Transportation Predictions That Will Shake-Up the Supply Chain Industry In 2018

In the book, The Living Supply Chain, the authors argue that “Speeding up the supply chain is at the root of everything that is good: improved revenue, reduced working capital, higher profitability, and less obsolete inventory.

Conversely, slowing down the supply chain is at the root of everything that is bad: working capital write-offs, reduced profitability, and slowing revenues.”

To “speed” up the supply chain is to invest in change and change will come with the digital transformation of the supply chain, which is the major focus for executives in 2018.

Much change in the supply chain industry will be due to innovative technologies for digital transformations, along with the recent tax reforms (see below), and the still-current driver shortage/capacity crunch.

The digital transformation of the supply chain will change everything – for the better.

These are the innovative technologies that I predict companies must use to undergo this transformation within their supply chains:

  1. Cloud-based technology
  2. Advanced Analytics
  3. Tracking and Tracing
  4. Supply Chain Visibility
  5. Blockchain
  6. Artificial Intelligence
  7. Predictive Analytics
  8. The Internet of Things

“In 2018, shippers must embrace change in order to succeed. Waiting and seeing what will happen is no longer an option,” adds Clark.

“Transportation management systems are poised as the fundamental tool for supply chain transformation, helping businesses to position themselves above the competition with sustainable profits and better service levels.”

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King Trade Capital Provides Supply Chain Finance Solution to Startup

King Trade Capital announced it has established a $1 million supply chain finance solution for a Texas based startup. KTC was contacted by a nationwide factor to help accelerate the startups sales growth in the apparel industry. The owners of the startup have extensive relationships with small to mid-size retailers and years of experience sourcing goods from overseas factories. Through their relationships in the apparel industry they were able to secure annual production programs to manufacture branded goods on behalf of several men’s and women’s brands.

Due to the fact the client was a newly established entity with no financial or operating history, they were unable to obtain funding through traditional financing sources. The client was in need of a financial partner capable of providing the capital and structure necessary to have fabric sourced and garments manufactured overseas.

Initially the client’s factories wanted cash deposits in order to purchase fabric that would then be cut and sewn into finished garments. Payment for the cut and sew operations would then be due upon shipment. The owners, knowledgeable of the risks associated with sending cash deposits overseas, were seeking a safer solution to finance their inventory purchases.

King Trade Capital evaluated the experience of the owner’s and their customer and factory relationships, ultimately gaining comfort in their ability to perform. After negotiating with the factories, King Trade Capital and the client were able to structure individualized solutions for each factory, utilizing letters of credit that allow them to purchase fabric, complete the cut and sew manufacturing process and get paid according to their terms with the Customers.

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Balancing Financial Settlement and Inventory Levels Remain Key Concerns For Supply Chain Managers

Balancing Financial Settlement and Inventory Levels Remain Key Concerns For Supply Chain Managers

U.S. companies made only marginal improvements in their ability to collect from customers and pay suppliers in 2013, while showing no improvement in how well they managed inventory, according to the 16th annual working capital survey from REL a division of the Hackett Group, Inc.

“For inventory, the global marketplace has made issues like demand planning more important than ever before,” says Analisa DeHaro, Associate Principal for REL. “Companies need to factor in lead times that may not have been an issue when manufacturing was done closer to home. The best companies are becoming more savvy about this, and are more effectively balancing the various elements of inventory management.”

The amount tied up in excess working capital at nearly 1000 of the largest public companies in the U.S. is over a trillion dollars, according to the REL research.

The U.S. economy was slow but stable, with gross domestic product increasing by 3.2 percent in 2013. But at the same time, the REL research found that gross margins decreased by 0.3 percent, indicating that companies are spending more internally to generate revenue.

The researchers also found that companies are continuing to borrow, using low interest rates to improve their cash position, with cash on hand increasing by 12 percent, or $110 billion. At the same time, companies continued to ramp up capital expenditures, which have risen by 43 percent over the past three years.

The value of total net working capital rose by 3.2 percent in 2013, and days working capital improved by less than 1 percent. While days sales outstanding and days payable outstanding improved only slightly, days inventory on hand showed no change at all.

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