Air Cargo

Air Freight Long-Term Contract Challenges

Revolutionizing Freight and Transport Through Digitalization

The modern-day supply chain, a critical component of global commerce, faces increasing challenges, including those presented by long-term contract challenges. With ‘Supply Chain Air Freight Long-Term Contract Challenges’ at the forefront, the intricate nature of contracts, numerous stakeholders, and the rapidly changing landscape of cargo movement become even more evident. There’s a need to streamline processes and improve efficiency. The pandemic has only amplified these issues, but where there’s a challenge, there’s also an opportunity: the potential for digital transformation in freight and transportation.

The Problem Deep Dive

Air Freight Contract Duration

Prior to the pandemic, air freight contracts within the supply chain usually lasted a quarter or a year. Yet, the crisis drove numerous freight forwarding firms and direct customers to secure longer-term agreements to ensure they had adequate space. However, a notable downside of these extended contracts is their strict penalty clauses for early termination. While these penalties offer security to service providers against abrupt cancellations, they pose constraints for clients, limiting their flexibility. Today, there’s a prevalent trend of multi-year charter contracts still being active in the market.

Complex Paperwork and Compliance

With global trade comes the need for rigorous documentation. Freight contracts, regulatory compliance paperwork, customs declarations, and more are now an inevitable part of the supply chain. Longer-term contracts further complicate this scenario. This often translates to tedious manual processes, delays, and potential for error. Administrative inefficiencies, particularly with customs paperwork, can hold up cargo for days, considerably influencing cost and delivery timelines.

While border compliance procedures have long been a challenge, with almost 30% of all global trade costs in 2020 attributed to them, it’s worth noting that such issues aren’t directly tied to the pandemic. Instead, geopolitical events such as Brexit play a significant role in shaping these documentation procedures.

Fragmentation in the Supply Chain

One of the most pressing challenges is fragmentation and lack of visibility across the supply chain. From manufacturers to transport providers to end retailers, the absence of a unified platform creates inefficiencies and uncertainties. A shipment in international trade often involves 20-30 parties and over 40 documents. Such fragmentation can elevate costs by 15% and slash service quality by 30%.

Ship full load during Covid

Pandemic's Impact

COVID-19 further complicated the logistics landscape. The unpredictability brought about by the pandemic made stakeholders seek guaranteed access to transportation space and rigorous compliance adherence. This desire for stability, however, collided with a fluctuating contract landscape and volatile cargo movements, leading to a magnified demand-supply gap. 

In April 2023, the International Air Transport Association (IATA) highlighted a pressing issue of overcapacity in the global air cargo sector. While the demand for air cargo decreased by 6.6% compared to April 2022, the available capacity to transport cargo surged by 13.4%, exceeding pre-COVID levels. This disparity between reduced demand and increased capacity presents a significant challenge for the industry.

Embracing the Digital Era: The Path Forward in Global Trade

Integrated Digital Platforms

To address the complex landscape, integrated digital platforms have emerged as a potent solution. These platforms offer centralized contract management, automated compliance checks, and real-time visibility into cargo movements. Firms with digital supply chain platforms can boost their operational efficiency by 10%. A staggering 85% of enterprises predict that within the next half-decade, integrated platforms will become pivotal in supply chain management. Integrated technology isn’t just a buzzword.


A comprehensive look at the Digitally-Driven Growth: A Holistic Approach to Aligning Supply Chain Objectives with Broader Business Goals  case study reveals its tangible benefits. The study found that such technology can facilitate seamless communication and data-driven operations in the supply chain.

Blockchain & Smart Contracts

The integration of blockchain ensures data security, transparency, and verifiability. Smart contracts can automate contract execution based on predefined conditions, significantly reducing manual intervention and the potential for disputes.

Blockchain in Supply chain

A recent research publication from Agile Dynamics estimates that blockchain technology will increase the Global GDP by $2.1 Trillion and almost half of it will come from B2B growth markets, which indicates the expectation of widespread adoption and innovation of blockchain in various industries and markets globally. The adoption of smart contracts can cut business expenses by an average of 13% by eradicating manual touchpoints and middlemen.

Predictive Analytics

Advanced analytics provides stakeholders with predictive insights into market trends, allowing them to anticipate challenges and adapt accordingly. It also aids in the optimization of routes, storage, and even pricing.

According to Harvard Business Review “Retailers lag in adopting advanced data analytics due to cultural resistance, organizational issues, talent shortages, unclear processes, outdated systems, and data management challenges. It recommends fostering an analytics-friendly culture, organizational redesign, and strategic investments in technology and talent for businesses to leverage the full benefits of analytics.” 

Predictive Analytics

Firms employing advanced analytics boast 33% higher profit margins compared to their non-adopting counterparts. 62% of retailers and manufacturers saw significant enhancements in their supply chain operations after incorporating predictive analytics. 

Analytics not only helps in anticipating market trends but also in evaluating contract performance. By applying analytics to contract terms, businesses can assess metrics like revenue productivity per container or per mile. This offers insights into whether long-term contracts are financially viable or if they need revisiting.

Analytics-Driven Contract Management

In the realm of digitalization, merely moving contracts to digital platforms isn’t enough. The true power of digitization lies in leveraging analytics to understand and optimize contract terms. For instance, determining the ‘revenue productivity per container’ or ‘revenue productivity per mile’ can offer insights into the true cost and effectiveness of long-term contracts. Such granular analytics can guide companies on whether the long-term contract model is beneficial or if adjustments are needed. By evaluating these metrics, organizations can make informed decisions about restructuring their contracts, ensuring they get the best return on investment.

End-to-End Visibility

One of the most invaluable features of these digital platforms is the promise of end-to-end visibility. For companies, this means being able to monitor their supply chain in real-time, right from the point of origin to the final delivery, ensuring better coordination and decision-making.

According to this article form Supply chain digital, “Supply chains are lagging in adopting modern visibility technology, with a lack of real-time data and cross-company collaboration hindering progress, says Ryan Closser from FourKites. A Deloitte report reveals only 13% of firms can map their entire supply chain, while 22% lack visibility beyond immediate suppliers. “

End-To-End Visibility

Visibility is vital for operational efficiency and future resilience. Businesses with end-to-end supply chain visibility enjoy a 20% reduction in the cost of goods sold. This is evident in the case study of Digital Transformation in Logistics: Enhancing Efficiency and Performance with End-to-End Supply Chain Visibility.’ In this study, it was clear that digital tools can significantly enhance efficiency, enabling real-time tracking and data-driven decision-making in optimizing the supply chain. It underscores the necessity of such visibility tools in today’s complex logistics landscape. Enterprises that possess real-time supply chain transparency can diminish stock-outs by 50%.

The digital tide waits for none

The freight and transportation sectors are at the forefront of a pivotal digital transformation. As the pandemic amplifies global challenges, the industry’s course is indelibly linked to its prowess in embracing and leading with digital innovations. Beyond just strategic moves, digitalization emerges as an essential pillar for resilience, growth, and efficiency in our complex global commerce matrix. This isn’t about passive adaptation—it’s a clarion call. 

The data sends a clear message: Embrace digital tools to eradicate inefficiencies and cultivate nimble, adaptable supply chains. Integrated platforms, blockchain, predictive analytics, and end-to-end visibility aren’t just advantages; they’re imperatives. Every stakeholder, from manufacturers to retailers, must spearhead this change.

Act now, not only to remain relevant but also to carve a dominant position in the future tapestry of global trade.

Supply chain management

Supply Chain Optimization – Localized Decision-Making

Local supply chain decision-makers have a clear edge, with an impressive 83% likelihood of making informed and effective decisions

This can be largely attributed to their immediate, hands-on involvement in operations, which lends them unique insights—a clear demonstration of the value of localized decision-making in supply chain optimization. Furthermore, evidence shows that decisions grounded in a localized or cross-functional approach prove practically successful in 57% of instances, underscoring their effectiveness.

But how this can be achieved? 

The answer lies in adopting a localized and cross-functional approach to decision-making.

Here’s what a local decision-maker brings to the table:

  • Deep Knowledge of Relevant Variables: They have a keen understanding of the variables that should be factored into their decision models.
  • Comprehensive Variable Inclusion: They ensure all pertinent variables are accounted for in their decision models.
  • Assurance of Data Accuracy: They validate the data representing these variables, ensuring it is precise and reliable.
Supply chain Decision making Local vs Centralized

What is the implication of integrating digital technology with localized decision-making?

Presently, the digital analytics tools at our disposal tend to favor global decisions over local ones.

It’s crucial to harness the unique perspective of local decision-makers. Armed with specialized knowledge about their region, suppliers, and customers, local decision-makers’ insights can be instrumental in enhancing operations, spotting opportunities, and effectively managing risks.

We should focus on these three key areas:

  • Digital Transformation of Local Decision Models: Move towards the digitization of local cross-functional decision models to streamline processes.
  • Global Technology Infrastructure Development: Refine the global technological framework to expedite localized and cross-functional decision-making.
  • Customer Empowerment: Enable customers to take the reins, equipping them with the tools they need to become self-reliant in their transactions and interactions.

How did we do it?

Case Study: Optimizing Supply Chain Decision-Making through Localization

In today’s globalized world , characterized by intricate business landscapes, optimizing decision-making in supply chain management is the linchpin of seamless operations and the preservation of a competitive edge. This case study takes a deep dive into the transformative influence of localized decision-making within the scope of supply chain management. It explores how local supply chain decision-makers, with their heightened human visibility and proximity to operations, are more likely to make good decisions, resulting in improved overall performance.

Our client is a multinational manufacturing corporation which operates in multiple countries and has a complex global supply chain network. As a producer of consumer electronics, they need to ensure tight-knit coordination among a range of suppliers, distributors, and retail partners to meet the demands of their customers effectively and efficiently.

Implementing Localized Decision-Making:

Our client’s transformation strategy, focused on ‘Supply Chain Optimization – Localized Decision-Making’, revolved around decentralizing the decision-making process. This innovative approach empowered local managers and employees, leveraging their intimate knowledge of regional nuances and specific expertise. To foster a comprehensive perspective on decision-making, cross-functional teams were established, composed of members from procurement, production, logistics, and sales departments.

Embracing the digital age, our client recognized the value of incorporating technology to streamline their supply chain operations. Key digital technologies included:

  • Real-Time Data Analytics: The company implemented robust data analytics systems that collected and analyzed real-time data from diverse sources, including sales, production, inventory, and logistics. This gave local decision-makers access to timely, accurate information, and the ability to make data-driven decisions based on the real-time status of the supply chain.
Real-Time Data Analytics
  • Supply Chain Visibility Platforms: The deployment of these platforms allowed decision-makers to track and monitor the flow of goods throughout the supply chain. These platforms integrated data from various stakeholders—including suppliers, manufacturers, logistics providers, and retailers—providing a comprehensive view of the supply chain and facilitating cross-functional collaboration.
Supply Chain Visibility Platforms
  • Collaborative Planning Tools: The company adopted collaborative planning tools to foster real-time communication and collaboration among local teams. These tools promoted real-time communication, document sharing, and collaborative decision-making, resulting in improved coordination, faster resolution of issues, and better alignment of supply chain activities.
Collaborative Planning Tools

By empowering local supply chain decision-makers, capitalizing on their unique human visibility, and promoting cross-functional collaboration, we observed a significant uplift in decision-making effectiveness and overall supply chain performance. This case study underscores the power of localized decision-making as a strategy to drive operational excellence and secure a competitive edge in a fast-paced, complex business environment.


Supply Chain Digital Transformation

Inflation is driving CFOs to focus on cash from the supply chain, while recessionary signals amplify the CEO’s calls for the supply chain to be an engine for growth. Is it possible ?

Exploring the Feasibility:

To strike this balance, the spotlight must be directed toward optimizing network performance rather than focusing solely on cash flow or growth. Prudent design choices, illustrated by scenarios and supported by complexity management and digital execution, pave the way for effective supply chain digital transformation.

Unpacking Informed Design Choices:

Informed design choices necessitate aligning supply chain objectives with overarching business goals, and identifying the drivers or specific actions that are most likely to affect the achievements of those objectives.

Drivers for metrics to measure Supply chain objective
Source: Gartner (Reference)

How do we enable supply chain design choices using digital transformation? How did we do it?

Aligning Supply Chain Objectives with Broader Business Goals: A Case Study on “Supply Chain Service and Collaboration” Utilizing Digital Tools


Supply chain service and collaboration involve the coordination and cooperation between different entities within a supply chain network to optimize operations, improve efficiency, and deliver value to customers. This collaboration is facilitated through various technologies and tools.

In this case study, Our client initiated several initiatives to align its supply chain with the identified drivers and achieve its objectives. One such initiative was the launch of a customer portal for order tracking and status updates, which resulted in a remarkable 15% improvement in on-time deliveries and significantly boosted customer satisfaction.

Solution and Technology Landscape:

Overall, supply chain service and collaboration rely on a combination of technologies, software, and frameworks to enable efficient coordination, effective information sharing, and value creation across the entire supply chain network.Cloud-Based Collaboration Platforms, such as Microsoft Teams, and SharePoint, enable real-time communication, document sharing, and collaboration among supply chain stakeholders. They provide a centralized space for discussions, decision-making, and sharing of important information.Before our involvement, communication was impeded by a torrent of emails and spreadsheets, making logistics arduous and exposing our clients to potential errors. However, with the introduction of portals and collaborative platforms, our client consolidated these communications.

Supply chain portals and collaborative platform design
  • Implemented a customer portal to serve as a centralized platform. This move provided customers with access to information, order tracking, and self-service activities, thereby enhancing convenience and enriching the overall customer experience.
  • Utilized SharePoint as a content management and collaboration platform, enabling teams to create, share documents, manage workflows, and collaborate on projects effectively.
  • Incorporated Office 365 to offer a suite of productivity tools, including access control. This facilitated seamless document creation, editing, and communication.
  • Applied Power BI, a business intelligence tool, to visualize and analyze data from various sources, resulting in the creation of interactive reports and dashboards.
  • Adopted PowerApps for the creation of custom mobile and web applications without the need for coding. This approach allowed for the construction of tailored solutions to meet specific needs.
  • Used Power Automate to automate repetitive tasks and workflows by connecting different applications and services, thereby enhancing efficiency and productivity.
  • Integrated SharePoint with Power BI, enabling the embedding of interactive reports and dashboards within SharePoint sites and ERP for data-driven collaboration.
  • Leveraged PowerApps to create custom forms and interfaces that interact with SharePoint lists and libraries, thus streamlining data entry and retrieval processes.
  • Automated SharePoint processes, such as document approval workflows, using Power Automate. This approach triggered actions based on predefined conditions and events.
  • Integrated Office 365 with Power BI, allowing the import and analysis of data from various Office 365 applications, such as Excel and SharePoint

Overall, this integrated technology stack provides organizations with an exhaustive suite of tools for document management, collaboration, data analysis, custom application development, and process automation.

In summary, the deployment of collaboration tools and file sharing capabilities within supply chain operations yields significant advantages, marking a key step in the journey of supply chain digital transformation.. They enable efficient and streamlined collaboration, reduce email congestion, and enhance the management and sharing of files and documents within the supply chain ecosystem. These benefits manifested in the form of a 15% uptick in on-time deliveries and an increased customer satisfaction for our client.

Health care Inventory management

Supply Chain Healthcare inventory

Chief Supply Chain Officers are perpetually on the quest for strategies to elevate their departments, with time and cost efficiency at the forefront. How to master organizational execution to achieve this KRA?

How to master Organizational execution?

There are 27 key supply chain activities. Efficiently administering and mastering these activities can significantly enhance organizational execution to manage Supply chain functions like Planning, Sourcing & Procurement, Inbound & Outbound Logistics, Manufacturing, and Warehouse & Inventory Management, as well as Distribution.

Supply Chain Key Activities for Organizational execution
Source: Gartner (Reference)

How did we do it?

Revolutionizing Supply Chain Inventory Management: A Case Study in the Healthcare Industry

This case study showcases the successful implementation of an advanced inventory management system for a healthcare customer to streamline their supply chain. Facing significant losses due to inefficient handling and lack of proper inventory maintenance, the hospital collaborated with our organization to overhaul its inventory management processes. Through an accuracy rate of 87%, shrinkage amounting to a staggering 1.5 million USD was eradicated, paving the path for enhanced cost savings and superior operational efficiency.

Inventory management plays a vital role in the healthcare industry, where the misplacement or loss of key items can have severe consequences. Recognizing the need for robust inventory control, a healthcare provider engaged our organization’s expertise to address their persistent inventory management challenges. This case study portrays the successful implementation of an accurate inventory management system, resulting in substantial cost savings and improved operational efficiency.

The healthcare provider faced significant losses in their inventory, primarily due to the mismanagement and inadequate record-keeping of small, bulk-packaged items. The absence of precise tracking and maintenance processes resulted in inventory shrinkage and substantial financial losses for the hospital. Consequently, they approached our organization to implement an efficient inventory management solution.

The primary objectives of the project were as follows:

  • Enhance inventory accuracy and visibility.
  • Eliminate shrinkage and losses caused by inefficient inventory handling.
  • Improve cost savings and operational efficiency.
  • Streamline inventory management processes.

A systematic approach was adopted to address the healthcare customer’s inventory management challenges.

  • Assessment and Gap Analysis: Performed a comprehensive understanding of the client’s current inventory management processes, identification of lacunae, and strategizing potential solutions.
  • System Design and Implementation: Designed and deployed a cutting-edge inventory management system, customized for the unique needs of the healthcare sector, including barcode scanning, automated stock reconciliation, and real-time inventory tracking.
  • Training and Change Management: Intensive training sessions were held to acquaint hospital staff with the new system, underlining its advantages and addressing any concerns or resistance to change.
  • Monitoring and Support: Continuous technical support and system performance monitoring were ensured for seamless integration within the hospital’s operations.

Solution Context:

The solution can be visualized in the diagram below.

Supply chain Solution Context

The experience layer emphasizes user-centric design and interface, the process layer focuses on optimizing operational workflows, and the system layer deals with the underlying infrastructure and technical aspects of the overall system. These layers work together to provide a seamless, efficient, and reliable experience for users and ensure the successful functioning of the system.

Results and Analysis:
Following the implementation of the advanced inventory management system, the healthcare customer achieved remarkable results:

  • Increased Inventory Accuracy: An impressive accuracy rate of 87% dramatically cut down discrepancies, enhancing visibility into the hospital’s inventory. This facilitated more precise item tracking, mitigating the risk of misplacements and stockouts.
  • Eliminated Shrinkage and Losses: With precise tracking and real-time inventory updates, the hospital successfully neutralized shrinkage and losses associated with the small packaged items. The financial repercussion translated into cost savings estimated at 1.5 million USD annually.
  • Enhanced Operational Efficiency: The streamlined inventory management processes resulted in improved operational efficiency. Staff members could swiftly locate items, cutting down the time expended in searching for inventory and allowing for superior resource allocation.
  • Improved Patient Care: The implementation of an accurate inventory management system ensured that the hospital always had the necessary supplies at hand. This resulted in superior patient care, minimizing any delays or disruptions caused by inventory shortages.

By deploying an advanced inventory management system with an accuracy rate of 87%, the healthcare provider successfully surmounted their inventory management challenges. The hospital witnessed significant cost savings and operational enhancements, eradicating shrinkage worth up to 1.5 million USD annually. This case study underscores the crucial role of efficient inventory management in the healthcare sector, empowering organizations to optimize resources, enhance patient care, and realize significant cost savings.