Welcome back to another installment of Whitepaper Wednesday here on the Purchasing Certification Blog. Today, I’ll be reviewing a whitepaper entitled “Identifying Opportunities With Your Inbound Transportation” from C. H. Robinson Worldwide Inc. and Purchasing Magazine.
I admit to being attracted to the topic of this whitepaper because assessing cost savings opportunities for inbound freight was a goal when I was first hired by the University of Pittsburgh but quickly was replaced by more aggressive goals. Still, I always wondered what degree of cost savings we would have achieved had this remained on our radar.
Certainly any organization that allows suppliers to control inbound freight costs is leaving money on the table because, as the whitepaper points out, “when you add inbound lanes to outbound, you increase freight volumes, making your business more attractive to carriers at potentially lower rates” and “to hedge for unknown costs, suppliers often factor in a margin of error in your delivered price for inbound product.” Heck, even if your suppliers are simply billing you for what they paid the carrier, there really isn’t an incentive for the suppliers to ensure the cost-effectiveness of the shipping decisions.
Despite the fact that these types of opportunities are blatantly ignored by many procurement departments, those are basic ideas. But the whitepaper begins to explore more advanced logistics topics such as optimizing shipments. For example, the whitepaper says “Individual orders can be optimized and grouped together across facilities to create multi-pick, single drop shipments. LTL loads from multiple suppliers can be consolidated into a single truckload to reduce costs and dock congestion.”
The whitepaper offers some tips for getting started, although they seem to be intentionally too vague in order for you to want to hire the firm that authored this whitepaper. Nonetheless, if you were in the position that I was in (albeit briefly), where you have to begin investigating getting inbound freight costs under control, the whitepaper is at least worth looking at. You can download your own copy for free from Purchasing Magazine’s Web site (registration required).
To Your Career,
Charles Dominick, SPSM
President & Chief Procurement Officer
Next Level Purchasing, Inc.
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