· AUTHOR: BERND MOSBRUCKER, CEO · GLOBAL MANAGING PARTNER

RELAUNCHING GLOBAL CONNECTED SHIPPING IN A DISRUPTED SUPPLY CHAIN


In modern supply chains, you would say, it is all about speed. Now, based on the impact of the pandemic, we saw how fragile and severely impacted these networks are.

Relaunching Global connected shipping

Supply chains have evolved and became global over the last decades. Today the demand for cargo services and the need to (re-)organize logistical connections is becoming a central aspect for success as relaunching markets and production after the COVID 19 lockdown is not just about procuring services but to organizing the interrelated aspects of logistics like mode, capacity, equipment availability to name a few. The cost impact based on increased freight spend for shippers is huge and certainly, there is the opportunity and need to reconsider previously established operations and partners.

Companies have already been challenged in the past to balance the interdependencies between freight spend and on-time delivery. Therefore, the importance of container shipping has been constantly increasing over the last decades. But at the same time, we can see in these weeks, how fast flexibility needs and supplier channels have forced many companies to move freight from ocean to air cargo. What a major impact!

To address the increasing volume of overseas shipments in the pre-covid-19 past, ocean liners were building bigger and eco-friendly vessels and repositioning of containers alone is currently a major thread to functional sound logistics networks. Ports have to adjust to the new requirements of handling bigger vessels like we see in Germany with the Port of Hamburg, where for 20 years the deepening of the waterways to the port was subject of courts and environmental protection initiatives – so even besides the planning and operational complexity, global logistics is a connected and networked challenge. All those activities are expanding the global transportation network and informational need, which can only be addressed with increasing digitalization and collaboration. But it is still a great opportunity for improving of companies’ individual routing options for multimodal shipping and global fulfillment.

From a shipper perspective, the challenge has always been to ship goods across the world by ensuring on-time delivery and still keeping the transportation cost in the budget. Accurate and efficient contracting of capacity from ocean liners is becoming more and more important.

Procurement of ocean shipping services is the activity of sourcing and procuring not only the best ocean freight rates but also the best shipping services and now also information amongst the various carriers available in the market in line with the requirement of the shipper and consignees of the goods. Routing options through the transportation network considering different modes of transports for the drayage carriage and alternative ports of loading and unloading for the deep-sea ocean leg are driving cost savings for transportation and digitalization. They adress the need for fast, reliable data and resilent supply chains.

Demand and supply forecasting data is typically only the initial point and the foundation for shipping service procurement, in short, shaping your network. With that data, a rough transportation plan can be generated well ahead of the time of operations, based on strong and collaborative digital communication between partners, authorities, and customers.

Adjusting the transportation plan with new information such as confirmed and updated transportation demand or shipping dates is a mandatory requirement. The originally unconstraint demand can be reflected in sales and operations planning, influence manufacturing, and establish a synchronized supply chain. Changes in respect to quantity, quality, and shipping dates are occurring all the time triggered by many influences. Not only that forecast information is certainly never 100% accurate, but also the performance of production has a huge impact on the planned shipping volume, packaging, cross-docking operations, something changes routing completely. This fact illustrates why planning is a central component in today’s managing of global supply chains and is at the center of all logistics operations. Planning happens not only before execution. Planning is the consistent heart of synchronized operations and digital processing. Execution should be continuous planning.

Even during the execution process changes can occur that require re-planning. Missing cut-off times at the port of loading, delays caused by weather, or other factors have a major impact on subsequent transportation activities. The capability of unloading the ocean container at the final destination and return them to the freight network is crucial.

Especially in the last months we have seen how important the capability is to adjust plans dynamically to new situations but also to rely on real-time visibility across the whole supply chain. Communication and transparency in real-time across all involved business partners are key.

Changing routes of vessels, container shortages at ports and freight stations have forced shippers to react and find new routes through their transportation network. This also includes the communication of those changes to their ocean liners and in some cases even awarding a new ocean liner/drayage carrier to execute the shipment.

Currently, we look mostly towards freight forwarders to address the need to solve the logistics puzzle of providing empty containers across the ports around the world. Asset visibility across the network can even influence sourcing decisions and for sure, best cost alternatives, only driven by container shortages in ports.

State of the Art digital platforms such as SAP’s S/4HANA, SAP IBP, and SAP TM are supporting the overall process from forecasting the transportation demand, communication with all involved Business Partners towards delivering the goods to end-customers considering all modes of transports. Collaboration with business partners via networks enables sustainable data exchange and SAP Transportation Resource Planning and SAP Logistics Business Networks, an end-to-end logistics platform, is designed to address the challenges described.  Integration between the digital core SAP S/4HANA e.g. through Logistics Networks SAP LBN enables seamless collaboration between all business partners in real-time. Digital operations for demand and logistics forecasting and S&OP based on SAP IBP can be very successful and flexible solutions to address to the core challenges described above.

Please connect with us, to learn more about our successful examples and customer references benefiting from our industry experience and SAP's platform approach – wich allows creating ROI driven and strategic innovation initiatives. This comes based on our BEEMACS IGNITE for SAP Logistics value packages, which are process-oriented and best-practice grounded for your success. Visit us on our website www.beemacs.com or contact us via sales@beemacs.com.

MORE ABOUT THE AUTHOR


BERND MOSBRUCKER, CEO
GLOBAL MANAGING PARTNER

 

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