Informed Decision Making – Growth Mantra of a Freight Forwarder
Informed Decision Making – Growth Mantra of a Freight ForwarderApr 20
A leader is the one who knows the way, goes the way, and shows the way. In every organization, leaders are expected to be astute decision makers in order to guide the organization towards greater achievements. Historically, even the greatest decision makers relied heavily on their experience, knowledge and wit. Today, advancements in technology have helped them to take a look at the facts at granular levels to make crucial decisions. Availability of large volumes of information and reporting tools which can present the required facts are helping both strategic and operational level decision making.
The Freight Forwarding industry is an excellent example of how information reporting can change the way companies do business. In this industry, the use of information based decision making is of high importance due to interdependency of processes and involvement of multiple parties. An ERP solution accumulates a variety of data on a daily basis. Using this data to mine required information with help of a reporting module has helped numerous logistics companies improve decision making in many ways as mentioned below -
1. Effective usage of available information -
Today, Freight Forwarders manage massive flow of goods and at the same time create large sets of data. Every day the details of millions of shipments like location, weight, size, origin, destination and content are tracked globally. Data generated through day-to-day operations, when stored and exploited fully, can provide insightful inferences. The outcomes have huge potential for increasing operational efficiency, improving customer experience and creating useful new business models that can drive revenue growth.
2. Decision making based on Real-time and historical information -
A Freight Forwarding Software or an ERP Software for Freight Forwarders can provide historical data as well as data from the production line. With reporting tools in place, managers can extract crucial facts from a large amount of data at a rapid pace. With quick access to real-time and historical data, you can use your time more efficiently to analyze information and make better decisions. For example, a sales head of a company can look at historical data to find the trends in the sales cycle and find out which ones are going to affect the business. Based on this information and its comparison with the current stage, a course of action can be defined that will help improve sales.
3. Performance measurement -
Using KPIs to monitor the performance of a variety of business critical parameters is an essential benefit of information reporting infrastructure. Keeping track of key parameters such as Sales forecasting KPIs, Transportation KPIs, Warehousing KPIs etc. allows business managers to fine-tune operations towards service improvement and cost saving objectives. A few examples can be as follows -
% of Sales vs. Target
Warehouse Turnover (by cost)
Freight Volume by Trade Lane/Destination Port
4. Customer Intelligence -
The ultimate objective of any business is providing the best service to customers in order to drive profitability. Maintaining existing customers through satisfactory service is as important as acquiring new ones. Reports generated using data in an ERP system helps Freight Forwarders to discover patterns within customer behaviors, offering greater visibility into what customers want, when they want it and how they want it. This inside knowledge can turn into direct profit for a company by leveraging existing data on consumer habits and maintaining valuable customers. A 3PL company can apply customer insights to understand which customers are more profitable in terms of co-operation & timely payments.
5. Identify areas for cost cutting -
Reports from Freight Forwarding Solutions help in enhanced supply chain management with the effective use of the available data. Investment in such a system can pay for itself by helping decision-makers identify areas for cost savings. For e.g. Freight Forwarders can use reports to measure vendor performance and perform vendor comparison to select the best vendor for any particular shipment. Historical reports can help them to optimize the Freight Rate and in turn, better negotiate the prices.
With Informed decision making, Freight Forwarders can achieve full coordination, collaboration, and visibility, so they can streamline workflows, reduce expenses, and optimize performance and service. A Freight Forwarding Software gives the management a multidimensional view of the processes of the company which empowers the management to be better decision makers and more effective leaders.