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Establishing an environment of end-to-end supply chain visibility leads to more efficient manufacturing, lower costs and fewer incidents of a mismatch between supply and demand. In implementing that visibility, companies look at everything from sourcing raw materials, to manufacturing, to supplying the sales channel with finished product. However, a frequently missing component in a supply chain visibility strategy is transportation management, or the not-so-simple act of getting finished goods and raw materials from one location to the next.
With increasingly tight margins and higher freight costs, even small supply chain oversights can cause unnecessary expense, in terms of scenarios like product write-offs or write-downs that may occur as a result of an oversupplied sales channel, missed sales opportunities due to an undersupplied sales channel, or higher-than-necessary costs due to a failure to monitor raw materials prices across multiple sources. But beyond that, the biggest "hidden" cost of a poor supply chain is transportation — and the cost of getting goods from one place to another may well mean the difference between profit and loss. Management of freight costs, especially in a large enterprise, becomes extremely important, and the connection between visibility of freight as a component of the supply chain, and the transportation economies that can come as a result, quickly becomes apparent — and in a low margin business, transportation economies are a vital component of establishing profitability.
Visibility isn't just a buzzword...