TRANSPORTATION SPEND MANAGEMENT – STRATEGY or TACTIC?
by Mike Starling
TRANSPORTATION SPEND MANAGEMENT – STRATEGY or TACTIC? Depends on what you are trying to achieve.
Done in isolation = just a TACTIC to try to reduce current freight expense.
Done to achieve multiple purposes = it's a STRATEGY to enhance your transportation network and support company goals and objectives. (And, yes, it will help reduce freight expense while maintaining or improving current service performance levels as well!)
Seems like these days there are a multitude of Transportation Consultants beating on clients' doors and hounding clients via cold phone calls and barraging shippers with unsolicited e-mail and other literature touting their ability to save you a bunch of bucks.
Now, there is nothing wrong with looking to cut freight expense, improve your transportation network service capability, and upgrade your carrier portfolio, so long as you maintain required service levels. But it’s not unlike shopping for a used car. How?
Lets see, Transportation Consultant vs. Used Car Purchaser:
1. The intended purpose/use will dictate what you buy/invest in.
2. It takes time and commitment on your part to make it happen.
3. The more education and experience you have, the better the outcome.
4. You have to look under the hood to understand what you are buying.
5. Kick the tires, and take it for a test drive before making a final decision.
If you are just looking for a quick-hit, one-off way to save a bundle of money on your (fill in the blank with mode type), then you might luck out using any garden-variety Transportation Spend Management Consultant out there on the market today.
However, BUYER BEWARE!! Most are ex-UPS or FEDEX sales or finance types with little or no experience in other modes of transportation. Or, you’ll find the Freight Invoice Audit and Payment gurus looking to expand their core business by taking a whack at running a carrier competitive bid on your behalf—but their real goal is to capture the expanded freight invoice audit and payment business on the back end. A rare few have broad transportation modal and management experience sitting on “your” side of the desk, dealing with the reality of executing to plan, staying within budget, and maintaining a designated level of service performance to both internal and external customers.
So, if your freight expense/cost reduction project scope is limited, and you are only interested in getting help to cut freight expense, wouldn’t it make more sense to find a resource that:
1. Has experience in transportation management sitting on your side of the desk
2. Has broad transportation modal experience across the industry spectrum
3. Has depth of understanding and experience in dealing with carriers in conducting competitive bids to achieve cost savings and other concessions on behalf of their clients
4. Has the ability to perform as both Consultant and Coach, helping you to be smarter at the end of the project than when you started
5. Has the ability to take the results of your project and visualize how it aligns with the other activities in your transportation network
6. Has the flexibility to work with you to develop an estimated ROI based on a mutually agreed-upon scope of work (SOW), rather than quoting you a standard price for such services with no guarantees of help with implementation and assimilation.
So, if it’s flexibility in both service and pricing you are looking for, combined with broad understanding of transportation, both domestic and international, I would call your attention to the About tab at the top of the page.
You might just find what you are looking for.
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