The collaboration between shippers, logistics providers, third-party providers, carriers, and freight brokers is what makes for a successful transportation operation. Whereas the use of multiple logistics platforms made it difficult to coordinate efforts, advances in technology have made it easier to streamline the shipping process. The benefits of supply chain collaboration leads to better relationships and higher profits.
Logistics Collaboration Explained
The modern supply chain is complex, and a single transaction can involve dozens of trading partners, systems, and shipping operations. Logistics collaboration enables data and information to be shared among partners, suppliers, carriers, and shippers. Parties work together to service a common customer. The cost effectiveness of collaborating on logistics is a major factor in why companies work together, as well as being able to provide better service levels. Because there are many parties involved in the process, a strong platform is necessary to be able to handle the complexity of the operations.
The sharing of knowledge, expertise with sharing of infrastructure and transportation vehicles helps to drive collaborative efforts. An example of a successful logistics collaboration is the European Food Network (EFN), which brough together several European food logistics companies. The companies share warehousing and distribution resources, which reduces costs.
Benefits of Logistics Collaboration
There are many benefits of logistics collaboration for companies, depending on the goals of their organization. Cloud-based quality management software brings suppliers, vendors, warehouses together digitally to improve operational efficiency and increase flexibility. By working together businesses can achieve the following:
- Lower Long-Term Costs
Logistics collaborations have long- and short-term benefits. Streamlined communication means that time spent on learning suppliers or shippers’ operations is reduced, which lowers costs. When shipping is managed correctly, gaps and delays are shortened. The collaboration of a shared digital platform consolidates and analyzes data to give everyone full access to sourcing and shipping operations.
- Improved Flexibility
Collaborative logistics enables businesses to have a more flexible approach in response to changes in the market or unexpected events. Sharing logistics resources allows businesses to adapt their operations to meet customer demand, no matter what the circumstances. This has become critical for small or mid-sized companies that do not have a large logistics infrastructure.
Supply chain visibility is an important aspect of logistics management that helps companies track the movement of goods and materials through the entire supply chain. Logistics managers gain more visibility with every transaction because data is ready available. Every partner is able to track each shipment along its journey. Customers demand the fastest and most affordable shipping, and collaboration in logistics can make that happen. Companies that invest in visibility find they have better decision-making about inventory, transportation schedules, and distribution channels, which increases efficiency.
- Minimize Risk
Supply chains are full of risk and being able to anticipate disruptions can be challenging. According to a Gartner survey, 80% of respondents at large organizations are changing the way they conduct business based on past disruptions. Companies are trying to become better prepared for the next events that disrupt their supply chain and minimize the cost impact. An all-encompassing, collaborative solution that provides real-time transparency allows all parties to have access to the most recent information. This makes it easier to identify risks and allows organizations to take action.
- Partner and Employee Retention
Using a digital platform to manage supply chain operations allows supply chain managers to have the best tools to be successful at their jobs. Suppliers and partners have a platform on which they can communicate and make important decisions, as well as full transparency into the process. Retaining supply chain managers is one of the biggest rewards of logistics collaboration as they are able to focus on strategic initiatives rather than be bogged down by processes.
- Better Customer Experience
When shipments are late, or products are repeatedly out of stock, customers may choose to do business with other competitors. Streamlining supply chain operations and sticking to delivery schedules gives customers more reliable service. This builds trust for the customer and creates repeat customers.
Why Do Companies Need a Collaborative Solution?
In today’s interconnected supply chains, most companies face challenges in their management. Many times, the activities and data reside outside the company making it difficult to leverage and effectively utilize available data. Without one central platform, engaging with all business partners becomes time-consuming. The ability to share and analyze data in real time helps an organization to connect with partners and achieve their goals.
Verizeal for Full Logistics Collaboration
If your organization is wasting valuable time and resources on collaboration, it is time to unify efforts and find one central solution. Verizeal allows your company to manage the entire logistics process with automated processes to optimize your supply chain. Our collaborative logistics platform helps to connect your employees with carriers, customers, suppliers and other systems to streamline shipments.