According to a study of 380 companies made by the Aberdeen Group, desktop shipping, also known as “non-production” shipping, is the biggest source of what they term “maverick spend” associated with a company’s transportation activities. (Source: “Winning Strategies For Transportation Procurement and Payment” Aberdeen Group, February, 2007)
“Maverick Spend,” as the name implies, refers to the spending for goods or services that is not being managed or controlled, and that is exactly what is going on with non-production shipping. The same Aberdeen study found that 63% of the companies surveyed had their parcel carriers under local management. And that was for all parcel, including production shipping. Had they restricted their study to non-production shipping, the rate would have been closer to 100%.
Not having centralized control of non-production parcel shipping can hurt a company in three ways:
- Lack of leverage: Carriers serving a mail room or local office will not give the same rates as they will for the company’s much larger production volumes.
- Lack of process: Since there is no control over who does the shipping or the level of priority that it is given, people simply do what they are used to doing.
- Wasted time: Handwritten waybills take time to fill out, particularly when it is not something that is done on a day-to-day basis.
Lack of Leverage
With every remote location in the company having their own relationship with a favored carrier, there is no opportunity to negotiate for volume discounts. When you factor in the effect of tying the non-production volume to existing production shipments, this opportunity becomes huge. As a result of an internal study, one high-tech firm found that they had 73 different contracts in place with parcel carriers serving their production and sales offices around the world, and over half of those were just in the US. They felt that by managing that down to the three or four carriers that could serve the entire company, they would easily cut over 10% from their annual parcel spend.
Lack of Process
How many parcel shipments are made by non-shipping professionals across your company every day, and how many of them were delivered next day air? And how many of those really needed to be there the next day? Often people simply assume that if it is a document going out by a parcel carrier, it needs to be sent overnight, but that is simply not the case. In fact, parcel carriers will normally get a package to its destination on the second day, even if it is marked for ground transport. Clearly, there are savings to be made by putting systems into place that shop for the carrier offering the lowest rate and restricting the cases where overnight shipment is specified. One major insurance company in the US set up a ten-month trial where a multi-carrier system was made available alongside the carrier-supplied systems already in place. They found that they saved an average of two dollars per shipment when the user went with what the new system recommended, and that did not include any savings from a change in the class of service.
Filling out shipping labels does take time, and when it is a task that you do not have to do very often, it can take that much longer. Why not import the name, address, account numbers, and other information from existing systems, or from a personal address book? If you are only shipping documents in flat-pack mailers, why not default to that package type? Desktop shipping systems can be designed to support specific user types, automating much of the required data entry.
How Can Precision Software Help in this Area?
Precision Software now offers a new product, PRECISION Desktop Shipping. It uses the same Transportation Management System engine that supports production shipping in use by countries all over the world to make tens of thousands of shipments every day. But it has been rewritten in Java to be web-based, and has a new user interface that has been specifically developed with the infrequent user in mind. With PRECISION Desktop Shipping you can manage the non-production shipping done at any location in the company that has access to the Internet, even including people working from their home office. This allows you to establish company-wide rates with preferred carriers, as well as control the class of service requested by any combination of the sender, the receiver, and the nature of the shipment. Precision Software is also a leader in trade compliance and shipment documentation with its well-known PRECISION Global Trade Management product from the PRECISION suite, and users of
PRECISION Desktop Shipping can take advantage of these capabilities as well. Because all three products share the same common database and advanced technical infrastructure, non-production shippers can run compliance checks to make sure they are not sending materials to anyone on a US, European, or Japanese denied party list, or making a shipment to an embargoed country. They can also create any documentation that would be required for a shipment outside their own country, regardless of the originating location. This includes the specialized requirements that are applied to hazardous goods, something that often occurs when R&D or testing laboratories are involved.
Precision Software customers are already using PRECISION Desktop Shipping in a wide range of industries including manufacturing, high-tech, apparel, banking, insurance and education. Why not call us to see how we can help you save money and make non-production shipments that much easier for your employees?
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