Posted by Guru Rao

When Dwight D. Eisenhower enacted the Federal-Aid Highway Act in 1956, which created 41,000-miles of interstate highways, it was primarily with defense in mind. The commander in chief was preoccupied with how quickly military ground transport could mobilize in the U.S. Consequently, the new routes expanded a foundation for the U.S. logistics market. A more integrated interstate system meant product could be moved nationwide more efficiently.

In recent years, retailers and shippers have gotten much better at utilizing the interstate, and other modes of supply chain transit, thanks largely to a different type of integration: digital supply chain integration. Beyond optimizing routes with GPS tracking, modern delivery tracking systems integrate with digital inventories, transportation management systems (TMS), enterprise resource planning (ERP) tools and other critical enterprise solutions.

The result of these integrations is the ability to transform your downstream supply chain operation as profoundly as the Federal-Aid Highway Act transformed highways.

All roads lead to the consumer

The business-facing value of integrating the various digital resources in your supply chain under a single delivery management tool are fairly straightforward:

  • Gain central visibility into downstream operations (e.g., where is your fleet?).
  • Automate route planning based on real-time supply chain data.
  • Predict how an event may impact your supply chain as a whole, and automatically prescribe adjustments accordingly.

But where integration really makes a difference is its ability to minimize touch points between the product’s point of origin and the consumer. If you can aggregate inventory data for manufacturing facilities, distribution centers, brick-and-mortar stores and warehouses, and combine that with product that is currently in transit, you theoretically have everything you need to map out your entire supply chain.

And when you know where everything is, you can start calculating the best route to the consumer.

Integration breeds transformation 2

Shortcuts to customer satisfaction

Put yourself in the customer’s shoes. You’ve ordered a new laptop, and it’s supposed to arrive at your house within 3 to 6 business days. When you tell a co-worker about your purchase, she looks at you sideways, not because of your choice in computer, but because she saw that device at a physical branch of the store you ordered online from. Not only have you paid for shipping, but you could have had your new computer yesterday if, at checkout, you had been given the option to order for store pickup.

The problem is that the local store inventory was not linked to the online part of the company’s supply chain. As a result, there was really no way to tell that you could have gotten your new laptop in half the time. It all seems a bit roundabout, because it is.

Like highways create more direct routes to destinations, supply chain integration finds a quicker way to the consumer with fewer touch points.

Give your customers what they want (a delivery experience that makes sense), and they’ll give you what you want (repeat business).

Integration breeds transformation: Here's how