All Supply Chain Leaders are concerned about escalating supply costs, but when paired with customer demands and increasing logistical complexity, it can feel like an uphill battle. This cost pressure is most apparent in the Retail space, where companies must combat the eCommerce wave. However, regardless of the industry, cost is always number one or two on the list. Figure 1 compares how Best-in-Class companies prioritize the pressures they face compared to All Others.
Although faced with the same conditions, the Best-in-Class are much more concerned about the increasing complexity of security regulations (48%) and rising supply chain management costs (40%). Part of the concern over security regulations is that they also result in increased costs to address the rising security regulations. The Best-in-Class also cite growing global operations and escalating service demands from customers as additional pressures.
All Others cite the complexity of global operations as their number one pressure, with cost being second, which indicates they are finding it difficult to manage the complexity of global operations. They focus internally on managing operations, while the Best-in-Class identify external forces that cannot be left to chance and must be dealt with.
We now turn to the specific capabilities of the Best-in-Class from a global trade and transportation cost perspective. Figure 2 provides the core GTM capabilities that the Best-in-Class companies have in place compared to All Others. These supporting capabilities are key to the international seamless flow of goods. For every core capability, the Best-in-Class have a clear advantage, which is why their compliance and cost metrics are so much better. Of the Best-in-Class, 77% have access to trade-related content such as tariffs and HTS codes, which is 57% more likely than All Others. This makes them faster and less likely to misclassify their product.
The Best-in-Class are also 61% more likely to have automated screenings against restricted, denied and sanctioned lists, which is another supporting reason for the higher compliance and on-time percentage performance. They are also 39% more likely to have compliance to security regulations and policies, which was one of their top pressures. Even though they are ahead of their competition by over 50%, only 46% are likely to have this capability in place, which adds to their concern over increased security regulations. Communication and document exchanges with brokers and customs organizations is an advantage for the Best-in-Class and a heavy contributor toward increasing on-time delivery.
For an in-depth look at reducing your global logistics cost, please read the full report.