The parcel landscape is rapidly changing in an increasingly competitive market and if you’re not willing to adapt, survival will be short-lived. How we adapt to the change will separate the winners like, Apple and Amazon, from the pack. There are more carrier choices, more restrictive contracts and fewer “deals” being offered. The challenge of change presents opportunities to examine our progress and improve our efficiency. As a consultant to some of the largest parcel shippers, I’ve noticed three ways you can adapt and be prepared.
3 Ways to Prepare and Craft a Winning Strategy
First, establishing a carrier neutral network (from both an IT and internal dependency perspective) can have a tremendous impact on reducing transportation costs. Having the flexibility to utilize alternative carriers can free up your network to take advantage of strategic savings. For example, we’ve seen clients heavily tied to a single carrier and their contracts did not contain enough flexibility to easily integrate other carriers into their network so they were unable to effectively negotiate appropriate discounts. There are some challenges to implementing additional carriers, but the savings can be significant enough to outweigh the hassle of making the change. These challenges include carrier contracts that are inflexible due to revenue or volume commitments, lack of IT capability to implement additional carriers, and operational infrastructure limitations (multiple shipping dock splits). A parcel spend consulting firm can add significant direction and guidance to this process to help you overcome the challenges and cash in on the savings.
Second, establish clearly defined goals for your supply chain that govern your decision making. Any shipper who is operating without clearly defined goals is in dangerous territory. Strategy is a key enabler to optimization and goals are primary building blocks in a strategy. There are many elements to consider when defining your goals and objectives. For example, do you prioritize quality service even if it costs the company? Or is it all about reduced spending even if service suffers? Are you planning for future volume growth? Once you’ve established your goals, you have to connect it to your daily decision making process. Does every decision you make support and drive forward your objectives?
Finally, develop the ability to identify and analyze the impacts of network, contract and business changes in your parcel network. An Accenture study found the 97% of executives report having an understanding of how big data analytics can benefit their supply chain but only 17% say they implemented it in at least one supply chain function. You need the ability to monitor and report on key metrics and often this requires visibility of your business not just at the macro level, but more importantly at the micro level. Things like volume, mix of services and fuels costs can tell an informative story month-to-month about your parcel network. If you don’t have access to data in your parcel network, you’re operating blind and missing opportunities to optimize and adapt. Developing a data driven strategy will keep you operating with eyes wide open.
Are you ready to embrace the challenge of change? If so, opportunity is knocking at your door. The road to success may contain a few roadblocks, but if you are willing to commit to your goals, establish network flexibility, and create visibility to data and analytics, you’ll overcome the challenges with ease. The result will be a highly optimized supply chain that’s resilient despite the evolving industry.
Michael Williams is the Senior Vice President of Operations at Green Mountain Consulting. GMC helps the largest parcel shippers optimally manage over 3 billion dollars in parcel spend. Our Parcel Spend Management solution combines our best-in-class parcel invoice audit solution with strategic resources to engage our customers in the optimal management and execution of their parcel network. Learn more at www.GreenMountainConsulting.com.
3 Ways to Prepare and Craft a Winning Strategy
First, establishing a carrier neutral network (from both an IT and internal dependency perspective) can have a tremendous impact on reducing transportation costs. Having the flexibility to utilize alternative carriers can free up your network to take advantage of strategic savings. For example, we’ve seen clients heavily tied to a single carrier and their contracts did not contain enough flexibility to easily integrate other carriers into their network so they were unable to effectively negotiate appropriate discounts. There are some challenges to implementing additional carriers, but the savings can be significant enough to outweigh the hassle of making the change. These challenges include carrier contracts that are inflexible due to revenue or volume commitments, lack of IT capability to implement additional carriers, and operational infrastructure limitations (multiple shipping dock splits). A parcel spend consulting firm can add significant direction and guidance to this process to help you overcome the challenges and cash in on the savings.
Second, establish clearly defined goals for your supply chain that govern your decision making. Any shipper who is operating without clearly defined goals is in dangerous territory. Strategy is a key enabler to optimization and goals are primary building blocks in a strategy. There are many elements to consider when defining your goals and objectives. For example, do you prioritize quality service even if it costs the company? Or is it all about reduced spending even if service suffers? Are you planning for future volume growth? Once you’ve established your goals, you have to connect it to your daily decision making process. Does every decision you make support and drive forward your objectives?
Finally, develop the ability to identify and analyze the impacts of network, contract and business changes in your parcel network. An Accenture study found the 97% of executives report having an understanding of how big data analytics can benefit their supply chain but only 17% say they implemented it in at least one supply chain function. You need the ability to monitor and report on key metrics and often this requires visibility of your business not just at the macro level, but more importantly at the micro level. Things like volume, mix of services and fuels costs can tell an informative story month-to-month about your parcel network. If you don’t have access to data in your parcel network, you’re operating blind and missing opportunities to optimize and adapt. Developing a data driven strategy will keep you operating with eyes wide open.
Are you ready to embrace the challenge of change? If so, opportunity is knocking at your door. The road to success may contain a few roadblocks, but if you are willing to commit to your goals, establish network flexibility, and create visibility to data and analytics, you’ll overcome the challenges with ease. The result will be a highly optimized supply chain that’s resilient despite the evolving industry.
Michael Williams is the Senior Vice President of Operations at Green Mountain Consulting. GMC helps the largest parcel shippers optimally manage over 3 billion dollars in parcel spend. Our Parcel Spend Management solution combines our best-in-class parcel invoice audit solution with strategic resources to engage our customers in the optimal management and execution of their parcel network. Learn more at www.GreenMountainConsulting.com.
