March Recap: Transportation Technology to Supply Chain Services

As companies increasingly use their supply chain to compete and gain market share, leveraging transportation expertise is becoming a competitive advantage. From transportation technology to supply chain services, companies of all sizes are investing in an expert partner to help drive business growth. This reoccuring theme of innovative technology and holistic services is widely apparent in today’s supply chain market – here are three recent articles that define the importance of a logistics partner:

Tech to Services: Expertise Comes from Working Together
Logistics Viewpoints

Tech vs. Services: Is Outsourcing Transportation The Right Decision?
LeanLogistics

The Growing Demand for Flexible Transportation Solutions
Talking Logistics

Whether it’s utilizing transportation technology, outsourcing management, or combining technology and services, the most important factor in turning a business’ supply chain into a competitive advantage is to leverage expertise and find a collaborative partner.

ARC Advisory Group: Managed Transportation Can Offer Significant ROI

The decision to outsource any process, including transportation, involves many trade-offs between risks and benefits. Logistics teams are being challenged to ensure transportation serves as a competitive advantage. In the midst of an uncertain economy, transportation must enable growth while remaining flexible and scalable in rapidly changing environments. Management of a company’s supply chain is an important aspect of a corporate strategy, requiring expertise and special skills to minimize costs of shipments while maximizing service.

At the same time, the focus on managing tactics of logistics can pull employees away from strategic initiatives. Some companies may have an efficient and effective transportation team, only to have personnel changes in the department. Even if a transportation department has fewer resources, the company must still move products, be cost-effective, meet service levels and satisfy customers. Without the specific knowledge, resources and bandwidth, transportation is an area that can drastically affect a company’s bottom line and increase customer satisfaction.

Managed Services for transportation can offer a significant return on investment. The primary area in which transportation outsourcing can save a company money is by lowering its freight spend. Outsourcing the transportation process to experts who are highly skilled with access to business intelligence and supply chain visibility gives companies the ability to focus on more strategic supply chain initiatives. By streamlining transportation, companies gain more efficient processes while lowering costs.

“Managed services for transportation can offer a significant return on investment. The primary area in which transportation managed service can save a company money is by lowering its freight spend.”
Steve Banker, ARC Advisory Group

ARC Advisory Group released the report, “Return on Investment of Managed Services for Transportation”, based on a user survey to evaluate the benefits shippers received from using managed services for transportation planning and execution.

The report defines three major areas where shippers receive savings of 5-10%:
1. Increased usage of preferred carriers
2. Better procurement negotiations
3. Lower cost mode selections

Access your complimentary copy of “Return on Investment of Managed Services for Transportation” today to learn if Managed Transportation is a fit for your needs >>

Supply Chain Visibility: Not Another Pipe Dream

Occasionally, we’ll meet with a client that needs to grow, but doesn’t know how, or worse they know how, but can’t.  The corporate directive is to grow the organization by X%, but when they look to the supply chain to find ways to scale, a cold sweat starts breaking out.

Northwest Pipe Company, a leading manufacturer of welded steel pipe, was running in a decentralized manner, with each facility managing its own transportation and processes. There was a lack of consistency among the facilities which hindered the relationship with carriers. This decentralized management prevented Northwest Pipe from using corporate buying power to get the best rates from carriers. In addition, most processes were manual, being managed by fax, email, spreadsheets and phones. With the combination of decentralized management and manual processes, Northwest Pipe had very limited visibility across the transportation network.

In order to scale their business, Northwest Pipe chose LeanLogistics to implement best practices and further optimize day-to-day transportation management.   Listen to the webinar to find out how Northwest Pipe leverages supply chain expertise and relies on a scalable solution to reduce overall transportation spend

The results?  Northwest Pipe saved approximately 25% in the first year with a return on investment for the project within the first six months.  For this client, the cold sweats aren’t there when the supply chain needs to scale.  

New Year’s Resolution #3: Start Investing In A Transportation Network

With the New Year comes the hope of new opportunities – we make promises to change our eating habits, visit the gym more frequently, spend more time at home, and many more resolutions to strive to be a better person. So why not take this same practice and apply it to your supply chain? We’re resolving to help you better manage your transportation in 2014 – read the other posts in our New Year’s Resolutions series here>>

The third New Year’s resolution on our list is to ‘Start Investing in a Transportation Network’.  Tim Hinson, Senior Vice President of Global Supply Chain at LeanLogistics, shares his take on why companies of all sizes need to start investing in transportation network solutions.

Many of the supply chain industry challenges are not new in today’s world, just more complex. As an executive, what keeps me up at night regarding strategic supply chain initiatives is what needs to be done to keep up with the changing market while minimizing risk and removing inefficiencies in the supply chain. The proverbial sheep counting method to comfort me during these times is understanding the importance of continued investment in technology and process redesign / improvement.

The most important step before any type of investment is knowing the current market conditions and how they are changing. In the transportation world, we are seeing how Omni-channel distribution is driving many requirement changes for both B2C and B2B companies. Not only do shippers need to have visibility to carriers, vendors, and other supply chain partners, but end customers are now demanding more visibility into the supply chain. By investing in solutions like appointment and dock scheduling technology, companies can satisfy customers by improving supply chain visibility which leads to improve on-time performance. Especially with today’s consumers purchasing online and in-stores, this shift in buying habits requires shippers to have greater supply chain visibility throughout the order to cash process.

Prior to investing in transportation technology, Ace Hardware’s inbound transportation process was manually managed with spreadsheets utilizing inefficient processes and producing outdated information. Ace Hardware wanted better control of inbound transportation to automate processes, gain efficiencies, understand costs and identify areas for improvement. Now by leveraging LeanTMS™ transportation technology, the company has visibility to order and load statuses while providing information on true transportation costs. In fact, Ace Hardware estimates that LeanLogistics saved the company over $18 million dollars in transportation costs since implementation, with savings come from process efficiencies, such as selecting the right carriers and right modes.

“LeanTMS runs our daily operations and we harvest the visibility of real-time information to gain better control of transportation performance and cost,” said the Director of Transportation for Ace Hardware.

Once market conditions and projected changes are understood, the solution for achieving objectives typically hinge on technology and process changes.  Where many companies err is focusing on only one of those solutions.  Process falls apart without technology to execute and sustain it.  Amazing technology is useless in an organization without processes.  By combining both solutions and setting a direction toward where the marketplace is going, there will definitely be a return for that investment.

LeanLogistics has a long history of working with companies, such as Ace Hardware, on business process redesign providing better supply chain visibility and a competitive advantage. For outsourced transportation solutions, LeanLogistics offers Managed Transportation Services which provides the benefits of best-in-class supply chain processes without the burden of overhead, regulatory requirements and personnel issues. Email us to see how we can help to achieve your supply chain resolutions for 2014 >>

How Is Supply Chain Viewed In Your Company?

Image source: Russell Reynolds Associates

Although supply chain management is now a generally understood function in most companies, it still struggles to find its way to the top of the CEO’s initiatives list in many organizations. There could be a number of reasons for that omission, but many make the argument more complicated than it needs to be. Simply put: how is supply chain viewed in your company – as a strategic plan or a cost center?

While neither function type is the “wrong answer”, many organizations have a challenging time realizing exactly where supply chain stands in their overall company. And more importantly, what type of solutions can best handle their situation. From 3PLs to transportation management systems (TMS) to Managed Services, how do you know what makes sense for your organization? In order to help you determine how to approach this, here are 3 questions to help you get the conversation started with your supply chain group:

1. Is supply chain a strategic advantage or could it be?
For those companies that view their supply chain as a strategic advantage, they don’t need to try and become the next Amazon or Wal-Mart. Most companies beat their competition simply by having the visibility to their supply chain when others do not. Once that visibility is established, companies have a baseline of metrics to improve upon.

Those metrics come from compiling historical performance which can be difficult. The companies that leverage their strategic supply chain most effectively know they need to not only benchmark their performance, but they also need to be benchmarked across companies like theirs. Network based supply chain solutions offer those answers due to the size and depth of the transportation network.

Given the visibility and access to benchmark data, the supply chain can truly become a strategic advantage if it isn’t already today.

2. Is supply chain just a line item on your balance sheet?  
If discussions regarding this typically end with, “just spend less”, your company’s best option is to find the most cost-effective practice and put it into place. Those practices often require tools that bring efficiencies to the supply chain. From scheduling to managing carrier relationships to automatic freight payment, these solutions can help gain supply chain visibility while improving customer service.

3. Do the people in your organization have a deep and wide knowledge of procurement, planning, sourcing, and transportation management functions?
This is a tough one sometimes, but sometimes we need to look ourselves in the mirror. Based on your organization’s expertise and resources, determine your team’s skill set when it comes to the supply chain. This will help your company decide if outsourcing or bringing in an in-house solution is the best option to scale business growth.

If the answer is to outsource, consider a 3PL or managed services to operate the transportation department. Typically, 3PLs specialize in a portion of transportation and/or warehousing services that can be customized based on your company’s goals while managed services provide a full end-to-end solution for the entire transportation function.

If the answer is to manage internally, your organization might be ready to leverage a TMS. From traditional hosted models to innovative SaaS-based platforms, a TMS helps your company better manage transportation and provides a tool to help deliver on supply chain objectives.

In order to best make the decision on what the best plan is for your supply chain, your organization needs to take a critical look at how it views the supply chain and how it supports those views with  current process. Take a 360 degree look at your supply chain and then determine what value-added services and solutions are the best fit for your organization.