3 minute read 4 Aug 2023
Train carrying containers in warehouse in shipping port

3 considerations for adding elasticity to your transportation strategy

Bjorn Bernard
By Bjorn Bernard

Managing Director, Technology Consulting, Ernst & Young LLP

Experienced supply chain leader with a passion for transportation and logistics transformation. Global citizen. Tennis, skiing, golf and basketball fan. Husband and a father of three.

3 minute read 4 Aug 2023
Related topics Alliances
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Supply chains run better and stretch more when designed for elasticity

In brief 

  • Elasticity provides your business with data-driven short-term agility to react quickly, and long-term flexibility to scale.
  • It’s not one size fits all. Create a custom optimization plan, ensuring it outlines your parameters for success, goals and specific KPIs.

Why supply chains run better and stretch more when designed for elasticity

Optimization. It’s a big word — and even a bigger goal. Mathematically, there always should be an optimum. Ask 20 businesses what they consider optimal about any situation and you’re likely going to get as many different answers. When it comes to getting people or goods from A to B, it seems like we should already have the technology to do that, doesn’t it? After all, we use app-based maps daily, and it’s second nature to enter a destination and let the tool factor the distance, time, tolls, traffic and mode of transport. But these apps work because those parameters for optimal performance are relatively rigid. But what if the problem is so complex, and the inputs for the solution are so numerous and constantly changing that we can’t truly define what the optimal outcome should be? Solving that is supply chain optimization in action, and fixing this enormous problem requires elasticity.

Beat organizational struggle

The COVID-19 pandemic may be blamed for the origins of many of the world’s transportation challenges, but that’s not strictly true. This massive global event did expose pre-existing transportation and logistics weaknesses and exacerbated others. But all kinds of input factors impact performance. Remember those fraught weeks in 2021 when the Suez Canal log jam affected worldwide shipping? Think about what escalating fuel charges, inflation and the loss of certain global shipping routes due to geo conflicts continue to do to transportation operations too. In the fight to manage all of this, businesses confuse improvising for optimization. They naively adopt cost cutting believing a better bottom line means a better-performing business. Or they’ll go through knee-jerk adoptions of new tech tools that, over time, don’t work well, leading to inefficiencies. The truth is, tech is foundational to logistics optimization, but so too is balancing technology design with operational approaches for successful adoption and daily business use. IT departments have championed standardized technology as the route to efficiency, but what businesses really need is strategic customization to continually meet consumer demands. This balancing act is where optimization begins — starting with elasticity.

Supply chain

Addressing an organization’s overarching end-to-end supply chain and operations strategy to grow, optimize and protect their operations

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What elasticity is and how to think about it

Consider this: You order something online and, like most of us, come to expect it in your hands within 24 hours, or sooner. Many consumers think little of the complexities of making this happen and call out brands that fail. Behind the scenes, however, these delivery and shipping models now require intelligent technological agility that just doesn’t exist in the older legacy platforms many companies still struggle with. As companies transition platforms, embracing agility can help inform the right tech selection, jump-starting the journey to satisfying rapid delivery expectations and, in return, considerable benefits for the company. Making this journey successful means applying just the right number of standardized systems to create connected efficiencies, but also creating the flexibility to adjust quickly to changing conditions and consumer needs. If this balancing act works, organizations will achieve transparency from procurement to manufacturing, distribution and customer service, as well as from PO to delivery, shipment and freight tracking. More importantly, your business will have the data-driven short-term agility to react quickly, and the long-term flexibility to scale without breaking. This holistic viewpoint is what defines elasticity through optimization.

Onboarding elasticity – three considerations

As you embrace elasticity as a path to optimization, keep three things in mind to help shift your culture and priorities for long-term success:

  1. It’s not all about the bottom line. Instead of realizing short-term gains from cost cutting that your CFO may want, broader optimization, done right, can also bring savings for the organization.
  2. Your people will be better served. It 8seems counterintuitive, but improved technologies and processes that save time and create efficiencies help employees shine, leading to greater work satisfaction and retention.
  3. It’s not one size fits all. Every organization is different, with varying levels of maturity, complex customer dynamics and specific conditions for business success. Create an optimization plan, or work with a partner to develop one, and ensure it outlines your parameters for success, goals for your business, and business-specific KPIs to measure how you proceed — and prosper — on the road ahead.

Summary

In the fight to manage transportation operations, businesses confuse improvising with optimization. There is a balancing act where optimization begins – starting with elasticity.

About this article

Bjorn Bernard
By Bjorn Bernard

Managing Director, Technology Consulting, Ernst & Young LLP

Experienced supply chain leader with a passion for transportation and logistics transformation. Global citizen. Tennis, skiing, golf and basketball fan. Husband and a father of three.

Related topics Alliances
Upvote