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Managing a supply chain can be a daunting challenge, especially for companies with global operations. How much demand will there be for particular products over time? Which regions of the country or the world will demand come from? How much raw material will be needed to make finished products? What are the most efficient and cost-effective transportation modes and routes for product shipment?

Those are just a few of the supply chain questions organizations have to grapple with on a regular basis. Knowing the right answers isn’t always possible. But gathering the necessary information to make the most-informed decisions about supply chain matters can help organizations improve efficiency.

Many available technologies are geared toward helping organizations manage their supply chain execution. Here are few examples that address specific supply-chain functions:

Controlling in-bound freight — When ordering materials from suppliers, companies have often relied on the suppliers to select the shipping mode, which can lead to significantly higher freight costs, says Ian Hobkirk, senior analyst, supply chain execution, at Aberdeen Group. “If the supplier is not paying for freight [it has] no incentive to do it the most efficient way,” Hobkirk says.

The trend is to dynamically route inbound freight using a combination of transportation management software (TMS) and electronic data interchange (EDI), Hobkirk says. TMS enables organizations to manage the use of all types of carriers, including ocean, air and rail. Companies can use these applications, with data input from suppliers, to track various aspects of transportation, including routing, mapping, carrier selection, fuel costs and other areas. By actively managing inbound shipments and automatically choosing the most efficient carrier and routes, they can reduce costs and improve logistics efficiency, Hobkirk says.

Improving visibility — Knowledge of where goods and assets are in the supply chain at any time, and what events are going to affect the future movement of that inventory, is something many organizations are striving for, Hobkirk says. If companies have current information about a delay in a ship’s progress across the ocean or a bottleneck at a port, they can make timely decisions about how to respond.

“Once they have visibility, there is no limit to what [they can] do with the data,” Hobkirk says. “They can make better decisions about sourcing and use the best possible mode and carrier.” Aberdeen has identified 10 different technologies that can improve supply chain visibility, he says. These include global trade portals, EDI, TMS and supply chain visibility software that gathers data from a variety of sources in the supply chain.

Managing transport costs — Many companies host a tedious annual bidding process to procure transportation at the best available rates from carriers. They also use time-consuming manual processes to audit all freight after shipments to ensure that carriers are not overcharging. Now these previously distinct processes are being combined into one, managed by a process called closed-loop spend management. All transport-related data is mined and analyzed using business intelligence tools, so companies can know exactly how much they’re spending on shipping and feed that data back into the procurement process to ensure optimum rates.

Optimizing shipments — A relatively new category of software called distributed order management automatically determines the best facility from which to fulfill a customer’s order. Decisions are based on factors such as which facility can get the order to the customer most quickly or most cheaply, and which facilities have the most-suitable product available, Hobkirk says. The application “manages a complex set of fulfillment rules to make the best possible use of a network of distribution centers,” he says.

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