Unraveling the Complexities of Manual Operations
Even in our digitized age, a significant portion of supply chain operations continues to rely on manual processes. These range from tasks as seemingly straightforward as checking the seals on shipping containers to more complex operations like transferring risk between parties.
Although these activities may sound simple on a small scale, they become exponentially more challenging as volumes increase. For instance, when dealing with 50,000 containers, the process of ensuring the integrity of each seal requires a small army of personnel tirelessly inspecting containers throughout ports. Likewise, risk transfer processes involve physical paperwork that consumes valuable time and resources, leading to inefficiencies and the potential for human error.
The Hidden Costs and Delays in a Non-transparent Supply Chain
When a shipment gets damaged, a non-transparent, manually operated supply chain struggles to determine responsibility quickly and accurately. This leads to time-consuming investigations and potential inaccuracies, causing additional costs and delays.
Moreover, discovering the damage only after the shipment has arrived at its destination compounds these problems. A notable example of this was when a delay in the delivery of Bluetooth chips for automotive audio systems led to a manufacturing plant lying idle for months. Such delays can cripple an entire production line and result in substantial financial losses.
Carbon Emissions: The Unseen Consequences of Manual Labor
As the world becomes more environmentally conscious, logistics companies are under growing pressure to reduce their carbon footprints. Beyond the direct CO2 emissions from shipping vessels, human labor, often overlooked, contributes significantly to a company’s total CO2 emissions. The indirect emissions related to an hour of human labor (including factors such as sleep, food, commuting, heating homes, etc.) substantially increase the environmental impact of logistics operations.
Research is needed to quantify this impact accurately, but it is clear that reducing manual labor through increased supply chain visibility could substantially enhance a company’s sustainability efforts.
Unlocking the Benefits of Improved Supply Chain Visibility
Enhanced supply chain visibility brings a plethora of benefits to the table, particularly for large manufacturing plants. Detailed cargo tracking and precise arrival time estimates can result in significant savings. It allows for efficient warehouse management and ensures that vehicles do not waste time and fuel idling in queues, waiting for loading or unloading.
Major corporations are already capitalizing on these advantages. Coca-Cola, for example, adjusts delivery truck schedules based on real-time loading/unloading updates, thereby minimizing waiting times and reducing emissions.
Additionally, improved visibility can contribute significantly to reducing product waste, a key concern in the logistics industry. Approximately 2% of goods are spoiled during transportation. When extrapolated over thousands of tons of products, this seemingly small percentage amounts to a significant loss. Enhanced visibility enables quicker responses to potential issues, thereby reducing the risk of spoilage.
In essence, the need for visibility in the supply chain is twofold:
1. Automation for cost reduction and increased throughput: This aspect becomes particularly crucial during crises, such as during a pandemic when ports may face staff shortages due to illness or quarantine measures.
2. Reduction in product waste and losses for both shippers and receivers of goods: When a shipment is delayed, the consequential losses can far exceed the cost of the goods themselves.
Therefore, improved visibility in the supply chain is no longer a luxury but a necessity for modern logistics companies.
Thank you for reading. Please feel free to reach out to me directly at alexa@moeco.io with any questions or comments. I look forward to our future discussions.
Moeco