A few weeks ago, I sat down with Zebra’s supply chain leaders to understand some of the best practices they’re applying today to manage sourcing, manufacturing and shipping challenges. The FourKites platform was brought up on a few occasions, which prompted some of you to inquire about how we’re using the solution and how many problems it is really solving. Here’s what our team had to share when I asked their opinions…
Rob: In our last discussion, you all mentioned that you’ve increased your reliance on the FourKites platform in certain supply chain operations. Can you talk more about how you’re using it today and why you’re using it for those instances?
Deanna: Our internal teams must be able to track orders for critical, high-visibility projects since timelines are tight and the shipping environment today makes our company susceptible to missing those deadlines. Plus, we don’t want to compromise our customers’ success in any way. They depend on our technology platforms to solve their business problems and keep their operations flexible and scalable amid surge demand. These are essential retailers, warehouse operators, manufacturers, healthcare providers, utilities and others who keep society functioning. With FourKites, we can be proactive when there is slow or no order movement.
Kim: Deanna’s right. As I have mentioned before, Zebra became a very heavy user of air freight last year. In fact, we were using it almost exclusively. While it is a very expensive mode, it is also very critical for our success since we do not have much inventory on hand. As soon as product arrives, it turns quickly and goes back out the door. We are constantly re-evaluating our shipping strategies, and just because we’re shipping one way today doesn’t mean we’ll stick with that mode tomorrow. There are a lot of dynamics at play.
Imagine how onerous it can be to have to rely on various carrier websites and daily tracking/exception reports to get a pulse on your supply chain, especially when there are constant shifts. Before we integrated FourKites, we were constantly sending emails and making phone calls to obtain shipment statuses and updates, which were not always reliable. Since bringing this tool online, we are dramatically more efficient and effective in our logistics management.
For example, as countries started to roll out their COVID-19 vaccination programs, we had to ensure printers and scanners arrived in time to meet their very publicized start dates. We were able to identify exactly where the shipments were stuck to get them moving again. And by offering self-service tracking to our internal and external key stakeholders, our tracking email inquiries have dropped by over 50%. Our customers can view order tracking through a BOT, which links them to the FourKites platform, providing many more milestones than their previous linking to carrier website statuses. Through our most recent enhancements, we have also gained visibility to customer shipments routed via our cross-dock locations.
Deanna: It has also improved our carrier score-carding process by reducing creation time and quickly (and without bias) identifying the actual root cause for delayed shipments, instead of previous “grey areas.” This is important, as performance metrics are the only way to confidently know if our transportation strategy is working. Our suppliers can get the right quantities produced ahead of schedule, and we can do everything right in the DC to get orders out the door on time. But if something goes wrong with shipping, none of it matters. We still miss deadlines and disappoint customers.
Rob: Is the data you’re collecting beyond the FourKites platform staying within Zebra’s systems, then? Or is it being fed into a blockchain or digital ledger to enable real-time decision making by other partners and suppliers within the supply chain – or perhaps even customers?
Deanna: In addition to fueling Zebra’s data ecosystem, data from FourKites is connected to our supplier collaboration portal and is used to fuel internal product availability milestones. Our DCs need to know how to plan labor, which is currently heavily dictated by when product will arrive at their docks. With real-time, accurate delivery information and with the combined knowledge of exactly what is inside of each shipment, the DCs can make sure that they have the right employees positioned to receive product and turn it back around for shipping out at the right time.
Rob: We know forecasting plays a crucial role in ensuring a supply chain is operating smoothly, from determining what goods and materials are needed, the amounts required, and to what locations. So, I’m curious how you’re using that data for forecasting and what tools you’re using to generate accurate forecasts.
Mike: The supplier collaboration tool we’re using allows us to have very quick electronic interchange with our supply base. Every morning, our manufacturers get an update on what's happening within our short-term demand, and once a week they get a full update on the next 18 months’ worth of demand. So, the daily updates are short term needs – the sales order level update – and every week is more of our high-level demand for the next year and a half for longer-term planning purposes. That used to be a year, but we've expanded it to a year and a half now because of the lead times of parts being so far out. Within that collaboration tool, we also have a supplier visibility module which lets us see the raw material inventories on hand at our manufacturing partners as well as their open purchase orders. That visibility enables us to make sourcing and even marketing or sales decisions based on what we may or may not have.
Deanna: Mike’s right. From a DC perspective, the data we now have access to via the supplier collaboration tool and FourKites allows us to do what-if modeling faster and easier. For instance, if we have to make a change in sourcing or if an air freight lane has no available space, we can determine what impacts alternative options have on costs and how service will play out so we can make the best choice for our business and our customers.
Kim: Our freight capacity forecasting is a journey. Today it is a combination of modeling a previous quarter, most representative of our future quarters, then tweaking based on feedback from our planning teams, suppliers and transportation partners. In 2022, we plan to add data science and predictive elements to further refine our freight forecasting capacity accuracy.
Rob: Do the three of you see a light at the end of the tunnel? Some are predicting the component shortages and supply chain capacity issues could extend into 2023 or beyond, especially given the crisis in Ukraine and the impacts that will have on global supply of electronics components. Does that mean we should expect more of the same in 2022? Or do you think the solutions you’ve started to implement – or perhaps the technologies and process changes our customers and partners have started to rollout – will make everything more manageable?
Kim: From a transportation perspective, I am not expecting major capacity improvements in 2022. We will be watching passenger air travel closely due to its direct correlation to increased air capacity. There are many new orders for vessels and planes, but many of those are not expected until late 2022, early 2023. In the meantime, we will continue to focus on our innovative routing strategies and creating predictive insights to continue the momentum for continued successes.
Deanna: What’s the phrase, “Wishing is not a strategy?” That is where our mindset is. Market intelligence is telling us that recovery is a very long road. So, while we’re optimistic, we’re also planning for this version of the supply chain to be here for a long time. This mindset allows us to set the right pace for longer term investments in digitization, innovation, and modularization that will allow us to continue to deliver (and excel) through crisis.
Mike: I do see some light at the end of the tunnel. My sources say we could see some slight improvements in the back half of 2022, but we are not likely to see any return to “normalcy” until at least 2023. There are just so many unpredictable factors. Fortunately for us, the team is quite practiced at dealing with the turbulence in the market and everything we have been doing up to this point will continue to help us navigate through these supply chain disruptions and shortages.
If you missed past conversations with these supply chain experts, you can check them out here:
If you’d like to learn more about the outsourcing, logistics and transportation strategies or technology tools that have proved most effective at Zebra, you can contact the team here to set up a call.