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How to Manage Global Transportation Spend with a System that Increases Agility, Control, and Ability to Measure Performance

Reduce Freight Spend

A STRATEGIC IMPERATIVE FOR RETAILERS

Today, it’s diffi cult to decide on the best allocation of freight funds. It’s also a challenge to manage data from each partner once they have been chosen. With so many carriers and logistics providers involved in a global supply chain, retail-ers struggle to form a single, high-defi nition view of rates and other transportation data. They must attempt to gather information from each partner’s proprietary system or ERP software.

Traditional transportation management systems are not up to the task of managing freight spend in global supply chains. They come with a high cost of ownership and long implemen-tation times, with persistent visibility gaps along the way. In an increasingly complex global trade environment, retailers are having trouble lowering transportation costs while still provid-ing quality service.

Impact of Poor Freight ManagementWithout a system to bring transportation spending and management to a single control layer, retailers have limited ability to make sure the money they spend is going to the right carriers and partners. They also have little insight into how contracted rates and estimated costs compare to the real thing. They experience:

High costs due to expedited air freight

Money wasted due to limited agility

Poor ability to rate carriers and measure compliance

Inability to measure KPIs — actual vs. plan

The Root of the ProblemTransportation providers charge varied rates in varied sce-narios, managing their operations on proprietary systems. This, coupled with the need for many modes of transportation in regions worldwide, makes it hard for retailers to optimize their spending.

1. Rapidly changing global transportation market

Today, a major challenge in managing freight spend is deal-ing with changes in the market. When capacities, fuel costs, and new processes quickly shift, costs must be allocated to refl ect new carrier abilities. These rapid changes cause:

Increasing number of small shipments with tight delivery timelines

Disparity between processes of different carriers; some manual processes, some in-house software, some ERP

2. Growing number of carriers and service providers in a single supply chain

As supply chains grow, so does the number of parties involved in shipping a product from one place to another. Each participant has its own way of operating, and each stores data in its own system. This causes:

Higher chance of miscommunication

Greater landed cost accrual

More data needed to compare rates and choose the best allocation

© GT Nexus, Inc.

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Retailers must keep transportation costs as low as possible without sacrifi cing service levels.

The Challenge

With a complex transportation plan, retailers need a way to see data from all of the parties involved.

Plant

Plant

NetworkConnectivity

Agility

CustomersCustomers

Customer

DC / Warehouse

Plan

Actual At-Risk DelayDynamic ETA

DC / Warehouse

B

A

Sense more accurately

Operate more efficiently

Respond faster

Make better decisions

Plant

Plant

NetworkConnectivity

Agility

Customers

Customer

DC / Warehouse

Plan

Actual At-Risk DelayDynamic ETA

B

A

Sense more accurately

Operate more efficiently

Respond faster

Make better decisions

3

The SolutionRetailers can reduce freight spend by adopting a system that provides both a platform and functional modules to gain agility, control, and the ability to measure performance. This solution provides a control layer that connects to all of the separate TMS systems a retailer might be using with their logistics providers, bringing the isolated data into a single system. They can use this data to compare rates and monitor performance, adjusting freight spend accordingly and lowering costs.

Deploy a global transportation management system that brings all data to a central location.

Integrated transportation sourcing, planning, execution and FP&A

Control layer that includes native capabilities of sourcing, rating, planning, tendering and freight payment and audit

Rapid implementation and fl exible confi guration

Series of performance analytics to measure compliance to plan

How to use it to reduce freight spend:

1. Reduce freight costs through improved sourcing and execu-tion process

2. Identify “at risk” orders and minimize modal/service shifts

3. Use milestones to measure performance on specifi ed busi-ness rules

4. Run unlimited what-if scenarios to optimize spend

Value PropositionsBy handling transportation in the cloud, retailers can manage freight rates and spend on a single platform. Benefi ts include:

1. Reduce transportation costs

Lower rates through improved sourcing

Reduce cost with optimal mode and carrier selection

Eliminate overpayment via pre-audit of freight bills

2. Set consistent processes for all partners

Eliminate inconsistencies by 3PLs

Measure and report across all providers

3. Gain deployment fl exibility

Roll out functionality as desired, by business unit or region or both

4. Collaborate for more effective planning

Prioritize or postpone shipments based on demand

Use multi-vendor/multi-port consolidation

Increase equipment use

Reduced Freight Spend and the Networked CompanyTo reduce and optimize freight spend, companies must transform themselves from silo-based, inward-facing corporate operators to interconnected, highly agile business network orchestrators.

When information on rates and service is isolated into separate silos, there’s no clear picture of where the money is going.

In the cloud, all transportation data is brought to a single control layer.

Enterprise DemandSupply

TMS-3 TMS-4 TMS-1 TMS-2 TMS-5

Extended Enterprise Visibility and Control Infrastructure

TMS Control Layer