Data-Driven Shipping Operations
For manufacturing and distribution companies, effective use of data is imperative for streamlining shipping operations. The top competitors no longer shuffle paper and jamb phone lines to initiate and track shipments. They use data-driven processes to streamline their workflow, increase profitability, and to improve service to their customers.
Read on to learn some of the key factors to consider when seeking to effectively use data to improve your shipping operations.
Shipping operations utilize a variety of data types to initiate and track materials movement. Details may vary depending on the type of operation and material shipped. However, the general flow of data supporting shipping operations is fairly consistent. While other types of data may be involved in the business, this article focuses only on types of data used for shipping, that have an impact on shipping, or that shipping can impact.
Customer needs prompt demand for material movement.
- Sales Orders: When customers place orders, they specify what they want, how much of it they want, and when they want it. When this information is collected digitally, the system can prompt the customer to provide all of the information necessary to prepare the order accurately. Phone and paper form ordering allows much more opportunity for leaving out critical information and for entering erroneous information.
- Packaging Requirements: Packaging requirements may be fixed or optional. For example, product warranties or government regulations may require certain specific packaging and handling instructions. Conversely, customers can specify the premium packaging of purchased goods.
- DeliveryRequirements: Customers may request specific delivery terms, for example, specific unloading location or acceptable range of delivery times to accommodate the availability of handling equipment.
Collecting and disseminating the incoming information digitally improves order accuracy and allows easy recall and display exactly when needed.
Upon receipt of the sales order, complete with packaging and delivery requirements, you are set to prepare and ship the order to its final destination. Ensuring smooth packaging and shipping operations requires accurate communication of customer requirements (incoming data) and outbound information (outgoing data).
- Planned Shipment Schedule
- Permits (when required)
- Shipping Method, i.e. carrier(s)
- Environmental and Safety Documentation, for example, MSDS (Material Safety Data Sheets for chemicals)
With a data-driven shipping system, you can provide the customer with the most (if not all) of this data and information before the order is shipped. This practice helps the customer plan their business around the shipping schedule without the need to chase the details by phone or paper (i.e. fax).
Schedule Updates – Using a data-driven system, you can automatically alert the customer at key stages of the shipping operation. For example, the customer may receive alerts when the shipment departs the facility, at key points along the route, and at arrival. The customer can also receive alerts at various stages of product production and preparation for shipping. Alternatively, you can configure the system to allow the customer to check the status of their order at any time by accessing the real-time process tracking information. This can be particularly useful in situations where the customer provides 3rd party oversight into any aspect of the production or logistics operations.
Tracking Movement (geographic data) – Use of GPS, coupled with shipment location tracking software, the customer can access information to understand the location of the shipment at any time. This not only helps the customer plan for shipment arrival, but it also reduces the time the shipper spends fielding customers’questions about delivery times.
Accounting data, such as invoicing and payment data, indirectly affects shipping operations. When accounting information is inconsistent with material delivery, the entire operation experiences interruptions to normal activity.
Using integrated digital databases reduces the risk of input errors, and the time spent correcting errors or explaining inconsistencies. A data-driven system can adjust inventory automatically as the material is transferred to fill a shipping order. The customer’s digital signing of material receipts can trigger automatic invoice generation. Also, the system can be configured to allow customers to make payments online. This entire process can be managed without processing paper and dealing with the delays inherent in processing hard copies.
Importance of Data Accuracy
The importance of data accuracy cannot be understated. Inaccurate data inevitably leads to inefficiencies of material movement. Every entry point provides an opportunity for data entry errors, and duplicate entry of the same data compounds the risk.
Competent IT professionals design systems to reduce the risk of data entry errors. This may include a single point of entry for all data and the elimination of human interface with data entry operations. For example, combining barcoding, robotics, and scanning technology can eliminate human interface for inventory management.
Data Availability and Communication
Data availability and communication, along with data accuracy, are key to streamlining shipping operations. Ideally, a system provides customers and involved 3rd parties with access to data that indicates the status of orders. Additionally, systems should provide alerts to interested parties at key stages of shipping operations.
A well-integrated modern system will provide dynamic forecasting, automatically distributing schedule updates both internally and externally. This helps all personnel involved remain prepared for material movements that affect their business and individual functions. For example, distribution centers receive regular updates on production forecasts from manufacturing. Similarly, the shipping department receives regular updates on inventory changes from distribution centers, and 3rd party shippers and customers receive regular updates on material availability and material movements from the shipping department.
In addition to receiving automatic updates, personnel involved with shipping operations benefit from having data available on demand. The better systems allow approved users to view order status as the orders progress from production through delivery.
Use of Software to Enable Efficient Shipping Operations
In the sections above, we discussed the types of data needed to support efficient shipping operations, and the importance of data accuracy, availability, and communication. Understanding the importance of these concerns to shipping operations, how do we achieve these goals?
ERP (Enterprise Resource Planning)tools provide a comprehensive solution to seamlessly connect manufacturing, distribution and shipping processes seamlessly. ERP ensures all of the data exists on one platform, accessible by all who use or contribute to the database. This solves the problem for a single point of data entry and also for making the data available on demand to all who need it.
Continuous Process Improvement
As discussed above, ERP software solutions provide a platform for collecting and disseminating essential data. Additionally, ERP solutions enable assessment of operational effectiveness and provide insight into areas needing improvement.
Consider, for example, bottleneck exercise aimed at improving the overall production rate for a specific line in a manufacturing facility. Analyzing the relevant data contained within the ERP system can pinpoint the bottlenecks. Historically, this debottlenecking operation required physical auditing of processes to obtain data for analysis. Unfortunately, this auditing exercise is only a spot check, which more likely than not was impacted by the presence of auditors. Hence, the quality of available data is suspect and has limited utility.
Conversely, consider that an ERP system provides full-time data collection, making auditing available on demand, using a complete data set. This process promotes more accurate trend analysis and problem detection. Focus can be placed on the areas where change can produce the greatest impact, improving overall product flow.
Computerized data analysis is only one part of the equation for improving shipping (or any other)operations. You also need to use information from people and data that cover the entire supply chain spectrum. Data analysis tends to isolate problems into a specific area or limited range. Nothing replaces conversations. The best solution is a hybrid of data analytics and human correspondence.
This blog post was written in collaboration with SalesPad. Learn more about SalesPad at salespad.net.