Over the past decade, the supply chain industry has undergone dramatic changes. Increasing e-commerce, quick delivery demands, and environmental concerns are all presenting new challenges for supply chain managers.

With supply chains becoming increasingly complex, logistics companies are turning to software solutions to help them reduce costs and improve service.

Why Is Logistics Optimization Important?

The supply chain industry often uses the term “logistics optimization” or “sophisticated analytics” when referring to supply chain management software (SCM) solutions which not only provide supply chain professionals with different tools but also blend multiple technologies into one cohesive platform. 

Though this may sound like a simple task, supply chain professionals must make sure that the solution they choose will help them achieve their supply chain goals and improve customer service without putting additional workload on supply chain employees.

Software such as sophisticated analytics gives you a comprehensive view of the supply chain. It combines all the information from across your supply chain.

Here is a brief overview of how logistics optimization enables supply chain management:

  • Minimizes supply chain costs. 
  • Maximizes supply chain performance. 
  • Helps manage supply chain variability and risk. 
  • Provides supply chain flexibility to respond quickly to changing market conditions. 
  • Increases supply chain agility and responsiveness. 

It also leads to increased supply chain agility, flexibility, and transparency within the supply network. This offers a more competitive advantage in today’s fast-moving environment where time-sensitivity of delivery has become essential to many businesses’ lines of business operations. ​

How Does Logistics Optimization Software Work?

Increasingly, logistics companies are starting to understand that their supply chain data has value beyond the information gathered by supply chain software solutions. 

By analyzing trends and patterns, some logistics optimization solutions can provide predictive elements so that companies can expand into new markets or make other improvements to the supply chain before supply risks arise.

For instance, predictive analytics looks at information that is already known and can be extremely helpful in supply chain planning. Knowing the supply chain data will help you predict what will happen.

However, It can be challenging to find patterns in logistical data due to its size and complexity. This is where logistics optimization comes into play.

In order to identify areas for improvement, logistics optimization software analyzes supply data from different departments like sales, marketing, logistics, and other areas.

Logistics organizations can measure supply chains more accurately than ever before with data analysis tools, reporting on everything from patent management to out-of-stocks across multiple locations.

Using Supply Network Design Software

Since all of this data and optimization can be a bit overwhelming, a supply network design program will tie all of this together so everyone can visualize their supply networks geographically. The supply risk analysis data is a key component of supply chain optimization software.

Supply network design software can be used to model supply chains and support network strategy formation. It assesses supply potential, capabilities, uncertainties, and competitive threats from internal or external threats. 

By using sophisticated analytics, logistics professionals can determine the best supply-chain structure for their businesses.

For example, if you run a consumer business, you might want to start focusing on your partners who are close to end-users. What this solution does is allow companies with limited resources to look at these decisions strategically.

Using Supply Chain Management Software

Supply chain management software can also track performance indicators such as order fill rates, inventory levels, and supply chain costs. Supply networks grow when supply chains are successful. 

In order to understand and plan for the growth of supply networks, planners need supply network design software.

Supply planner software makes use of advanced algorithms and data analysis to track supply and demand across numerous locations. It allows logistics managers to identify where inventory is being held up along the supply chain so that they can decide whether any changes are needed. 

It also integrates with sophisticated analytics software so logistics professionals can access reports that show detailed information about many different points throughout the supply chain. 

This includes current stocks, inventory levels at different warehouses, pending orders or shipments that could be delivered if another order were canceled, out-of-stocks at different locations throughout the supply chain, and supply forecasting.

Several supply planning software providers have added advanced tools to their products to cater to the needs of supply planners. The software allows them to analyze complex supply chains with thousands of locations and hundreds of supply branches, as well as do detailed transportation analysis for each mode of transportation.

The Future of Logistics Optimization is Now

All types of businesses involved in supply chains rely on logistics optimization software, including manufacturers, distributors, and transportation companies. 

By combining risk analysis data with planning tools for tracking supply-demand versus capability, supply chain software has enabled logistics professionals to make network design decisions quickly and effectively.

Using supply chain management software allows you to look at your entire supply network strategically. You can analyze supply risk at different locations, measure the performance of your supply chains or optimize your networks.

Logistics companies can increase their competitiveness locally and globally by using sophisticated analytics software.

Looking for the right software development partner? RTS Labs has helped hundreds of businesses of all sizes successfully develop the right outsourced logistics & supply chain custom software for many business needs. Get in touch with us today to learn more about how we can help.