Unlock Savings Hidden in Your Supply Chain

How to unlock savings hidden in your supply chain

Chris Timmer, Chief Commercial Officer

Your supply chain is hiding something from you. It keeps it tucked away in dark corners protected by a lock. Can you guess what it is? That’s right, it’s money saving opportunities. Opportunities that can, in some cases, easily add up to millions of dollars depending on the size of your operation.

You have the key, but the challenge is figuring out where to look for the lock. A transportation management system can help shine the light on the darkness and reveal new possibilities. LeanTMS offers a process called actionable intelligence which helps dissect big data and turn it into valuable information so you can make better business decisions.

What is Actionable Intelligence?

Actionable intelligence is a continuous process that challenges supply chain leaders to consider cost savings in new areas. You can use this data to analyze performance against both organizational goals and industry norms. There are four stages in this iterative process: data, analytics, decision, and execution.

  1. ai-modelDATA – The cycle starts with the data collected in the TMS. The depth of this data depends on the type and size of the network. A SaaS based, single instance, multi-tenant network allows for an exhaust of transportation data to be shared with all users.
  2. ANALYTICS – The second step involves analyzing the data which includes information on a company’s transportation moves as well as information on all other users of the network. The byproduct of this network model is real-time industry benchmark information to draw comparisons against key performance indicators.
  3. DECISION– Next, it’s time to start making some decisions based on the information you have uncovered in the analytics. These decisions can be tactical or strategic. Because actionable intelligence is a constant cycle, you can solve one problem and then start the process again.
  4. EXECUTION – The last turn in the cycle is execution. Execution will typically involve several levers, including targeted procurement, mode conversion, and various forms of optimization. It might also consist of implementing new production and sourcing schedules to minimize supply chain costs.

Actionable Intelligence in Action

One of our customers, a company in the food product industry, has benefited from actionable intelligence for several years now. The company needed better centralized control of transportation to eliminate the number of third party vendors it used. Its goal was to bring transportation planning, execution, and settlement in house and to build better business processes. With so much control given to third parties, it was challenging to know where to find the savings.

Unlocking Door #1 – Order and Load Sizes

Actionable intelligence showed that order and load sizes were not being enforced properly wasting valuable space on the truck. Sales and customer service increased order sizes and weight for dry volume moves. For frozen movements, they based the restrictions by cube amount instead of weight. These two changes alone reduced the number of trucks required by 5%.

Unlocking Door #2 – Accessorial Charges

The company unlocked more savings when zeroing in on its accessorial process. Actionable intelligence found inconsistency in both format and application for the company’s accessorial charge history resulting in overpayments. The company recovered overcharges from numerous carriers and established review standards moving forward.

Unlocking Door #3 – Routing Guides and DC Modeling

An evaluation of the routing guides and distribution center modeling also resulted in cost savings. It was more efficient to ship directly from their plants to customer distribution centers, rather than moving it through an interim distribution center. They also formed a win-win partnership with carriers and received lower rates in exchange for reducing the payment cycle time from 30 days to 5 days.

After three years of working the actionable intelligence cycle, the company reduced its freight bill by 19% and their delivered cost-per-case by 17%. And the savings doesn’t stop there, the company will continue to deploy actionable intelligence to super sleuth their way through those dark corners and find what’s hidden inside.

Handing our customer the flashlight–that’s just one more way we are building better supply chains together.

 

Posted in Blog
Tagged actionable intelligence, cost savings, data, LeanLogistics, LeanTMS, Logistics, Supply Chain, Technology, Transportation, transportation management system, visibility

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