The following is an excerpt from “Best Practices in Transportation Management,” a white paper from Atlanta-based supply chain services provider Manhattan Associates based on research from Boston-based AberdeenGroup.
Supply chain and transportation executives are under newly intensified pressure to keep transportation costs down in the face of rate increases and to keep service levels up in the face of capacity constraints.
The following is a best-practices checklist to consider for the corporate transportation roadmap.
• Centralize transportation network design to identify the lanes, pool points, drop yards, dedicated fleet sizes, and other distribution elements that can be leveraged across the company. More-advanced companies can look to create cost- or profit-optimized master transportation plans, considering service levels, freight and inventory costs, capacity, target inventory levels, and so on. These master plans may set delivery modes, frequency, quantity, and sequence. Highly skilled central planners can create transportation designs that local groups never would have the time (or often, the exper¬tise) to analyze.
• Centralize transportation procurement to aggregate shipment volume across the enterprise for both domestic and interna¬tional freight contracts. Centralized procurement drives volume discounts from carriers and creates request for proposal (RFP) and carrier selection consistency. Consistency also benefits the carriers, since they no longer have multiple RFP formats and company contacts through which to navigate.
• Centralize transportation planning across the company to increase shipment aggregation, backhauls, continuous moves, pooling, zone skipping, and other cost-lowering consolidation methods. Best-practice leaders often gradually centralize more and more of the transportation-planning process across divisions, including outbound, intra-company, and inbound moves across for-hire and dedicated fleets. Best-practice leaders also often move transportation planning closer to the point of order-taking so that it is no longer an end-of-the-line function—this increases the window for consolidating ship¬ments.
• Centralize transportation execution to create a consistent, efficient way to tender shipments to and communicate with carriers.
• Centralize transportation monitoring and analytics so that a single enterprise system contains plans, costs, and status information for all shipments, as well as past history for comprehensive analytics.
• Centralize freight settlement to create payment dependability and consistency for carriers and set the stage for efficient self-invoicing.