Efficiency at the sharp end: marginal gains in the logistics sector

Simon Kearsley
22 May, 23

Few sectors understand the need for efficiency like supply chain and logistics operators. Indeed, the whole business model is built on eking out small improvements which combine to a greater effect.

Many of these are well understood and documented: reverse logistics where delivery vehicles remove waste on return leg journeys, process automation, inventory management and an embracing of various technological solutions.

Yet, for all the focus on operational effectiveness and efficiency we don’t always find the same focus on non-core back-office functions such as accounting systems. Here a more ‘make do’ approach can prevail which runs counter to the DNA of organisations which rightly have inefficient practices in their crosshairs.

Logistics companies’ accounting function today holds much more responsibility than simply handling quotes, billing, or invoicing. Just as sophisticated logistics software provides managers with complete visibility of the supply chain, today’s accounting software can provide a holistic view of advanced operational data. This can be invaluable in giving organisations the insight they need to react quickly and identify efficiencies to mitigate ongoing challenges.

Unlocking resource

Just as the finance department never operates in a silo, financial software needs to be able to work with the necessary programmes and processes to be truly effective. Interoperable software interacts with and shares information with software from third-party providers, without the need for human intervention or manual integration work. This means that information only needs to be input once for it to be replicated across all systems used by the organisation automatically, resulting in significant time savings and reducing data discrepancies. This is essential in enabling supply chains to overcome difficulties caused by disparate systems and data silos and producing efficiency gains that are crucial to the health of logistics organisations amidst ongoing shortages and heightened competition.

As with any form of automation, interoperable systems can also free up time for employees that would have otherwise had to work on these monotonous or formulaic tasks, helping to boost job satisfaction and fulfilment and allowing organisations to redirect resource to more strategic areas.

Enabling data-driven decisions

Furthermore, when effectively interacting with and leveraging data from other areas of the business, such as WMS, financial software is a powerful tool for performance insight and can become a wider decision support mechanism. For example, it can help to identify roadblocks slowing down production, and therefore not delivering maximum ROI. Or pull wider business information into the accounting software so it can produce flash reports on performance to compare to KPIs. In addition, this data extraction, analysis and reporting automation can save organisations hours or even days of time that it would otherwise take for a member of staff to manually collate the data and write the reports.

Organisations that are able to collate and optimise the data they already hold can generate valuable learnings to inform their strategy, giving them the edge over competitors that still operate with siloed systems and data.

Futureproofing for the unknown

With ongoing geopolitical and economic uncertainty, and a whole host of variables that could suddenly ramp demand up or bring it down, building the ‘optimal’ supply chain is difficult. However, system interoperability plays a crucial role in helping organisations remain agile and flexible, ensuring that new automation solutions can slot into an existing network and share data seamlessly, rather than requiring organisations to manage complex integrations to connect disparate systems, or ‘rip and replace’ existing infrastructure.

As interoperability increasingly becomes the norm for new software and automation solutions, organisations have the liberty to choose exactly what they want from different specialist providers to ensure each element of their warehouse or logistics infrastructure ticks their boxes, rather than compromising across the board with a more generalist solution.

Final thoughts

While interoperability isn’t necessarily a new or particularly advanced software function, it’s becoming ever more important for supply chain professionals in tackling challenges and driving efficiency; helping to end data silos, free up staff from monotonous tasks to fulfil more strategic roles and improve visibility and performance insight to create a decision support mechanism.

Supply chain professionals looking to upgrade or replace crucial systems – whether back-office or on the warehouse floor – should do so with interoperability and future requirements firmly in mind. After all, small changes can have significant impacts.

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