Global transportation management and logistics

Challenge

Rising costs and global tensions

A combination of international crises – mainly the COVID pandemic, trade conflicts, and the Russia-Ukraine conflict – has seen shipping costs skyrocket anywhere from 50% to 500% over the past two years. Supply chain professionals face urgent demands and conflicting priorities across virtually every aspect of their job. They're dealing with:

• Supply scarcity: Raw materials, components, and finished goods are harder and harder to get
• A dwindling labor pool: Hiring skilled workers – if you can find them – has become more costly. Yet without enough staff, manufacturers can miss scheduled shipping days
• Lead-time volatility: Shipments can take 60 days or more for goods that used to arrive in 25 days
• Ballooning energy prices: The cost of fuel has doubled and is still moving up. It can now account for as much as 25% of freight expenses
• Broken agreements: Many carriers aren't honoring their volume contract commitments
• Dissatisfied customers: Clients are demanding faster deliveries, greater visibility, and quicker response times. They're not willing to tolerate bottlenecks

Meanwhile, heightened international regulations and tensions are adding to supply chain complexity, meaning more noncompliance fines, customs delays, duty cost increases, and higher-cost countries of origin for manufacturers.

Solution

An end-to-end transportation and logistics upgrade

With so many moving parts affecting supply chains, getting a handle on transportation and logistics can seem daunting. It needn't be. At Genpact, we take a comprehensive approach to these issues, bringing them into line for our clients and making their transportation and logistics systems best in class. Our goal is to improve every aspect of your logistics operation's effectiveness to keep your customers happy while reducing overall costs.

Our services offerings can run virtually every aspect of your operations:

• First, we evaluate the maturity of your present logistics operations to identify how to make them best in class
• Next, we benchmark your costs to see how they compare with your peers to determine if you're getting the best value. We also evaluate your on-time-in-full performance and how it affects customer satisfaction
• We conduct lane and load factor analyses to assess your carrier and facility selection, your costs, and the quality of the service you're receiving
• Our team appraises your distribution center operations to find ways to improve customer service, optimize inventory, and reduce total warehouse costs
• Finally, we also evaluate your freight bill and audit procedures and how you resolve exceptions and conduct transportation analytics

With all this information in hand, we deploy a logistics control tower with predictive analytics capabilities, which is essential technology for state-of-the-art supply chains today. This can run:

• Transportation strategy and network optimization
• Transportation sourcing and category management
• Capacity planning
• Logistics planning and execution
• Customs and global trade
• Audits and controls

Impact

The value of this end-to-end, holistic approach to logistics and transportation is clear – enhanced category planning and strategic sourcing to maximize savings, use resources efficiently, and reduce costs for greater speed to value.

Our approach to supplier management uses analytics to objectively score their performance and identify both upstream and downstream risks, providing data-driven methods to develop and diversify the supply base.

We evaluate markets and provide industry analytics to give you real-time insights to optimize operations and planning as well as manage inflationary pressures.

Our approach and capabilities have helped our clients:

• Increase international and domestic visibility of inbound and outbound shipments throughout the shipping process
• Achieve up to a 10% reduction in transportation costs due to greater control and auditing
• Obtain an 8–10% reduction in negotiated rates
• Identify a 20–25% reduction in labor through process automation and eliminating manual booking, tendering, and track and trace
• Implement a 5–10% reduction in the number of trips/loads required through better capacity planning

Here's how our services have helped two clients.

A building products manufacturer and retailer wasn't using its transport management system (TMS) to full capacity. We redesigned it, trained employees how to use it and by the time our work was complete, we'd reduced the number of trips and loads the company's fleet was making by 5% and provided greater visibility into the status of inbound and outbound shipments.

A lighting systems automotive sector client was facing smaller shipments, a rising product portfolio, and more demanding customers. These and other factors were causing logistical challenges. We set up a scenario and defined user cases for a supply chain control tower to enable advanced partner and cost management that reduced the total cost of logistics by 14%, even in the face of the company's shrinking volume.