Great cost management matters more than ever, but it’s also harder than ever.
The mass fragmentation and lack of standardization just within your network alone is overwhelming. Trying to ensure performance within your four walls is a difficult task. Trying to improve performance beyond that with your suppliers and carriers can feel impossible.
When you’re hit with consistent changes in the supply chain, you don’t have the time to address structural issues since you’re always scrambling to fix symptoms. To succeed today, you need solutions that allow you to proactively manage your network and spend. The bottom line is:
Your current way of doing things is costing you money.
J.P. Morgan Payments Innovation team surveyed their portfolio of shippers and found that 60% of invoices are paper documents. Not to mention, 80% of companies manually key invoice data into a finance system of record. That’s a lot of time spent staring and comparing…and inevitably human-erroring.
The root cause of that problem is paper. Paper traps data. Paper traps people. Paper traps profit.
Your ability to understand your cost-per-lane, cost-per-shipment, and cost-per-product is stuck in filing cabinets or boxes, making it incredibly challenging to understand your total spend. In fact, bad data costs companies over $600 billion annually (TDWI).
Companies no longer need to incur unnecessary losses or miss growth opportunities because of bad data.
In this guide, learn how to:
Automate workflows to improve team productivity
Improve cost management and control
Centralize and unify supply chain and spend data
We’re breaking down the history and the future of the supply chain so you can identify where your company stands and how to instantly level up.
Supply Chain 1.0: Manual processes dependent on humans, pen, and paper. Supply Chain 2.0: Digital but disconnected systems and data. Supply Chain 3.0: The age of AI, powering visibility and automation to optimize your company’s performance. Supply Chain 4.0: What’s next? If 3.0 optimizes within your four walls, 4.0 optimizes outside of them. Imagine the possibilities.
Supply chain evolution: where do you stand?
The supply chain has always been the backbone of the economy. But with its complexity, razor-thin margins, structural inefficiencies, and dependence on legacy technologies, upgrading your processes and technology can feel Herculean. Not to mention, there is little clarity on where or how to begin.
You probably worked at companies that have been stuck in “digital transformation” for years now, with software that over-promised and under-delivered.
The digital transformation sold siloed software and databases that offered digitized, but manual, workflows. They took six months to two years to implement, draining morale and money. Once live, you got dozens (or hundreds) of disconnected datasets because each system came with different data terminologies and taxonomies.
Now, you’re sitting on a ton of data, but it isn’t usable. Sound familiar?
If you’re going to evolve, you need to know where your company stands across four core components of your operational efficiency:
Work
Data
System
Collaboration
Supply chain maturity model
Supply chain 1.0
Pens, paper and handwritten hell
From the Dark Ages to around the turn of the millennium, the supply chain operated exclusively in 1.0, without digital solutions. Teams used pens and paper to handwrite purchase orders, book shipments, and audit invoices. Several companies still operate here today.
The problem with manual work is that knowledge and data are offline, trapped in physical documents and physical people. Sifting through stacks of paper and chasing down answers is draining and error-prone.
Supply chain 2.0
New system, same problems
The invention of the cloud enabled digital systems of record, but data entry and workflows remained manual.
Take a large F100 food and beverage company for example. In their workflow, a truck pulls up to their loading dock with boxes of paper. A receiving clerk takes physical documents from the driver, walks it inside, and starts fat-finger typing each data point into a system. Grueling...and they have hundreds of people doing this process which takes days.
For reference, roughly 80% of all invoices are still manually keyed into a system today.
80% of all invoices are still manually keyed into a system today.
Why is this bad…?
At the end of the day you’re making decisions on outdated data at best, and inaccurate and outdated data, at worst.
While Supply Chain 2.0 is progress, digital but disconnected data brings its own challenges. Our team has personally spoken to companies with seven TMSs or individual dashboards for UPS, FedEx and DHL because the team couldn’t standardize and combine different carrier EDI feeds. These teams struggle to unify their data to get a get a holistic view of their supply chain and spend.
Then in 2020, COVID magnified the consequences of physical documents and manual work. Companies that didn’t invest in their people, processes, or technology suffered, or worse, went bankrupt.
Supply chain 3.0
Hello logistics-AI, goodbye headaches
You might think that AI is just a buzzword, a phase that won’t last after the initial hype wears off (ahem, blockchain). But Supply Chain 3.0 is powered by logistics-AI, not ChatGPT’s generic models.
The complexity of the supply chain required domain-specific models. Logistics data has a major problem: multiple “sources of truth” where data is disconnected by varying systems, structures, standards, formats, terms, quality, etc. Who hasn’t seen a blurry photo of a BOL? Or a picture of a picture of customer SOPs? “Sources of truth” and data are constantly added, abandoned, or adjusted as your internal systems and external stakeholders change.
This is where logistics-AI comes in. Models that can ingest all supply chain information regardless of systems, structures, standards, formats, terms, quality, etc. They are built for the supply chain domain and language, so they can contextualize, categorize, extract, and standardize each data point.
Logistics-AI constructs a comprehensive but flexible view so you can assess your business at any level (network spend, cost per accessorial per carrier, cost per product, etc). Think of it like finding constellations in the night sky - each data point is a star and you can connect them into constellations to tell different stories. Unlimited connections mean deeper insights and faster automation than previously thought possible.
True logistics-AI learns from your network’s documents and data so it’s contextualized to your supply chain. This means it becomes more accurate and efficient as your network evolves and grows.
With usable, accurate, and dynamic financial and operational data, you can automate workflows, optimize spend, and uncover growth drivers.
If Supply Chain 3.0 optimizes your supply chain inside your four walls, then Supply Chain 4.0 empowers you to optimize outside those walls. If you are not in 3.0 today, you will be left behind.
Supply Chain 4.0
Optimized network of networks
Supply Chain 4.0 is an optimized network of networks with AI’s autonomous execution. Specialized AI agents execute work and communicate with other AI agents across companies and networks.
Imagine instantaneous procurement of goods: perhaps you get an indicator that shows you’re running low on a good, which automatically sends a signal to execute an order. This will trigger a sales order in your supplier systems, which will initiate products to be pulled and packaged. Then, all other actions will automatically execute. The possibilities are endless.
You might have supplier closed loops with your tier one supplier base, allowing for financial flow at all levels of transportation and supply chain. The industry shifting from supplier financing to marketplaces, even AI generated forecasting and budgeting freight bids.
4.0 offers steep competitive advantages. But in order to get that, you need to be operating in 3.0 today.
Assessing the maturity of your entire supply chain is overwhelming. So start with your transportation and finance operations. Fill out the following assessment to see where you stand in the supply chain evolution and understand where to optimize first.
Accelerate your transformation to 3.0
No matter where you’re operating today, Supply Chain 3.0 is well within reach. Here are three ways to accelerate your transformation to 3.0 with the power of logistics-AI.
1. Centralize and unify supply chain and spend data
Logistics-AI from Loop centralizes shipment and invoice data by ingesting data from any source (EDI, API, and email) or format (CSV, JSON, JPG, JPEG, PDF, PNG). Then Loop cleans and standardizes messy data to make it usable. You no longer have to do the mental gymnastics of mapping UPS’s Next Day Early AM Air to FedEx’s First Overnight.
Furthermore, it links all shipment data across carriers and docs to ensure consistency and accuracy. No more staring and comparing shipment IDs or purchase order numbers.
To build this solution in-house, it could cost you upwards of $1M+ in salaries alone, and this doesn’t take into account the time it will take to build, implement, and maintain.
Great Dane approves 98% of invoices with no touch
98
%
Invoices approved with no touch
$8.5
M
In spend audited via Loop
2
hrs
To process an invoice
Great Dane, a truck body and parts manufacturer, felt the pain of being stuck in Supply Chain 1.0 during the pandemic. Financial executive Jeff Toman recalls, “Everything was tied to paper, from auditing mailed-in invoices to printing checks.” Their team was chasing paper invoices and critical internal knowledge. Great Dane knew this wasn’t sustainable.
“Everything was tied to paper, from auditing mailed-in invoices to printing checks.”
After implementing Loop, Great Dane jumped from Supply Chain 1.0 to 3.0 in a matter of months. All they had to do was upload their shipment documents, invoices, and contracts to Loop. Now, they can access all of their supply chain and spend data with Loop’s self-serve platform and analytics.
95% of Great Dane’s invoices are audited and approved with no human touch. Loop has already audited $5.1M in spend with 100% financial compliance. And, it only takes 2 hours to process an invoice instead of days.
Loop has turned my team from processors to analysts.
But the biggest change for Great Dane was how Loop changed the way their AP and transportation teams work. It’s boosted their collaboration internally and with their carriers. This freed up the AP team’s time for strategic projects, while the transportation team can focus more on customer satisfaction.
Loop is not just software, it’s a competitive differentiator for Great Dane.
2. Improve cost management and control
Loop’s logistics-AI automates your audit workflow, ensuring you can accurately audit invoices with all shipment documents and receipts (tolls, cleaning, lumper, etc) in one system. Loop also digitizes your contracts and rate tables, so you don’t have to run complex calculations ensuring you don’t overspend.
Loop increases financial control by extracting all line-item data and allocated costs. It eliminates overpayments by auditing rate, service, or accessorial charges down to a penny. If there is a discrepancy, Loop shows the mismatch. This transparency streamlines resolution, helps fix structural issues, and improves carrier relationships.
When you have an approved invoice, Loop automates your payment. From managing different methods, terms, and timelines. Loop ensures you pay how you want, when you want, so you never unnecessarily drain your working capital.
Without logistics-AI, your team is stuck in reconciliation hell, which means poor financial and operational performance. With logistics-AI, you make cost-effective decisions and optimize spending throughout your supply chain.
Loop identifies 6% in transportation savings for GILLIG
Like many transportation companies, GILLIG’s Accounts Payable was spending 70% of their day doing manual, tedious tasks such as reconciliation, exception management, and approval workflows. As a result, AP managers spent less time on strategic work that could meaningfully impact their margin.
After partnering with Loop to improve cost visibility and eliminate unnecessary losses, they discovered $487,449 in savings opportunities across their LTL and parcel spend.
Loop transformed the way we do business, enabling us to capture data and utilize it for better insights on decision-making, from how we allocate transportation spend to negotiating carrier contracts.
Additionally, GILLIG uses Loop to know exactly what they need to pay so they have the flexibility to decide how and when to pay it. Loop provides GILLIG with their requested payment data (invoice number, invoiced amounts, receive date, due date, etc.) in a spreadsheet each week. From there, GILLIG releases payment to appropriately age their contracts and avoid late fees.
The level of granularity provided by Loop allows GILLIG to maintain working capital to boost profit.
3. Automate workflows to improve team productivity
Logistics-AI from Loop automates core workflows so your team can be more productive. Loop automates these workflows:
Document collection and management
Shipment and spend data centralization and standardization
AR invoice generation and orchestration (for brokers)
Network scenario planning and optimization
Supply chain and spend analysis
You need high-quality data, efficient processes, and complete cost control to optimize your financial and operational performance. Loop makes this happen.
Loop’s AI reduces BPO costs by 50%
Take a 3PL specializing in brokerage and managed transportation. Before they switched to Loop, they were operating in Supply Chain 2.0. They expanded their business to include LTL shipment offerings which drove revenue and growth. However, their financial control struggled because they didn’t have the internal expertise or scale to manage their volume of LTL carrier and customer invoices.
Before Loop, they entrusted their core AR and AP operations to expensive BPOs, who lacked supply chain expertise, and used manual, time-consuming processes. It was an inefficient system that didn’t give them complete visibility into their cost-to-serve.
Loop’s automation increased their accuracy and productivity which boosted their margin. Now 75% of their AP invoices are automatically approved and executed with 100% of their AR invoices generated and sent by Loop. With Loop’s AI they were also able to reduce their BPO costs by 50%.
Today this 3PL’s account and carrier teams spend more time focusing their expertise on building carrier relationships and booking more business.
Partnering with Loop skyrocketed this 3PL’s entry into Supply Chain 3.0.
Loop propels you to Supply Chain 3.0 in weeks…not years
Getting to 3.0 is imperative for future success, and Loop can get you there in a matter of weeks, with minimal investment for your team.
Book a discovery call with our solutions team. Even bring an over the road BOL and we can show you how it looks in our platform so you can see what Loop can do for you.
