10 Strategies to Drive Down Your Transportation Spend
Add comment February 19th, 2008 David Bush - Iasta
Industry Week is on a roll as of late. In addition to their recent article on Best Practices in Freight Bidding, that Michael Lamoureux summarized in this post, they just published on article on 10 Strategies to Drive Down Your Transportation Spend that was rather good. In brief, the strategies were:
- Keep your network flexible to take advantage of cheaper and more economical freight lanes.
- Set budgets and measure spend against budget on a regular basis.
- Negotiate constraints for price, capacity, and capability over the long term.
- Implement postponement strategies that allow you to reduce lead time and improve cash flow.
- Monitor and enforce inbound compliance.
- Optimize your transportation planning.
- Consolidate all outbound shipments. If you pay for the truck, use it to its full capacity.
- Improve supply chain visibility. Know where your shipments are when, and why.
- Monitor and audit all invoices and shipments. Only pay what you have agreed to under contract.
- View transportation and trade as one integrated process.
Finally, and I can not stress this enough, use strategic sourcing decision optimization when making your award decision to insure that the award you select will enable you to keep your transportation costs down. Otherwise, you might think you save big on the unit cost only to find out that your transportation costs double.
Entry Filed under: General, Optimization, Supply Management Best Practices
