Unpredictable disruptions have long-term, global effects on supply chain networks. Disruptions can result from worker shortages in dispatching, for instance, or from backlogs in ports if demand for imports grows too quickly. One prominent example of an unpredictable disruption is the blockage of the Suez Canal in spring 2021 by a stranded container ship1.
Author
Andreas Weber
Vice President
4flow consulting
The impact of disruptions on finances and planning
Blocked routes prohibit access to shipments. As a result, production can be delayed due to missing parts and entire production processes can become confused. Financial losses can also result from the delays.
In the best-case scenario, businesses affected by such disruptions try switching to other modes of transportation. Due to the blockage of the Suez Canal, there was an uptick in demand for rail transportation2, for example. This scenario applies in many more cases. A disruption occurs on the chosen transportation route: how can a business now be sure that transferring the shipment to another mode will result in quicker delivery, or determine if it would be better to send an equivalent shipment on another route? Often, it is not clear where the shipments are and how long they’ll be delayed – which are key details for further planning.
Shipment tracking supports agile network planning
In this case, shipment tracking – or track and trace – can help. This kind of shipment tracking can be implemented profitably in global supply chain networks.
By implementing track and trace, businesses see in real time where each shipment is, and whether it arrives at the planned time or with a delay. The ability to know the location of every shipment at every moment enables improved supply chain management. In this way, track and trace helps businesses make decisions. In case of a disruption, the added transparency helps determine the exact effects of the disruption and whether it is possible to switch to another transportation option.
The benefits of track and trace can be used even more efficiently if businesses have already established a flexible supply chain. An agile supply chain that integrates track and trace is more resilient against unpredictable events and ideally even predicts disruptions, which makes transportation execution easier.
Track and trace in the automotive industry
For complex supply chain networks like those in the automotive industry, track and trace is especially relevant. Many different partners and multiple modes of transportation are involved in transportation between a consolidation point and plants in other countries. The integration of long supply chains in a track and trace system ensures end-to-end transparency even in a complex environment.
Read in our Success Story how 4flow developed and implemented track and trace for Mercedes-Benz.