Freight Bill Auditing: Benefits, Process & Cost Control
Modern supply chains involve multiple, independent steps, each of which must operate flawlessly to ensure the efficient movement of freight. Professional companies including manufacturers, distributors, and retailers all achieve this through effective supply chain management efforts. It requires strategic, effective supply chain management methods.
The biggest problem is this: How do you define 'effective'?
With multiple cogs in the supply chain management wheel, shippers must find innovative ways of integrating supply management techniques and procedures to reduce mistakes, dependence on resources, and excessive spending.
In this blog post, we'll explore the three key steps to integrated supply chain management and why communication is crucial for success.
One of the best teachers of effective management techniques is Stephen Covey.
In his book, “The 7 Habits of Highly Effective People” Covey states that it typically takes 21 days to create a habit. This philosophy is a living example of the concept of "slow and steady". The main problem that most supply chain managers have, is not having the patience to develop the right habits. This leads to increased mistakes and sets up an opportunity for failure.
To avoid this, professional supply chain managers integrate the procedures through three specific steps.
Strategic Supply Chain Management
Before you ship - you've got to build the platform. This is the fundamental concept of strategic management.
This level develops the building-blocks, including:
- Picking supply chain partners, vendors, and carriers
- Finding the right warehousing options
- Establishing shipping and receiving expectations
- Setting goals and objectives
Strategic planning often involves the input of key leaders and stakeholders - at least, if the company wants to achieve supply chain dominance.
Tactical Supply Chain Management
Once the platform and strategic side has been developed, it's time to get tactical.
In this step, the shipper will begin to build the team that helps them move products from point A to point B. This includes:
- Hiring employees
- Setting up shipping hours and commitment levels
- Developing schedules for receiving raw supplies, manufacturing, or selling products
Most importantly, the tactical supply chain management process reviews the entire program to ensure they are meeting or exceeding customer’s demands. This usually takes the form of something similar to beta testing the processes before enacted them publicly.
The Activation
The final phase of supply chain management is activation. This is when a retailer, manufacturer, distributor, or anyone requiring shipping puts substance behind the planning.
Activation makes all the difference in solidifying logistics. During this phase, supply chain managers will create controls and procedures that allow them to:
- Schedule shipments
- Follow up with customers
- Ensure all supply chain functions are handled effectively
Why Communication is Crucial
Everybody understands the value of 'staying in your lane'. But, communication with other stakeholders or leaders is just as critical.
Most integrated supply chain management programs fail due to a lack of clear and transparent communication. There are so many moving parts in each phase of supply chain management, which increases the need for all segments to communicate with each other.
For example, when a company is focusing on the strategic side, and are picking a warehouse to host their business, they need to consider the tactical and activation side as well. If they select a warehouse that is large enough to hold all supplies or complete the manufacturing of products, it's also important to pick one that has enough loading docks. It's also crucial to verify that the warehouse is employee-friendly, with the right support systems including:
- AC
- Clean water
- Bathrooms
These ensure your people are taken care of.
These are, of course, just a couple of examples of things that should not be overlooked. And the best way to achieve that is through solid and clear communication.
How Redwood's Modern 4PL Approach Supports Supply Chain Management
Redwood's Open 4PL approach embodies the concept of integrated supply chain management, creating plans that ensure complete supply chain operations are as efficient as possible. Redwood Logistics has helped new and existing companies who have a need for moving or receiving freight optimize their network for several years.
Final Thoughts
Integrated supply chain management requires patience, strategic planning, and clear communication across all phases. By following the strategic, tactical, and activation steps outlined above, your organization can build a more efficient and resilient supply chain.
FAQs
What is integrated supply chain management?
Integrated supply chain management is the coordination of people, processes, partners, and freight activities so each step works together instead of in isolation. It brings strategic planning, tactical execution, and day-to-day activation into one connected system. The goal is to reduce mistakes, limit waste, and improve how efficiently goods move from origin to destination.
What are the three phases of integrated supply chain management?
The three phases are strategic supply chain management, tactical supply chain management, and activation. Strategic planning sets the foundation by choosing partners, warehouses, and goals. Tactical management builds the operating plan with staffing, schedules, and service levels. Activation is where shipments are scheduled, customers are updated, and the supply chain runs in practice.
What happens during the strategic stage of supply chain management?
The strategic stage builds the platform for the supply chain before freight starts moving. It includes selecting vendors, carriers, and warehousing options, plus defining shipping and receiving expectations and setting goals. This stage also benefits from input from key leaders and stakeholders because early decisions shape the entire operation.
What is the tactical stage in integrated supply chain management?
The tactical stage turns the strategic plan into an operating model. It includes hiring employees, setting shipping hours and commitment levels, and creating schedules for receiving supplies, manufacturing, or selling products. It also serves as a review period to make sure the process meets customer demand before full rollout.
What does activation mean in supply chain management?
Activation is the phase where planning becomes daily execution. At this stage, teams create controls and procedures to schedule shipments, follow up with customers, and keep all supply chain functions moving effectively. It is the point where the operation is put into action and managed through real workflows.
Why is communication so important in integrated supply chain management?
Communication is critical because supply chains have many moving parts, and each phase affects the next one. Poor communication can cause misaligned warehouse choices, missed dock needs, or weak employee support planning. Clear, transparent communication helps strategic, tactical, and activation teams stay aligned and avoid costly disconnects.
How does Redwood Logistics' Modern 4PL approach support integrated supply chain management?
Redwood’s Modern 4PL approach supports integrated supply chain management by creating plans that make end-to-end operations more efficient. It is designed to help companies moving or receiving freight optimize their network and coordinate supply chain activity across functions. The focus is on connecting the pieces so the operation works as a system.
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