Transportation & Logistics: Look Forward or Be Left Behind

If you don’t have a strategic category plan for 2022, you should.

Authored by Scott Youngs, head of
Insight Sourcing Group’s Logistics Center of Excellence

Most transportation and logistics professionals will say that 2021 is a year to forget. It has certainly been an environment that ranks as the worst I have seen in over 30 years. Wild volatility, ambiguous markets, and no guarantees of capacity or service would make any supply chain individual feel uncomfortable for what may yet lie ahead. But if you are managing the sourcing function for transportation suppliers, it is time to move on and focus on the future.

With peak season essentially over from a strategic planning perspective and operational plans being put into motion, now is the time for sourcing and procurement teams to start planning the strategies that will propel them through the next one to three years of activity.

Here are five elements transportation and logistics individuals need to leverage for their strategic category planning to be successful in 2022 and beyond:

  1. Data. Data is the lifeblood of any good fundamental strategic planning effort. Seek out and obtain information not only on shipping transactions, but on suppliers, sales forecasts, product and packaging characteristics, compliance, and more. The more data you can aggregate to enhance the strategy for transportation and logistics, the better it will allow your organization to make decisions that are not solely focused on cost, but that balance cost, capacity, and service.
  1. Market Intelligence. Knowing the marketplace is another key element in creating a strategic category plan with confidence. In addition to looking for market-driving data indicators, dig deeper to find out what suppliers and competitors are doing to aid in creating a plan that is right for the organization. You should also be mindful to identify future logistics industry initiatives that may be market drivers, as well as regulatory opinions and strategies on a global scale.
  1. Continuity Planning.. Continuity planning has become a hot topic for many organizations’ transportation and logistics strategic category plans after living through 2021. Think through and document playbooks or strategies that can be utilized in order to bring cost, service, and capacity back into balance. Also, work with other internal organizations to ensure the plans are understood and agreed to. Creating situational awareness across the supply chain is key.
  1. Collaboration. Pre-COVID-19, I had noticed sourcing teams begin to work more in silos and spend less time collaborating across the organization. COVID-19, and the continuing supply chain disruptions caused by it, have refocused organizations’ attention to the value of collaboration through the category management functional process. Work with relevant stakeholders (finance, suppliers, customer service, sales, operations, distribution, etc.) to ensure different perspectives to drive organizational continuous improvement are met to identify the right strategies to implement.
  1. Sourcing. The sourcing function can be seen as tactical or strategic, and I have seen many more companies treat it as tactical over the past few years. With the right skillsets (tools, experience, process, technology, and rigor) the sourcing function can be a springboard to ensuring that you are not only attempting to manage costs, but also that you have a collaborative supplier mix focused on the harmonization of cost, service, and capacity.

Strategic category planning is a powerful, value-driven process for any organization. And with the general consensus that COVID-19 will continue to affect supply chains globally far into 2022, it can help drive value across the supply chain, providing a necessary tool to better prepare for tomorrow’s challenges, today!

Need Help with Logistics Category Planning for 2022?