Supply Chain Supplier Collaboration – a Shipper’s Move to Transportation Savings

Supply chain profiles find themselves reliant on a myriad of suppliers. Some days it’s overwhelming, others are blessings. Often the difference is the level of collaboration with the people of these outside organizations, and the benefits of their offerings when fully engaged.

PricewaterhouseCoopers’ January, 2013 report 10Minutes on supply chain flexibility, relays feedback of 150 supply chain executives surveyed, with a reoccurring emphasis point being shipper-supplier collaboration, and rationale for its vitality in their organization.

For statistics, the report’s survey recorded 74% of respondents as ‘leaders’ in Collaborative Planning with suppliers, with 43% as ‘laggards’ in this endeavor (Their words and percentages – laggard’s connotation seems a status no one would wish to assign themselves; the percentages factor responses in scaled increments). Even more telling, 79% were assigned as leaders, with an alerting 53% identified laggards in Supplier Collaboration.

Qualifying these numbers, the report states:  

“Collaboration is a zero-sum game. Ultimately, supply chain visibility and collaboration boil down to balancing the level of trust between partners with the information sharing required to work together on the priorities of the extended supply chain. Without the right focus and without that trust factor, even the best governance agreements and tools won’t yield the desired results.

“The better the information companies have at hand, the more responsive their supply chains can be. But information from the supply chain may be slow to reach managers, and suppliers may complicate matters by using different software programs and data formats.

“Increasingly, companies use cloud-based platforms to share information in real-time.”

This highlights an area of information collaboration central to supply chain cost containment: the ability to optimize product transportation with carriers, utilizing both company and industry benchmark data to maximize savings in this costly component of manufacturing, distributing, retailing and etailing businesses.

An area prime for enhanced collaboration: a Shipper-Industry Benchmarking Program, a monitored consultative review of a company’s freight shipping costs, comparing findings with industry benchmarks provided by an independent entity with knowledge of carrier operations, route, pricing and billing practices, to determine areas for cost reduction in conjunction with the savings scale probable to achieve through carrier and service level optimization. This information review is suitable for companies managing shipping payment in-house, through a 3PL and/or utilizing a freight bill payment service.

The key is to reduce supply chain costs associated with product transportation through discovery; at the core a business intelligence portal providing for data mining of a shipper’s current information addressing their logistical needs in relation to marketplace options, enabling them to make optimized time and cost-effective decisions, domestically and globally. Implementation of discovery’s results includes support functions relating to pooled purchasing, RFP management, carrier negotiations, transportation management system software utilization, inbound routing and network analysis, along with informed freight bill auditing and payment services to maximize accuracy and savings at this key financial stage of supply chain operations.

For organizations who seek to maximize billing-payment accuracy, an effective way to optimize an organization’s transportation information by utilizing the company’s historical data and industry benchmarks, is to form a collaboration alliance with an independent cloud-based business intelligence provider, one with benchmarking ability in the company’s established software program/file format for dissemination and collaboration ease, with the ability of thorough follow-through of pre- and post-payment auditing and payment services to realize ongoing cost savings.

– Tim Nissen, Data2Logistics http://www.data2logistics.com/ + http://twitter.com/Data2Logistics