Portrait of Best-in-Class Transportation Management

Sept. 12, 2008
For your customers, Rule Number One is: Get it there on time.

When it comes to transportation management, a manufacturer's customers basically care about one thing, and one thing only: Get the products delivered on time. According to analyst firm Aberdeen Group, best-in-class manufacturers have an on-time delivery performance of 96.6% or better; laggards, on the other hand, are far behind at 83%. What's more, laggards are paying exorbitant amounts of money to achieve that lackluster performance, as 27.3% of all shipments are expedited. Best-in-class companies, however, use expedited services only 2.9% of the time.

Technologically speaking, best-in-class manufacturers have moved beyond their transportation management solution (TMS) implementations and are now leveraging the data and process automation and management capabilities, according to Aberdeen. They're focusing now on extending their collaboration lines while providing greater insight to their key supply chain partners.

"The focus on collaboration and visibility across internal and external departments has clearly provided the Best-in-Class transportation companies with the flexibility and agility necessary to overcome the rising costs in fuel and other shipping costs," says Brad Wyland, senior research analyst with Aberdeen. "The automation of processes and visibility has enabled transportation managers to better plan for and adjust their shipping decisions on a daily basis, helping them find the most cost-effective options for them and their customers."

The accompanying PACE (pressures, actions, capabilities and enablers) chart illustrates how manufacturers can progress from identifying a problem to focusing on a solution, and as a result become best-in-class themselves.

Pressures

  • Increasing freight rates and/or accessorial charges (e.g., fuel)

Actions

  • Provide greater internal visibility to freight status and cost
  • Reduce outbound freight costs
  • Collaborate with carriers/suppliers/customers to create more economical transportation process

Capabilities

  • Connectivity with external parties for visibility into shipments and orders
  • Process alignment with other departments (e.g., customer service) to create efficiencies
  • Collaborate with external parties to create more economical transportation processes
  • Providing accurate online information to other departments (e.g., shipment status, costs)

Enablers

  • On-premises transportation management software
  • EDI communication with carriers and suppliers
  • Web portal communication with carriers and suppliers
  • Supply chain visibility software

Source: Aberdeen Group

See Also

About the Author

Dave Blanchard | Senior Director of Content

Focus: Supply Chain

Call: (941) 208-4370

Follow on Twitter @SupplyChainDave

During his career Dave Blanchard has led the editorial management of many of Endeavor Business Media's best-known brands, including IndustryWeekEHS Today, Material Handling & LogisticsLogistics Today, Supply Chain Technology News, and Business Finance. He also serves as senior content director of the annual Safety Leadership Conference. With over 30 years of B2B media experience, Dave literally wrote the book on supply chain management, Supply Chain Management Best Practices (John Wiley & Sons, 2010), which has been translated into several languages and is currently in its second edition. He is a frequent speaker and moderator at major trade shows and conferences, and has won numerous awards for writing and editing. He is a voting member of the jury of the Logistics Hall of Fame, and is a graduate of Northern Illinois University.

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