, rather than reactively, to identify and alleviate these risks during the transportation network design and implementation phases is critical to meeting C-suite expectations.
By integrating freight market intelligence tools at scale, shippers can leverage benchmark analytics and AI-enabled advanced forecasting to perform dynamic risk analysis for executive reports. These processes help uncover anomalies related to spot and contract rate fluctuations and year-over-year (YoY) network inflation levels — fostering clarity and confidence with robust rate performance assessments aligned to the unique risk profile of their transportation network ecosystem. With data-backed insights as their guide, shippers can then generate recommended response actions for executives that prioritize business-critical functions to mitigate hotspots before they cause irremediable damage.
Justifying costs with data-driven transparency
Effectively navigating shipping procurement and budgeting has always been a process based in precision and meticulous preparation. However, the socioeconomic headwinds of 2023 are further narrowing the margin for error when it comes to cost considerations. With budgets tightening and more uncertainty on the horizon, anecdotal reasoning isn’t enough to move the needle for internal stakeholders who aren’t ingrained in the day-to-day happenings of the transportation and logistics market. Considering there are millions of dollars on the line in every transaction, shippers need quantitative proof to justify procurement decisions, budget requests, and logistics costs with financially minded executives.
Let data do the storytelling. By incorporating benchmark analytics into executive reporting, shippers can deliver transparent insights on how their freight network is performing in comparison to the broader market — segmenting their analysis and reporting by fleet, region, duration, business case, and more. Leveraging either high-level or granular network performance assessments provides the right level of detail and context for different audiences, paving a clear path for impactful procurement strategies aligned to predictive forecasting, emerging trends, and seasonal shifts.
Freight market intelligence also serves as a reliable barometer for generating well-defined ROI assessments on targeted freight spend. Shippers can leverage market data to benchmark an incumbent carrier’s rates relative to current market rates, and contextualize its cost performance by adding service levels, contracts, and tender rejections into the equation. This detailed visibility into YoY cost savings relative to specific carrier partnerships helps build trust with executive leaders by proving procurement teams are positioned to refine spending processes and lower contract rates. Compounded at scale, it makes future budget increase requests more likely to get buy-in from finance and leadership alike.
Hitting the supply chain accelerator
The C-suite’s interest in supply chain resilience will only continue to rise as market volatility persists. The time is now for shippers to arm themselves with resources that amplify their executive reports to new heights. DAT iQ’s full suite of freight market intelligence offerings is designed to empower shippers with unrivaled and impactful business insights on rates, capacity, performance, and more. Comparing your network against hundreds of leading North American shippers with more than $35 billion in annual spend, our products generate a 360-degree view of the freight marketplace via intuitive dashboards that take the uncertainty out of transportation.
Contact us today or visit our website to learn more about how DAT iQ’s dynamic freight market intelligence data fosters clarity and confidence amongst organizational leaders.
The post Shipper iQ: Leveraging freight market intelligence to engage the C-suite appeared first on DAT Freight & Analytics – Blog.
