In today’s Supply Chain-centric world we usually concentrate on the bigger, enterprise-wide picture - the complete Supply Chain that starts with raw material acquisition and continues through to delivery of product to our customers. But what about the many dollars controlled and spent by the rank amateurs in your organization – the “Office to Office” letters & envelopes, the small packages of contracts, sales brochures, and samples that drivers carry out of your office front doors every day? Is anyone with Supply Chain expertise managing those shipments? Are there rules in place that spell out when 2 Day or Ground service, or even the Post Office would be appropriate, saving the premiums paid for overnight or even 8:30 AM delivery? And what about those extra costs for Saturday deliveries, oversize packaging, “out of zone” deliveries, and the rest?
In most large companies with multiple locations, controls should already be in place. Each site’s mailroom probably collects intracompany envelopes throughout the day for consolidation into that evening’s “Pouch” to major company facilities or other significant destinations such as suppliers, job sites, and 3PL operations.
But what about smaller offices or companies, where an office manager or executive assistant, with far more pressing (and higher dollar value) things to manage, sends out small packages based on which carrier rep calls regularly? In those offices, often left on their own in the wilderness, it’s quite common for each employee to have their own password to the office’s small package carrier account. With this unrestricted license individual shippers fill out their own airbills, decide what service level to use, and place their packages or envelopes in a pile near the front desk for pickup. Even without any consolidation the shipments get delivered, of course, and the invoices get paid, but who makes sure that the company’s money was spent wisely?
Which brings us to your company. Take a close look at your own “Office to Office” situation. You might discover a small, hidden stash of savings. Maybe not the fistfuls of diamonds we hope to find in major Supply Chain improvements, but you’ll probably uncover enough gold and silver nuggets that together will add up to significant savings. To understand your situation you need to ask:
- Is there a company policy on when to use specific small package services?
- Is the policy being followed?
- Who is responsible for monitoring compliance?
- Is there an approved domestic or international carrier (or two)?
- If not, is it time for a formal bid process?
- Is there an existing cargo agreement that can quickly have “Office to Office” shipments added?
- Is anyone auditing monthly reports for compliance and tracking of excess cost?
- Is anyone reporting on and correcting policy violations?
- Is there a feedback mechanism in place to make behavioral and/or policy modifications?
- Is the existing policy out of date or incomplete?
- Are the dollars involved worth the establishment of a formal program?
The goal of this article, as you have already figured out, is not to provide answers, but rather to pose the questions above and hopefully get you thinking about others unique to your situation. Then you can answer your boss when he or she asks: “Who's Managing the Small Package costs in our offices?” Or better yet, perhaps you can head off that uncomfortable question by proactively proposing your own “Office to Office” shipment management program that includes policies, tracking, and real savings.
George Yarusavage, CTL, C.P.M., is a principal in Fortress Consulting, specializing in Transportation and Sourcing issues. He is also the Second Vice Chair of ISM’s Logistics & Transportation Group and can be reached at gyarusavage@yahoo.com or (203) 984-4957. Membership in the Group is open to all ISM members who are responsible for or have an interest in the Logistics & Transportation fields. This article is part of the monthly series authored by ISM’s Logistics & Transportation Group Board Members, who are current practitioners, consultants and educators. In future columns they will be sharing their views on a number of Supply Chain topics.
In most large companies with multiple locations, controls should already be in place. Each site’s mailroom probably collects intracompany envelopes throughout the day for consolidation into that evening’s “Pouch” to major company facilities or other significant destinations such as suppliers, job sites, and 3PL operations.
But what about smaller offices or companies, where an office manager or executive assistant, with far more pressing (and higher dollar value) things to manage, sends out small packages based on which carrier rep calls regularly? In those offices, often left on their own in the wilderness, it’s quite common for each employee to have their own password to the office’s small package carrier account. With this unrestricted license individual shippers fill out their own airbills, decide what service level to use, and place their packages or envelopes in a pile near the front desk for pickup. Even without any consolidation the shipments get delivered, of course, and the invoices get paid, but who makes sure that the company’s money was spent wisely?
Which brings us to your company. Take a close look at your own “Office to Office” situation. You might discover a small, hidden stash of savings. Maybe not the fistfuls of diamonds we hope to find in major Supply Chain improvements, but you’ll probably uncover enough gold and silver nuggets that together will add up to significant savings. To understand your situation you need to ask:
- Is there a company policy on when to use specific small package services?
- Is the policy being followed?
- Who is responsible for monitoring compliance?
- Is there an approved domestic or international carrier (or two)?
- If not, is it time for a formal bid process?
- Is there an existing cargo agreement that can quickly have “Office to Office” shipments added?
- Is anyone auditing monthly reports for compliance and tracking of excess cost?
- Is anyone reporting on and correcting policy violations?
- Is there a feedback mechanism in place to make behavioral and/or policy modifications?
- Is the existing policy out of date or incomplete?
- Are the dollars involved worth the establishment of a formal program?
The goal of this article, as you have already figured out, is not to provide answers, but rather to pose the questions above and hopefully get you thinking about others unique to your situation. Then you can answer your boss when he or she asks: “Who's Managing the Small Package costs in our offices?” Or better yet, perhaps you can head off that uncomfortable question by proactively proposing your own “Office to Office” shipment management program that includes policies, tracking, and real savings.
George Yarusavage, CTL, C.P.M., is a principal in Fortress Consulting, specializing in Transportation and Sourcing issues. He is also the Second Vice Chair of ISM’s Logistics & Transportation Group and can be reached at gyarusavage@yahoo.com or (203) 984-4957. Membership in the Group is open to all ISM members who are responsible for or have an interest in the Logistics & Transportation fields. This article is part of the monthly series authored by ISM’s Logistics & Transportation Group Board Members, who are current practitioners, consultants and educators. In future columns they will be sharing their views on a number of Supply Chain topics.
