Solutions should not be more complicated than the problems they are trying to solve!

Inbound Transportation Management and Control: Low Hanging Fruit and How to Grab It

In most organizations, the cost of transportation is equal to or greater than the combined costs of warehousing, order entry and customer service.  In addition to its recognition as an enormous expense, freight transportation is the “corporate life bloodline to the marketplace”  and has been a precursor to the shrinking or "flattening" of the world.

As the supply chain becomes more refined and integrated, its management has an even greater impact on the bottom line. Every dollar allocated to transportation and materials management must be ultra efficient.   When it comes to managing your transportation program, the overriding theme must be control yet,  many organizations have not applied the same efforts to inbound transportation management as they have to outbound management, making it a great opportunity for efficiency and cost savings.

This white paper will identify and discuss the most important, perhaps simplest of steps necessary to improve Inbound Transportation Management as well as the opportunities that this improvement will yield.

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The Sarbanes-Oxley Act And The Freight Transportation Implication

Contrived success, fueled by financial fraud was the soup from which the Sarbanes-Oxley Act of 2002 (SOX) sprung forth.  Perhaps driven by a new business model or old fashioned greed or Wall Streets demands for short term profits at any cost, manipulated financial information satisfied all bases.  The corporate wreckage and financial devastation of real people, young and old, rich and poor that were left in the wake of the schemes looked like a highway strewn with the destroyed promises of tomorrow

 

Effective, efficient, and timely implementation of the immediate requirements of the Sarbanes-Oxley Act are facing delays allegedly caused by high costs. Timely implementation is important in order to properly address both the spirit and terms of the Act and to overcome the current delays and associated obstacles alternative methods of approach need to be identified.

 

This white paper will briefly describe the Sarbanes-Oxley Act of 2002; and discuss freight transportations unique ancillary capabilities as a timely, cost efficient and effective resource for exposing and reducing the potential financial abuses understood by SOX as well as meeting its compliance objectives.

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Transporting Information at the Speed of Commerce

Communication is the quintessential means of conveying ideas and information.  Transportation is the quintessential means for moving goods.  These simple facts have long been key contributors for the growth and development of commerce and industry. 

 

This whitepaper will identify and discuss: critically important, automated, and incremental freight transportation solutions that manage the logistics functions within the supply chain; and how their converged process and function can simultaneously deliver the collateral information to the entire trading partnership at the speed of commerce. 

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Idea Logistics, Evoking Corporate Intellectual Assets

Transportation’s resources have been focused on moving people and goods.  In this role and throughout time, its faculties, resources, and attributes have continuously driven the world’s economies and moved people all around the globe.  During the intervening years of growth, transportation’s capabilities and processes have repeatedly increased and developed, but remained focused primarily on the movement of people and goods.  Today, transportation is successfully meeting the challenges of the global economy and its capabilities and resources are still being principally directed at moving people and goods.                                                                        more

Building an Integrated Supply Chain

Ever since the supply chain was envisioned, there has been a focus on integration to improve customer service at a lower cost.  This paper discusses reasons why this is not as easy as it sounds and outlines some interesting observations.     more

ABC Product Costing

Many companies see the benefit of categorizing their products (or SKUs – Stock Keeping Units) into ABC groups.  For example, sales and marketing see the A’s as being the fast movers, and the C’s as slow movers.  However, how you measure fast and slow movers is often inconsistent.  Are the A’s the top Pareto (the 20% of the SKUs having 80% of the sales)?  Also are fast and slow determined by dollar sales, or by units sold, or by some other measure?  Warehouses have other measures of ABC SKU classifications based on order-lines or cube shipped.  Such classifications are important considerations in defining warehouse layouts and picking methodology.  A future TransportGistics white paper will address this issue.  An ABC categorization that interests accountants and financial controllers is the sales cost of individual lines, and hence the contribution that they make to the bottom line.  This white paper addresses this issue which we call ABC product costing.     more

The Freight Transportation Value Proposition

If an excellent product, at a competitive price; timely and accurate information; and superior customer service are the essential elements for success, why have only but a very few astute companies availed themselves of the business discipline most capable of achieving these objectives?  Identifying those business disciplines that could best influence corporate success and performance may not even include transportation in the first, second or even third pass, and if transportation were finally identified, it would probably be recognized for only one of its many dimensions.

 

Unlocking the enormous potential of transportation’s vast resources is a critical success factor and an achievable goal! 

This white paper will consider the “freight transportation value proposition” as a means to achieve corporate recognition of the importance of freight and freight transportation.  It will also demonstrate transportation’s ability as an enabler to evoke a company’s potential; and its value as a key contributor to corporate profits, performance, and success.             more

The Insourcing Paradigm,
Achieving Optimal Transportation Management Performance

“Insourcing” offers commerce and industry a highly focused, portable intelligence. As an expert management tool, insourcing delivers functional solutions over the Internet. A developing aspect of insourcing is taking on the form of human resources; in this form, insourcing may be described as “imbedding” specialists at client locations where they perform specific tasks. Viewed as an entirety, insourcing is comprised of two components, primarily tools and then services as an evolving capability.

With e-commerce moving faster and faster; the supply chain was being forced to reach commensurate speeds. The velocity of the supply chain is influenced by two primary factors: transportation and production. The combination of these events, together with their ensuing operational adaptations, gave rise to “The law of commerce and logistics” that is, “Increasing the speed of electronic commerce results in the consequential demand to accelerate the supply chain”   more

“Freight transportation negotiations” is a multidimensional subject with broad meaning and is focus driven by our corporate requirements, individual experiences, and perspectives.  TransportGistics’ white paper, “Knowledge Based Freight Transportation Negotiations” addressed the difference between, “cost and service driven negotiations” on the one hand and on the other, “freight transportation negotiations”.  The experiences of that paper’s co-author, Jeff Nielsen, Director of Global Logistics & Compliance at MPC Computers, demonstrated the need to achieve that elusive “balance” between shipper and carrier.  Attention was also given to the importance of attaining “mutual advantage” through negotiations.  That white paper also examined some of the negotiations issues, service needs, practices, and processes of MPC Computers. more

Freight transportation represents a large corporate expense, “right up there with people and material”, says Mr. Minyon. In fact, in most organizations, the cost of transportation is equal to or greater then the combined costs of warehousing, order entry and customer service.  In addition to its recognition as an enormous expense, freight transportation is the “corporate life bloodline to the marketplace”.  Its role in customer satisfaction is crucial; the carrier is the shippers’ representative at the customers’ doors. 

 

The influence of “routing management and control” as the “corporate life bloodline to the marketplace” establishes it as a universal key element.  more

Purchasing Freight Transportation in a Corporate Centric Currency

Purchasing freight transportation services in a currency, a unit of measure that is both used and understood by finance and accounting uniquely offers the entire corporate team an important, comprehensive view of its industrial and commercial complex.  Viewing the corporate infrastructure and its operations from this perspective will provide management with new insights and expose areas of opportunity. more

The Dimensions And Dynamics Of Connective Technology

The purpose for this white paper is to provide a basis and reason for the “transportation and logistics applications technology revolution”, and to demonstrate that “connective technology” is the key facilitator for: future development; growth; and sustainability; as well as presenting thoughts and ideas of relevant, forward thinking applications.  more

Negotiating freight costs / services has many meanings.  For some shippers it simply means that whatever is being charged must be reduced. This attitude telegraphs the posture of the negotiations and eliminates the potential of “knowledge based transportation negotiations”.  Likewise, some carriers, perhaps better described as spoilers, chase down their competitors’ customers and offer freight rates and charges that are lower than the current level.  These approaches are not necessarily “bad”; but they are incomplete!   more

World Class Freight Transportation Purchasing Excellence

Transportation and technology continue to influence the global economy and its supply chain.  Both have significantly increased the speed of commerce and the flow of associated information. 

 

While speed has proven to be an important advantage, supply chain performance is also dependent upon the knowledge and experience of the transportation and purchasing professionals.  more

Identifying, Understanding & Using Cost Accounting To Create New Transportation Perspective and Actionable  Opportunities

For the most part, the industrial world has perfected the science of cost accounting.  Assigning a cost to, at least every description in the general ledger, creates a new perspective and offers new dimensions and dynamics for the micrologistics component, transportation. These dimensions and dynamics will provide fresh insights and actionable opportunities. more

Convergence: The Combined Power of Micrologistics and Wireless Technology

Logistics, Transportation and Distribution are mission critical business disciplines whose capabilities have, for too long, gone unnoticed and therefore underutilized! Missed opportunities have their roots in underutilization; and professionals in logistics, transportation and distribution, up until recently have long been frustrated by this fact.  Their corporate centric position and awareness of and sensitivity to the corporate knowledgebase, position these professionals adjacent to one of the largest “pools of potential opportunity”.  more

The Freight Audit Function and Utility.  Driving Corporate Performance.

Freight expense represents a significant portion of the overall corporate budget.  Because of its size and relative position, freight expense plays a major role in corporate profitability.  Freight expense for the average company is large enough to warrant attention and intelligent management.  Freight Cash Asset Management is a valuable treasury tool that can convert the freight expense to an asset.  In order to properly control the expense and maximize its potential opportunities, it must be understood and controlled.  more

Selecting a Freight Audit Vendor

A brief note on the selection of the title of this paper -   Given that titles should be terse and recognizably descriptive of the subject matter, no alternative existed but to select the given title, unfortunately we feel it is not sufficiently descriptive.  We could have used the title, Freight Payment Vendor, while also recognizable; it is probably as incomplete as the first.  Combining the two, Freight Audit and Payment Vendor would also be inadequate, and not as accurate.  The most appropriate title, “Freight Bill Management, Shipment Information and Cost Control Portal” is absolutely descriptive and should become universally recognizable and acceptable.   more

Freight transportation in the United States under went an important change on January 1, 1995.  Practices and procedures associated with freight transportation, except for safety, would now operate in an open or market driven environment because the Interstate Commerce Commission (ICC) and the respective state regulatory agencies (DOT’s) were terminated.  Notwithstanding the fact that the rules and regulations of the past were eliminated, the operating environment, mindset and fundamental principles remain as the viable structure and frame of reference for freight transportation.  The areas of greatest change occurred with the significant increase in the number of carriers and the “blurring” of the former distinctions.  more

The Role of the Logistics Leader in Driving Supply Chain Value Co-Authored by Frito-Lay

The Logistics Leader compares equally with all others who have been assigned this title. Additionally, it could be

 agreed that those unique characteristics that make up an effective leader are no different for a logistics leader when compared with others.  more

Proper freight costs can mean the difference between profit and loss.  Freight transportation costs account for a significant portion of the overall corporate budget and must be purchased effectively, controlled and monitored. more

Freight transportation in the United States not only represents a significant corporate expense, it is the “life bloodline to the marketplace” (sm).  While the size of the expense could be argued, it is indisputable that without freight transportation, there would be no industry and probably no commerce of any kind! more

Logistics, The Beginning of the New Potential

Too often, business is viewed from the “oversight or high level”, consequently not enough attention is given to the critical operating components necessary for growth and ongoing performance. more

Harvesting the Benefits of Correct Terms Usage

Applying the correct legal terms associated with the movement of freight is one of the most important events in the entire purchase and sales process! They establish the relationship between the parties and every related event thereafter will rely on these terms to satisfy the relationship. more

Ten Tips for Creating a Routing Guide

Today, the routing guide is King and defines the rules of engagement between vendors and customers. Now, as logistics processes have come under more scrutiny, the routing guide must be more detailed, providing a solution for every shipping situation.  Yet, it also must be easy to read, simple to use and flexible.  Your vendors and customers will be more apt to comply with a guide if nothing is left to their imagination and the carrier’s, cost savings and route parameters are clearly spelled out.  Here, Alan Miller, from RoutingGuides.com gives ten solid tips on creating a routing guide.  more

Deciphering Incoterms

The economy and trade of the 21^st century truly consists of one global market.  While Buyers and Sellers very often find themselves on different continents in different parts of the globe, they can rest assured that they have a uniform and standardized set of trading International Commercial Terms (“Incoterms”) to help them navigate through international transactions and also elucidate each Buyer and Seller’s role in the supply chain.  more

Micrologistics and Macrologistics - The Dichotomy of Logistics

This white paper continues to address the notion that logistics is comprised of two primary components:  Macrologistics and Micrologistics; and that logistics is best represented, visually, as a set of gears driving the process (micrologistics); surrounded by macrologistics, which manages the process.   more

Logistics is not a Chain

This paper will challenge the supposition that “logistics” is a chain, and further reject the notion that it is comprised of two distinct sides, supply and demand.  The chain portrays logistics to be stagnant and linear; it also suggests that supply and demand are two separate chains.  This view causes rigidity of thought and creates a contrary set of theoretical business rules, forcing those involved to think within those limitations.  more

Managing the costs of moving goods through the supply chain is a huge challenge for shippers and consignees.  A single shipment involves inter-company and intra-company transactions and communications. In the life cycle of every transaction, data is required by a variety of people including vendors, customers, carriers, customer service, accounting, purchasing, product coordination, inventory management, warehouse management, and fulfillment.  more

Collaboration

Collaboration is being discussed in almost every business publication today! Many companies are discussing the topic internally and some have had in-depth discussions amongst their preferred or necessary business partners.  While there are protocols, and transaction sets, the ability to articulate a universal compelling reason that would effectively create the collaborative industrial and commercial culture is severely lacking.  more

International Freight Terms and Corresponding Issues

In order to best understand a subject and to effectively articulate and communicate ideas, thoughts and issues, it is imperative that we share definitions.  In this connection, the international transportation and foreign trade interests cried out for such standards; the result of the process is Incoterms.

The first published set of terms was complied by the International Chamber of Commerce (ICC-not to be confused with the now defunct Interstate Commerce Commission) in 1936 and has been updated and continues to reflect current practices. more

Terms Surrounding the Transportation Processes That Have Significant Impact on How Business is Conducted and Where Responsibility is Assigned.

Freight terms, terms of sale/purchase, freight prepaid and collect and FOB are terms that are continually being misused and misunderstood.  In many instances the necessary and appropriate terms to establish a position are left un-stated on the belief that a stated term takes the place of one that is silent.  Where silence does speak, we are left to the mercy of interpretation.  more

In an effort to maximize profitability, TransportGistics, a transportation management application service provider, has been working with retailers and suppliers to control the negative costs of reverse logistics.  more

Over, Short and Damage Claims or Loss and Damage Claims

Freight claims occur for various reasons, some are real, some are contrived, some can be prevented, but they all can be controlled, understood and kept to acceptable, understandable and reconcilable levels.  Accepting loss and damage claims (L&D claims) as a cost and part of doing business, demands that we must be very careful when establishing standards; because the established standards will become the metrics by which we measure this aspect of carrier performance, packaging, consignee receipt of freight and the ability of the freight to withstand the normal hazards of transportation. more

Transportation and Distribution Management–Automating the Process

As we begin to consider automation, more often than not, we tend to focus on goals and objectives rather than identifying, understanding and respecting all of the activities associated with the operation and jobs that we are attempting to automate. more

Using Today's Practices to Manage Transportation and Distribution

Y2K was touted as the thing that would shake the underpinnings of the world if appropriate attention, time and talent were not dispatched.  Budgets were established, consultants were hired, staffs were increased and of course the programming queue was extended. more

Motor Carrier Selection and Effective Control

For many companies cheap transportation is important; for the well managed companies, the correct transportation is more important; it needs to be inexpensive yet consistent with the desired levels of service. more

Additional Resources

TransportGistics Announces Free Bill of Lading Generator with paid subscription to RoutingGuides.com*

Ingram Micro Implements RoutingGuides.com To Improve Inbound Routing And Vendor Compliance

Margaret R Pardee Memorial Hospital Implements TRaIDS.net