What impressed me the most? The absolute pride and company mindset that George Jenkins, founder of Publix made as part of company culture. Both of the Publix Managers exhibited this pride. I wanted to join this Publix team and experience again the pride I had with my UPS career.Family-run Publix is both the largest employee-owned company and the most profitablegrocer in America.
I have not heard or seen this behavior since the early 1970's when UPS went through incrediblegrowth. This was the "Golden Link". I was part of this UPS team of Partners to complete the UPScoast to coast all 48 states authority. Upon completion I was assigned to Watertown, New York asCenter Manager (Think Blizzard of 1977).
In 1975, the Interstate Commerce Commission granted UPS the authority to begin interstate serviceto and from Montana and Utah, and to extend statewide its partial service areas in Arizona, Idaho, and Nevada. UPS was also authorized to connect service in these five states with existing serviceon the Pacific Coast and with all states to the east. As a result, UPS became the first packagedelivery company to serve every address in the 48 contiguous United States. This historicconvergence of service areas became known within UPS as the "Golden Link."
Here is one quote in the Forbes article about Publix:
Todd Jones, who started out as a bagger 33 years ago, stoops down to pick up specks of trash on the store floor.
"We believe that there are three ways to differentiate: service, quality and price," Jones says."You've got to be good
At two of them, and the best at one. We make service our number one, then quality and thenprice."
You can clearly see that this behavior of "Best in Class" works for more than justTransportation/Supply Chain greatness.
It will work with all your carrier selections.
Here is the bottom line:
-- Seek out and align your company's Transportation Providers/Shippers with this type ofcorporate culture.
-- Realize the difference in "Price/Cost".
-- Know your Carrier OR (Operation Ratio) for your book of business.
-- Your Commodities in Your Lanes with Your Carriers with Your Business Rules, reviewed on a set schedule.
1 The Wal-Mart Slayer: How Publix's People-First Culture Is Winning The Grocery WarThis story appears in the August 12, 2013 issue of Forbes.
We recognize that, while the process for creating pricing between buyers and suppliers is fragmented,both parties now have an opportunity to benefit by increasing efficiencies. At the heart of the presentmisalignment is the fact that obvious sourcing business models typically result in the buyer companyand their supplier establishing a static "Rate" that reflects the conditions at a point in time when thebusiness agreement is created.
A static "Rate" is not responsive to dynamic changes in the scope of work, in the market, or incorporate strategy. In addition, many companies do not take the time to use more forward-thinking dynamic sourcing business models and pricing procedures that are intended to keep abuyer and supplier relationship in balance as "business happens in real time."
Here is a recommendation on carrier profitable and how your company can use OR (Operation Ratio) as a tactic.
Carrier Operation Ratio (OR) is a measure of Carrier Efficiency, Operating Expenses/OperatingRevenue X 100. An operating ratio of 100 means carrier breaks even. An OR under 100 means carrier profitability. Over 100 mean carrier loss.
If the carrier handled 10 shipments for a day all 10 could potentially generate an 85 OR OperatingRatio. What happens is that 9 shipments operate at an 85 OR, the tenth shipment OR is 130; theOR is now considerable higher, with less bottom line profit for the carrier.
Talk with the carrier and do not ship that shipment with a 130 OR. See what can be done toimprove this shipment OR. Dynarates™ has 52 ways and methods to help carriers and shippersto obtain a better OR. The carrier will view your account as an excellent profit maker if you don't let them handle marginal or unprofitable freight.
Rewards for shipping LTL v Hundredweight or Multi-weight:
USING LTL CARRIERS (NMFC Class Rated)
LTL palletized can lower rate alternations (Exception to 150390, (Pallets) NMFC Class 60, release at $1.00)
Packages arrive with less wear, good for display on shelf.
Danger of damage decreases
Security increases
All of your packages arrive at the same time
Amount of material handling is minimizes
Price accompanying LTL v Fed-Ex Multi-weigh, UPS Hundredweight reductions as:
Packages travel further
Packages weight increases
Selecting reduced declared value
Lane and date shipped reductions
Payment terms
Outbound Consignee loading docks, inbound loading docks, effortless to receive
There are fewer constraints on package size (New DIM weight pricing in effect now, LTL DIM factor 194)
Selecting the most cost-effective sized cartons. Decreasing the space occupied.
Selecting Class Rates, FAK, Density, Cube, Space Occupied, Volume, LTL pricing.
Carriers are compensated by implementing Space Occupied/Cube or Volume based rate tariffs or in a standard weight based rate. Cubing shipments carriers can calculate Volume Based/Space Occupied shipping charge that can be evaluated to the more outdated weight based charges. Carrier can bill in the most cost effective/efficient way, ensuring fluffy freight pays for the space occupied.
Bill Pugh (Formerly, Executive Director - National Motor Freight Traffic Association, Inc.) and Hank Mullen each have over 40 years of experience and are here to help. We're fanatical about seeing you be successful. If you have any questions or would like any more information, please give us a call at 770-380-1650 or 703-624-4240. Email hank.mullen@dynarates.com orBill.pugh@dynarates.com. We are located in Atlanta, Georgia and Falls Church, Virginia.
