Archive for the ‘Transportation Procurement’ Category

Feeding TexasWe all know the saying, “An apple a day keeps the doctor away.” However, for many of our neighbors, it’s easier said than done. According to some recent surveys, most of you reading this eat about 40% more fresh produce than the segment of the population that is served by our nation’s food banks. In Texas, according to the recently released Feeding America Map the Meal Gap data, 17.6% percent of the overall state population struggled to avoid hunger in 2013, including nearly two million children.  Surprisingly, in many cases the problem is not the availability of food -, it is a supply chain problem.

Through a CSCMP friend at the Houston Food Bank, I recently started a project with Feeding Texas, a network of the 21 food banks serving the state, to increase the amount of fresh produce we can deliver per dollar spent.  Just like in many private sector companies that have grown in size over time, each Feeding Texas member food bank operates independently.  Across the food banks resources are tough to come by and tend to be used in the day-to-day operations to bring in food and get it out the door to clients.  Thus, they have not yet adopted many of the current best practices in supply chain management.

Even though there is more fresh produce available than they can use at any given time, many of the key issues that Feeding Texas members face, like

  • Lack of transportation capacity to move produce when it is offered
  • The high cost of transportation that consumes limited budget funds and restricts the amount of produce that can be obtained
  • Purchase of Out-of-State produce when produce is available in Texas

are typical of an organization that haven’t implemented modern network design, supply/demand planning and transportation planning processes.

We are currently collecting data to complete a more extensive review of the total Feeding Texas supply chain to identify opportunities to move more fresh produce at a lower cost.  We are also engaging with key industry contacts and donors to help us understand whether we can adopt some of their best practices in the movement of fruits and vegetables.  I have to say that I have been very gratified at the number of times I’ve called a supply chain colleague to ask for their help on this project.  In almost all cases, the response has been an unhesitating, “What can I do to help?”

I’ll keep posting our updates as we hit new milestones in our project.  In the meantime, I would ask you to reach out to the food bank in your neighborhood and ask if your supply chain expertise can be put to good use.

Profit Point, the leading supply chain optimization software and services company, today announced a partnership with TBB Global Logistics, a leading domestic and international transportation management provider. The two companies have partnered to provide an integrated solution of logistics and supply chain optimization software and services to provide global manufacturers and distributors an integrated supply chain network and distribution plan.

As a logistics industry leader since 1946, TBB Global Logistics has the knowledge and expertise to develop and manage the most complex supply chain strategies for your company. Together Profit Point and TBBGL can deliver a complete solution to provide increased efficiency, lower total costs, superior customer service and a more competitive position in a dynamic global marketplace. TBB Global Logistics is a non-asset based, supply chain management company that relies on superior, web-based technology and relevant expertise to enable clients’ ability to effectively and profitably compete in a global marketplace.

“Large domestic and international clients are pursuing deeper integration of their supply chain strategies into their day–to-day operations,” noted Dr. Alan Kosansky, Profit Point’s CEO. “Partnering with a company like TBB, provides our clients the ability to develop a seamless transportation and distribution strategy and implementation plan.

Profit Point now has access to global transportation data resources and 3PL expertise insight to deliver the entire package: the strategic supply chain plan along with an operational solution covering supply chain distribution, logistics and transportation engagements. Together, the two companies deliver a unified team of dedicated professionals to meet the demands of global manufacturers and distributors by helping customers design and implement an optimal supply chain.

To learn more about Profit Point’s supply chain software and services, call us at (866) 347-1130 or contact us here.

About Profit Point:

Profit Point Inc. was founded in 1995 and is now a global leader in supply chain optimization. The company’s team of supply chain consultants includes industry leaders in the fields infrastructure planning, green operations, supply chain planning, distribution, scheduling, transportation, warehouse improvement and business optimization. Profit Point’s has combined software and service solutions that have been successfully applied across a breadth of industries and by a diverse set of companies, including Dow Chemical, Coca-Cola, Toys “R” Us, Logitech and Toyota.

About TBB Global Logistics:

Founded in Baltimore in 1946, TBB Global Logistics provides complete supply chain management services. TBB provides domestic and international transportation management and supply chain solutions through its Supply Chain GuardianSM brand. Supply chain support services include sourcing, procurement, customized warehouse logistics, inventory management and reverse logistics. TBB offers web-based supply chain management applications and supply chain consulting. Headquartered in New Freedom, Pennsylvania, TBB Global Logistics also has offices in Maryland, located in Hanover by BWI Airport and sales teams throughout the United States. TBB Global maintains a network of agents in countries around the world. TBB is a third generation, family-owned company.

When you slice up the supply-chain into its different components, one of the highest areas of expense, and an area that many companies struggle to comprehend and manage, is transportation.  Why is it, that for many otherwise sophisticated companies, no one within the organization is held accountable to know what they spend on freight, where they spend it, why they spend it and how they can change it?

A recent transportation survey conducted by Profit Point shows 75% of our survey respondents continue to struggle with the trade-off between adding carriers to reduce costs, and limiting the total number of carriers so they can be effectively managed for safety and service.  Probably the most surprising finding for me was that one out of every four respondents was unable to confirm whether or not their most recent improvement projects in the transportation arena had any impact.  Wow! One quarter of transportation managers can’t measure whether their efforts made a difference.  In this uncertain economic environment where every penny counts, I think we should expect more from ourselves.

Another find – only 30% of respondents had been out in the market with a bid over the previous 12 months.   At a time where shipping volume is picking up and carriers are becoming more aggressive with pricing, it seems we should be very close to the market to make sure we’re paying the right amount for our freight.  With less than a third of shippers out in the market with a bid over the last year, how can we be sure that the price increases being proposed by carriers are reasonable?

Transportation continues to be a significant portion of the total supply chain cost, therefore for many companies, the single most significant area to focus cost reduction attention.  Have we lost our vision?  Is it time for a new pair of glasses?  Our survey seems to suggest it.  If you have been anointed as the Czar of transportation for your company, then you need to be in touch with the market and confident that the changes you implement are having a meaningful impact on the bottom line.

You can download the report by clicking the link below:

Download the
Transportation 2011 Survey Report

I’m a picture guy.  In our kind of work, we have to be able to take a lot of data and make sense out of the process or processes that generated it.  I used to work with a fellow named, Bill, who has a PhD in Operations Research, and is probably one of the smartest people I’ve ever met in my life.  Bill is a guy who can look at six or seven big tables of numbers and then say something like, “… and the answer is 7.563.”  He was usually right.  I don’t have that talent to create the linkages among lots of different types of information in my head to come up with a conclusion like that.  That’s why I like pictures.

Recently, one of my colleagues and I were visiting a manufacturing plant to assess their production scheduling process.  The client invited us to visit the plant because they knew they had a problem.  As we followed the scheduler through his day, we began to understand the root causes of the problem.  So how did I choose to communicate what we’d found to the client?  You guessed it; I drew a picture.

When the plant manager first opened the file containing the flowchart of their existing process, she told me she only needed to see that it took me three letter-sized pages to document to the process to know that the process was much too complex and cumbersome to be fixed with a couple of “quick hits.”  Why is it that she knew without studying the details that we needed a full redesign to fix this process?

I think many of us are just built that way.  I know there is a lot of clinical and academic research that shows how we human beings use our sense of sight as a first preference for observing the world, and that there are specific parts of our brains that are able to detect visual patterns or the lack thereof.  However, I don’t think we need to see the results of that research to know why the phrase, “a picture is worth a thousand words,” is such an enduring statement.  It rings true with all of us.

That’s why I like a software product called Tableau.  It is marketed as a visual analysis tool and I think it does its job quite well.  Although I don’t claim to be an expert user, I have found it quite useful when I need to understand what’s going on in a large dataset.  Let me illustrate using an example from a recent transportation analysis that we did for one of our clients.

Our client had grown by acquisition and managed its transportation in a very de-centralized manner.  Each of the sites contracted individually with their own set of carriers, using their own set of criteria for selecting and then awarding business to the carriers.  Profit Point was called in to help the client understand the cost-savings opportunities that would result from a more centralized approach to carrier contracting and management.

Our first priority was to find out what was going on at all of the different sites so we developed a database from the client’s freight payment records to do it.  Now, picture this (pun intended).  We now have over 63,000 individual shipment records to analyze and we needed to do it in a way that told a story that we could understand and that we could then communicate to the client.  The first thing we did was look at the spend by plant and by carrier.  The spend by plant was more of a prioritization issue, to understand which of the plants had the highest freight spend, but the spend by carrier became the first part of our story as you can see in the two pictures below.

This second chart was a very powerful image to help the client quickly see that the number of carriers being employed was out of control.  You don’t even need to be able to read the name of the carrier on the Y-axis to know that there are too many carriers in this picture.  Many of these carriers had only a single load all year long, but were still carried in the system.

We also wanted to show the client the significant different in pricing policies across their carrier base.  The following slides show how we used some more of Tableau’s functionality to make our point.

By plotting cost vs. distance for all of the shipments, we were able to see the general correlation of cost with distance that we expected, but we also saw a number of outliers that we wanted to better understand.

We then highlighted a group of very high-cost shipments and kept only those points to see what we might find out.


Using a simple stacked bar chart, it was very apparent that carrier “C-g,” the red bar in the chart at left, was the main player in this group.  Once “C-g” was identified, we were able to demonstrate that their cost was always greater than the average cost for shipments with distances greater than 200 miles and by as much as 50-66% for shipments with distances greater than 1000 miles.

Again, these pictures allowed us to find one of the smoking guns inside this mass of data.  Suffice it to say that we found many other opportunities through similar visual analysis.

Because of these pictures, and others like them, it was an easy sell.  Using a tool that makes it easy to use the built-in “intelligence of our eyeballs,” we were able to develop a convincing call to action for our client, who went out to the market with a targeted freight bid and reduced their transportation spend dramatically.

As technology continues to penetrate more and more aspects of business and our everyday lives, it makes more and more data available for us to turn into useful information.  But it’s only useful information when we can put it into a form that we understand and can communicate it to others.  That’s why I’m a picture guy.

To learn more about Profit Point’s transportation services, call (866) 347-1130 or contact us here.

Carriers are hungry for business. Nationally, freight volume is at its lowest level in years, and the Freight Transportation Services Index is beginning to rise.

Many carriers went out of business in 2008 and 2009. The stronger ones survived and have typically sustained their business by establishing high levels of asset utilization. This has been achieved by limiting empty miles and finding complementary loads to ensure trucks are being used in both directions. This creates a wonderful opportunity for shippers: By identifying those carriers who can offer you the lowest rates because your loads help them balance out their network, you can find significant cost saving opportunities when purchasing transportation.

Learn about the essential steps that you can take today to cut costs and gain advantage in your carrier negotiations. Click the link below to access our new white paper:

“Companies that use advanced routing and scheduling optimization
solutions that are designed specifically for the transportation industry
can reduce transportation costs by up to
20%. “

Profit Point’s supply chain consultants have seen decades of economic boom and bust. Learn about the essential steps that you can take today to cut costs in the near term and prepare for future economic scenarios. Click the link below to access our new white paper:

Profit Point’s transportation procurement optimization service reduces outsourcing costs by quickly analyzing multiple carrier bids and provides insightful data for decision makers

Profit Point, a leading Supply Chain Optimization company, today announced the introduction of Transportation Procurement, an optimization service that will cut costs for manufacturers and distributors that outsource some or all of their shipping to third-party carriers. The service provides transportation analysts and procurement managers unsurpassed ability to quickly analyze carrier bids and evaluate the best combination of carrier discounts, enabling them to negotiate rates to ship at the lowest total cost.

“Our clients are looking for new ways to reduce costs and gain productivity in every aspect of their business.” said Alan Kosansky, Profit Point’s President. “With the constant fluctuations in the transportation market, this service enables clients to manage their core carrier base and make effective decisions quickly, negotiating with carriers from a position of strength.”

The company’s optimization service and technology provide the analytical horsepower to the transportation or procurement professional to quickly evaluate different mixes of carriers and lane assignments, making trade-offs among both quantitative and qualitative business goals. The service’s richness and flexibility enables clients to dictate constraints to enforce site-specific, regional or global limits on the number and types of carriers that are included in the awarded lanes.

“We have deployed carrier bid optimization software to our clients in the past; however we have found that many of our clients prefer to leverage our deep analytical expertise. By partnering the client’s negotiating team with the analytical insights we provide them, they are able to reach the best possible outcomes in their negotiations with carriers,” said Kosansky. “And when our clients are ready to bring the analysis in house, we readily provide our Profit Procurement for Transportation software.”

Most large manufacturers have hundreds of carriers and thousands of lane options available to ship products from their manufacturing and distribution centers to their customers. The firm’s procurement optimization service addresses all inbound and outbound transportation routes, including rail, truck (bulk, packaged, and LTL), and marine bids, and simplifies the selection process while lowering the overall transportation costs.

To learn more about Profit Point’s transportation procurement optimization services, call us at (866) 347-1130 or visit www.profitpt.com.

About Profit Point:
Profit Point Inc. was founded in 1995 and is now a global leader in supply chain optimization. The company’s team of supply chain consultants includes industry leaders in the fields infrastructure planning, green operations, supply chain planning, distribution, scheduling, transportation, warehouse improvement and business optimization. Profit Point has combined software and service solutions that have been successfully applied across a breadth of industries and by a diverse set of companies, including The Coca-Cola Company, General Electric, Logitech, Rohm and Haas and Toyota.

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