Using the latest location tracking technology to tackle supply chain disruption

14/07/2022

truck on a map demonstrating location tracking technology

truck on a map demonstrating location tracking technology

Product shortages and supply chain snafus have topped headlines since COVID-19 caused the infamous toilet paper shortage of 2020.

Now, more than two years later, supply chain disruptions and the resulting empty shelves – or dramatic increase in prices – have become commonplace. These disruptions have impacted consumers in almost every aspect of life, from backordered garage doors due to aluminum shortages, to empty hot sauce shelves due to drought-affected chili peppers.

While supply chain disruptions are frustrating for consumers, they can be costly, or even debilitating, to businesses. Companies have largely dealt with the recent disruptions with short-term solutions. Easing pandemic restrictions seemed like it should allow for business as usual to resume around the globe. But closed factories, blocked trade routes and other logistical woes have become the new normal.

Experts now say that to protect themselves from the increasing frequency and severity of unreliable supply chains, businesses need to start finding long-term solutions to predict, adapt to and mitigate the negative effects of disruptions.

Investing in location tracking technology is one way businesses can help build supply chain resilience to protect operations and revenues.

Why adapting supply chain infrastructure is crucial

Ongoing supply chain problems are a greater threat to companies now than current concerns over inflation. Supply chain interruptions can cut off products, production, deliveries and – ultimately – profits, which is why many CEOs are focused on overhauling their current, outdated supply chain models.

It’s projected that over the next 10 years, current supply chain models – and the associated disruptions – could cost some companies as much as six months’ profits.

That’s because the backlog of shipments and materials shortages caused by the COVID-19 pandemic, followed by interruptions in supply chains caused by the war in Ukraine, won’t be easily erased.

While the dramatic rises in inflation rates and commodity pricing is a concern for many businesses, developing more resilient logistics still takes top priority because it can be harder to predict, and therefore react to, a sudden stop or delay in the supply chain.

How location tracking can make supply chains more resilient

Location tracking technology has evolved and grown over the last decade. The primary limitation of the technology is that companies get location updates at specific checkpoints within the supply chains, as cartons, vehicles or boxes are scanned through stop points or warehouses.

As location tracking technology has advanced, the move has been toward creating location intelligence – technology that gathers and analyzes supply chain location data to generate valuable insight about the product movement and handling in real time through the supply chain.

Using location intelligence and other location tracking technology, companies can develop a more resilient supply chain. The technology can help logistics teams to predict how goods will flow through the supply chain to proactively identify potential disruptions and have solutions available should problems arise.

Location tracking technology also can help strengthen businesses by identifying efficiencies and improving customer care, and helping address a company’s environmental impacts.

Using location tracking technology to combat supply chain disruptions

The primary problem with the current location tracking technology is that it leaves blind spots at  points of the supply chain to supply chain managers. That’s because location tracking technology to date has focused on delivering location updates when goods pass through certain stop points within the supply chain.

This often makes supply chains reactionary. Managers discover problems with a shipment when the shipment fails to show up on time to the next checkpoint. From there, supply chain managers must react, looking for solutions to a problem that has already occurred and is already impacting the business.

Location tracking technology – particularly location intelligence – now seeks to help supply chain managers be proactive in identifying and solving interruptions to the supply chain. Newer location tracking technology allows supply chain managers to monitor shipments that are actively in transit.

This means they can spot delays, or potential delays, sooner and work proactively to limit the impact of those delays on the rest of the supply chain, and on overall business operations.

Improving efficiency and customer care with location tracking technology

Location tracking technology goes beyond monitoring the movement of goods and spotting disruptions. It can also allow companies to capture valuable data on overall logistical operations. Having data about every point in the supply chain enables  managers to look for opportunities to improve efficiency. With accurate data on how goods move through warehouses, yards and distribution centers, logistics teams can discover how to best increase productivity, cut costs and invest within their supply chains.

Some location tracking technology goes so far as to use machine learning and artificial intelligence to quickly provide insights into the supply chain using the gathered data.

With AI and machine learning tools, companies stand to discover solutions to otherwise unsolved logistical problems or to find strategies to help meet preset supply chain goals.

Additionally, location tracking technology can allow for better customer service. Due to the unpredictability currently plaguing many supply chains, companies are often struggling to make accurate ETAs and shipping cost estimates for their customers. Often, that means padding delivery times to create a cushion for potential disruptions or unexpected costs.

Accurate location tracking using available technology allows companies to more accurately predict ETAs and costs, which makes companies more reliable in the eyes of their customers, and may allow for shorter shipping-time or lower cost estimates that could bring in more customers.

Meeting environmental goals with supply chain insights

Lessening environmental impacts and carbon footprints has become an increasingly important goal for many companies, as customers look to do business with environmentally friendly brands and governments increase restrictions on carbon emissions.

The same technology used to build more resilient and efficient supply chains also can be leveraged to set and meet businesses’ environmental impact goals.

For companies looking to improve their climate change impact, location tracking provides a clearer picture of current carbon emissions. With a clear picture of the environmental impact of their supply chains, companies can goal set for cutting carbon emissions and other environmental impacts and track progress toward meeting those goals. Just as AI and machine-learning tools can help companies spot operational efficiencies within the supply chain, they can also be used to spot environmental inefficiencies and opportunities for improvement.

Adopting location tracking technology for a stronger supply chain

Large vendors are already beginning to invest and expand their use of the latest location tracking technology to build more efficient and resilient supply chains, and that technology is expected to find its ways to smaller operations quickly. It’s estimated that within the next four years, more than 75% of supply chain applications will come with the built-in advanced analytics, artificial intelligence and machine learning tools that allow supply chain managers to modernize and strengthen their companies’ logistical operations.

With location tracking technology in place, companies can develop an invaluable logistics “command center” that monitors all aspects of the supply chain from a central location. From that command center, logistics teams can work across various areas of the company and supply chain to identify and implement solutions to breaks in the chain or inefficiencies.

For smaller companies who may only be able to integrate location tracking technology in a limited way, supply chain managers can work to identify the most critical components, or the riskiest routes within the supply chain to implement new location tracking technology there first. They also can begin to develop strategies that will take full advantage of coming developments in location intelligence and location tracking to prepare for the future accessibility of those technologies.

Disclaimer: The opinions expressed in this article are those of the contributing author, and do not necessarily reflect those of the Forum for International Trade Training.

About the author

Author: Jennifer Nesbitt

Jennifer Nesbitt is a New York-based freelance copywriter. A former journalist and graduate of Penn State University, Jennifer now writes about a variety of topics, including business, technology and marketing. She is passionate about helping companies develop their brands by providing compelling copy that adds value to their online presence.

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