Challenges - Shippers - Strategic Network Planning
Poor integration of planning and operational components. Decisions based on outdated, historical information. Insufficient supply chain risk management.
Today, tenders are in most cases released having their focus in the rearview mirror instead of looking straight ahead. These tenders are often built based on past values that have not been standardized, and in very consistent environments that approach could potentially work.
But with the world moving faster all the time and most businesses changing rapidly, tenders that reflect scenarios of the past typically leading to wrong forecast values for transports and, even worse, the selection of the wrong provider. If, for example, a large customer of a supplier is in a certain location, typically a carrier would get a deal that covers the whole region while offering the best cost on that specific volumes and physical address. Now if the customer is lost or the supplier moved, a carrier might be selected despite no longer being the best option in the relevant area.
More than that, quotes by carriers strongly rely on the forecasting quality of tenders, meaning that if data quality is not sufficiently high and the carriers see a risk in reliability of tendered information, risk surcharges can arise. If the only carrier able to forecast the future is the existing carrier, the result is competitive advantages and scenarios that no longer work to the tenderers advantage.