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Methodology
Overview
Imagine that the traditional approach to running your business inevitably increased your costs, shrank your margins and led to a stagnating customer base.
The resulting outcome is a tremendous toll on your margins and a procession of critical errors that make it more difficult to retain (and win) clients, not less!
At CargoWise edi, we argue that for many international supply chain providers this is indeed the case!
The reason why they struggle to make an adequate profit and have difficulty winning and retaining clients is frequently a direct consequence of the method they use to attempt to create a competitive advantage.
We call this flawed approach to business development the Operator-centric or Cottage Industry Method.
This method proceeds from the assumption that every job is unique and that providing personalized (one-to-one) service is the best way to provide the level of service customers want. As a result, individual operators customize their processes on the fly (resulting in impossible to manage diversity) and highly skilled operators get bogged down in repetitive, menial tasks.
But here's the dilemma:
To win more clients you have no choice but to slash your prices to the bone! Yet, at the same time, they demand the earth (and more!) of you.
The inevitable result is your margins are squeezed from both directions.
More clients mean more work for your operators. Moreover, the additional personalized services your clients demand mean that the work becomes more complicated.
Problem is: operating on such a thin margin means you can't afford extra staff!
Inevitably, you're forced to compromise between meeting delivery deadlines (increasing processing speed) and maintaining personalized service (accuracy).
A no win situation!
What's the solution?
The solution is to recognize that within the 'normal' variation of each job, the underlying processes at work are fundamentally the same. That is: the discrete tasks that make up jobs are standard.
It is only the sequencing and reporting on individual jobs that alters - according to the specific requirements of the customer.
An understanding of this realization means your business can be restructured away from the costly and limited Operator-centric approach to a new process that can dramatically improve the efficiency of your operations while still retaining the customization and flexibility that your customers demand.
We call this the Scalable (or Systematic) Approach.
This solution offers operators and management four vital benefits:
- Cost reduction: delegating 'low-value' clerical tasks to lower-cost process workers while skilled labor concentrates solely on complex compliance tasks reduces operating costs.
- Speed improvements: a production process operation reduces multitasking. Operators can concentrate on a single task in the workflow, improving the speed of operations.
- Workflow transparency: management remains aware of the location and situation of every shipment - meaning far less chance of missing shipping deadlines.
- Error reduction: Because both multitasking and expediting is minimized, the error rate is reduced.
ediEnterprise enables freight forwarders and other supply chain logistics companies to adopt the Scalable (Systematic) Approach without the need for specialist staff and without having to sacrifice the unique customization clients' demand.
The resulting outcome is the ability to win more clients and dramatically improve customer service while simultaneously reducing operating costs.
