A tracking solution can have a significant impact on inventory management. Indeed, these solutions give access to real-time visibility on intercontinental maritime flows. It retrieves hourly information on the location of goods in transit and alerts in case of unexpected events, delays etc.
Today, one of the key issues in logistics transport is stock management. In order to ensure that you never run out of stock, or have too much inventory, it is essential to ensure reliability in the flow of stock in transit and security.
The complex environment with saturated shipping and a shortage of containers alters the good management of stocks for cargo owners. This context causes overstocks (safety stocks are oversized to compensate for delivery uncertainties due to poor visibility and lack of control over transport flows), high stock in transit (when there are long supply lead times) or stock shortages (linked to poor control of the supply chain or too long lead times). Improving visibility of flows allows for gains in day-to-day management and in the strategic choice of routes.
This article aims to highlight the benefits of a real time tracking solution on the management of transit and security stocks.
Indeed, the more time goods spend in transit, the greater the risk of loss, stock-outs and customers not being delivered on time. A tracking solution can have an impact on reducing transport time. Mechanically, if it is reduced, the time the goods travel is reduced and therefore the stocks in transit are decreased.
Reducing stock volume through performance benchmarking
To achieve this, the tracking solution must have an impact on lead time reduction. The tracking platform collects data in real time but above all builds up a history of data to identify the best routes. This data is then exploited on a large set of flows to benchmark performance. We compare shippers, routes and make an arbitration of the most efficient (lead time, delay in arrival etc.)
Safecube worked with Arkema to carry out a flow diagnosis and identify areas for improvement in its US/France flows. We were able to identify flows with very short and stable lead times and update the supply times in their system. This enabled them to be more reactive in their replenishment and therefore to have less stock in transit in their system.
Acceleration of flows by optimising piloting activities
Another way to reduce the stock in transit is by optimising the actions on the daily management part. The tracking solution allows, through an alert system, to be quickly informed of arrivals, delays, or modifications of ETA. Stakeholders can anticipate the arrival of goods and inform the right people at the quay.
Michelin shipments transited by Chicago with Safecube solution reduced it’s in transit stock thanks to the analysis of transit time. The anticipation of the train’s arrival and synchronization with the routing station help to anticipate the reservation of the last section truck.
It allows identifying 2 days delay between the actual arrival of the shipment in Chicago port and the information provided by the freight forwarder. Then, container unloading events in Chicago rail station were received real-time vs 40% with a delay of 1 to 8 days before.
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Making flows more reliable to reduce safety stocks
A tracking solution gives more visibility on current stocks. This reliability provides transparency and trust to reduce safety stocks. Arkema, by better controlling its replenishment flows, has reviewed its stock policy and reduced its safety stocks.
The data collected by the monitoring solution allows planning parameters to be updated. The diagnosis of flows based on concrete data allows the planning team to check whether the theoretical parameters are correct. This has a major impact on the safety stock policy.
To conclude this explanation, stock management has been largely impacted by a complicated maritime context. Visibility on flows is now a key element to reduce transport times and therefore stock in transit. It is obvious that the impact can be as much on the day-to-day management as on a more upstream phase on the design of the transport schemes.
Real-time tracking solutions such as Safecube’s are now becoming a must-have for the « tracking » feature. It is important to realise that it now brings significant gains in other areas such as stock management.
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