Freight Budgeting for 2021 is going to be very different from the traditional budgeting done in previous years. The effects of the economic shutdowns stemming from the COVID-19 crisis have trickled down to Q4 and have managed to create unforeseen supply chain challenges for business operations across North America. Organizations have addressed and responded to the situation in various ways and the adaptations have been unique to each market and industry served. With this same principle applied there cannot be one standard transportation budget methodology applied while planning for 2021 The ability to respond to these challenges will determine the future strategies required in 2021 to ensure recovery and possible profitable performance.
The essential goods movement surged in the past months, and different modes were preferred to move these goods.
Freight Budgeting then vs. now
The evident change in consumer behavior and the booming e-commerce marketplace has opened access to new consumer segments relying on faster doorstep deliveries for products that were earlier purchased the traditional way. The essential goods movement surged in the past months, and different modes were preferred to move these goods. The industry saw more parcel shipment related movements and trucking kept the economy afloat. The crisis brought many digitization initiatives to the forefront and accelerated technology innovations. The need for advanced analytics has been stressed time and again to enable businesses to respond better to disruption.
Budgeting for 2021 will need mapping existing resources with strategy and a shift from the traditional inputs and standard approaches.
Amidst all the industry changes and shifts, the crisis has brought in excellent opportunities to learn and implement new strategies for 2021. Budgeting for 2021 will need mapping existing resources with strategy and a shift from the traditional inputs and standard approaches. The need for more incredible speed and cost control spans across all industries, therefore making it a challenging task to achieve a perfect budget for 2021. The traditional approach to budgeting, whether bottom-up or top-down, can face roadblocks with repeated negotiations and may ignore syncing strategy with value creation and resource allocation. Therefore, the 2021 budgeting should be a strategic exercise that considers data insights to unlock value and bring flexibility in resource allocation to ensure desired resilience in the supply chains.
Predictive Analytics regarding supply chains can help provide some actionable insights into the budgeting process. The data insights can help predict customer responses or purchase behavior based on 2020 to suggest better ways to respond to demand in the coming year. Questions like how has the crisis impacted other stakeholders across geographies and what are their implications in freight budgeting for 2021?
Streamlining the freight budget process
Streamlining the freight budget process to be more responsive in disruptive scenarios is essential. The procedure to achieve such streamlined and efficient budgeting may vary from business to business this year. What may work for one company may not drive results for the other.
Comparing the recent trends and linking operational KPIs with strategic plans are elemental to drive data regarding the actual impact the business has endured in times of this economic crisis. How has the economic crisis impacted liquidity risks and how the uncertainties in the market impact these operational KPIs must be understood to plan the recovery and the strategy governing the freight budget for 2021.
A careful assessment of all factors that brought about the level of disruption for businesses this year will determine the strategies for 2021. Some may have to focus on sustaining the business while others may focus on restructuring the business to match the demand.
Finalizing Your 2021 Freight Budget Webinar October 21
At BlueGrace, we are addressing the need for a more strategic approach to freight budgeting in 2021 through a webinar. Join us on 21st October on this interactive session to learn how to steer your budgeting exercises for 2021 to build a more robust and agile supply chain for your business. We will address the burning questions related to planning the freight budget this year and discuss how BlueGrace is helping navigate the uncertainties of post-pandemic normalcy.
- How can you utilize predictive analytics to increase profitability?
- How can you streamline the overall budgeting processes to react more quickly and efficiently?
- How can you link operational KPIs with strategic plans and provide real-time data about the effect of the COVID-19 crisis on your company?