Supply Chain Best Practices Consortium

Transcription

1 Supply Chain Best Practices Consortium Freight Routing Executive Seminar Supply Chain Leadership Forum Track A, Session 8 September 12,

2 Session Scope This session covers best practices for Freight Routing, as well as Supply Chain Consortium and industry trends. Is Freight Routing a core competency? Modal Integration: Overcoming the absolute paradigm Let the Debates Begin: Delivered vs. FOB / CPU vs. Delivered TMS Functionality: Using what you already have Discussion of Freight Routing opportunities 2

3 Summary Findings 90% of participating companies have outsourced some aspect of Transportation. 40% are considering additional changes. Individuals tend to think in modal absolutes each load should be considered for integration potential. The same is true for owning the freight spend: o Controlling freight is not the same as owning freight. o Utilize CPU (outbound) and delivered pricing (inbound) where it makes sense. 3

4 Summary Findings (continued) TMS s are a superior way to make transportation decisions. Companies are not always maximizing the use of existing TMS technology. TMS is also being utilized by individuals outside the transportation department to improve service and workflow. 4

5 Best Practices Internally-Sourced Functions Determine Core Competencies and Consider Outsourcing: 90% 80% 70% 60% 50% 40% 30% Carrier selection 20% Freight Sourcing Contract Admin Carrier Selection Load Tendering TMS- Technology Freight Pay & Audit Claims Management Load tendering TMS technology Freight pay & audit 25% 20% Considering Sourcing Change 15% 10% 5% Freight Sourcing Contract Admin Carrier Selection Load Tendering TMS- Technology Frt Pay & Audit Claims Mgt 5

6 Best Practices Keep routing guides current and enforced: Critical for delivering against objectives Meeting internal and external expectations Routing Guides Enforced via TMS 10% 57% 16% 17% Always Most Some Never Maintaining carrier goodwill Routing Guide Compliance Current Goal Average: 83.1% 96.3% Hi: 100.0% 100.0% Low: 10.0% 25.0% 6

7 Best Practices Modal Integration Intermodal Freight Terms Prepaid Collect Multi-stop TL Vendor to DC 50.3% 49.6% Control (not necessarily own) the freight Vendor to IB Consolidation Center Vendor to Manufacturing Facility 36.1% 67.6% 63.9% 32.4% Inbound: FOB vs. Delivered Vendor to Store direct Vendor direct to customers 59.6% 40.9% 40.4% 59.1% Outbound: Delivered vs. CPU 7

8 Best Practices Utilize TMS Companies Using a TMS Take full advantage of functionality 46% 54% Not just for the Transportation Department TMS Functionality Utilization Capture Vendor PO/Order from OMS: Select Optimal Routings: Create Consolidations: Select Optimal Carriers: Book Shipments: Self-invoicing Audit freight bills: Companies Using 72.9% 64.6% 66.7% 64.6% 62.5% 18.8% 43.8% Inbound 72.5% 70.5% 52.5% 71.8% Yes % of Shipments 74.5% 73.0% 66.4% No Companies Using 77.1% 75.0% 66.7% 75.0% 60.4% 16.7% 41.7% Outbound % of Shipments 84.2% 73.3% 67.5% 70.8% 74.4% 74.3% 60.9% 8

9 Trends Consortium Profile: TMS Software 22% 31% 5% 5% 5% 9% 11% 5% 7% BGI G-Log i2 Internal Development Logility Manhattan Associate Manugistics Other TruckMate 9

10 Discussion Points Has anyone recently decided to bring a service back in house after an unsatisfying outsourcing experience? What are some of the ways companies that do not use routing guides ensure that they are enforced? Is there anything to be learned from these processes? Intermodal solutions continue to grow and get more creative. Please feel free to share any recent success stories about getting product off the road. Are FOB/Delivered/CPU analyses really being done or are they being rubber-stamped in an effort to control the freight spend? What are the primary inhibitors to more fully utilizing TMS capabilities? How can these obstacles be overcome? 10

11 Important Takeaways While there are many Freight Routing takeaways, some of the more important are: Core competencies/outsourcing A brief assessment of what makes sense to do in-house should be performed annually, but the answer needs to be based on dollars and sense, not cents. Modal Integration Every load (not just every lane) has the potential to be shipped by a more economical form of transportation. Controlling freight spend is not the same as owning it A dispassionate, holistic analysis of where Delivered pricing and CPU makes sense will yield results to the bottom line. Just make sure all parties are accountable. 11

12 Important Takeaways (continued) TMS s are not being fully utilized Help can sometimes be as close by as flipping a switch. Even where this is not the case, additional functionality is usually a low-cost enhancement. The TMS role is expanding Long seen as a stand-alone package used by a handful of professionals for highly specialized processes, the TMS is evolving into a platform that users throughout the supply chain access to improve everything from production schedules to customer satisfaction. 12

13 Benchmarking & Best Practices References Additional information can be found in the following references: Hot Topic: Freight Bidding Survey: Order/Freight Terms Survey: Order/Freight Routing Survey: Technology/Process Management Articles: o Do s and Don ts of CPU, Supply Chain Edge, 06/2007 o TMS Right Now, Logistics Today, 05/2007 o How to Make Better Transportation Decisions, IndustryWeek, 06/