Selecting Transportation Procurement Software

 Transportation Procurement Software is becoming the hot ticket to support corporate initiatives for reduction in transportation spend and yield efficiency improvements within the supply chain lifecycle. Many companies still perform transportation procurement manually using spreadsheet rate comparisons and by gut feel of market trends. Neither method is very rational. Nor, do they provide the decision making visibility to create a strategically oriented framework from which to drive these transportation cost and supply chain efficiency initiatives.

Transportation managers are researching ways to automate their procurement process and supply chain efficiency. Transportation procurement software does not guarantee instant success nor does it yield instant supply chain efficiency. The step-by-step process involved in deciding how to automate your procurement will likely produce many questions about your goals and strategic directions which will help you obtain success faster.

Transportation procurement success can be benchmarked in several ways. Some companies consider reducing transportation spend as success. Whereas, other companies seek to improve service level guarantees and reduce risk associated with carrier bids. The simple goal of reducing transportation costs must be thoroughly examined and strategically planned. Reducing transportation costs without a strategic plan can cause deterioration of service and additional risk in your supply chain efficiency. It is a well known fact that service providers move high yield shipments first. Creating a long-term partnership with your service providers is important. Shifting freight between many service providers and continually going out to bid may reduce transportation spend in the short-term, but in the long-term jeopardize the net results gained.

Global Tender Management software will help the procurement process. It is not necessary to re-invent procurement software by doing the programming in-house. When selecting transportation procurement software, purchase a hosted SaaS solution. SaaS is known as Software-as-a-Service. Successful transportation procurement is about collaboration and reducing administrative time so decision makers can focus on What-If Scenario Analysis (WISA) and total transportation cost per lane or movement.

A hosted SaaS procurement solution will enable on-demand real time collaboration within different departments of your company and with local and global service providers. A hosted SaaS solution allows end to end collaboration during transportation procurement negotiations and after the process with auditing capabilities. It's nice to get a low freight rate but if your accounting department isn't in the loop your efforts might be in vain.

Another advantage of a hosted SaaS solution is maintenance. Hosted SaaS solutions are updated frequently with the latest technology giving your company the competitive edge in negotiating with service providers. Ask your software provider about the logistics experience of its staff. A software provider with in-house logistics and supply chain experts in ocean, airfreight and trucking is going to lead you to success faster with valuable insights you can leverage in your procurement negotiations.

Make sure your hosted SaaS transportation procurement solution has RDV technology. RDV is known as Role Dependent View. RDV allows users only to view data which is important to their participation in the procurement process. RDV ensures data confidentially and security. Selecting the right transportation procurement software will put you in the driver seat, steering you strategically to better service at a lower total transportation spend.

Nick Matyas is the Vice President of Strategic Initiatives at Freightgate. Freightgate is the world's leading Logistics SaaS Software Solutions provider for global shippers, forwarders, carriers and supply chains. working to effectively manage the complex and demanding information flow in today's worldwide supply chain. Freightgate's applied technological and industry-specific expertise ensures that you achieve and sustain competitive advantage.

The balanced scorecard is a performance measurement tool that uses both financial and non-financial measures to show how an organisation is achieving its objectives. It takes four perspectives (financial, customer, process and learning) which are the keys to excellence and creates performance measures that keep these perspectives in balance. Although first created to help organisations with their corporate strategy, the concept has since been extended to help individual departments and functions such as procurement.

What you need to do is to create strategies for each of these four perspectives that are linked to your procurement objectives and then design performance measures that show your progress towards achieving those objectives.

Here is an example of a procurement balanced scorecard in action.

Financial perspective: this shows how you need to appear to your organisation in achieving your financial objectives. For example, to realise significant cash benefits through improved sourcing practices. Your strategy might be to identify new savings opportunities through improved spend management and build a pipeline of future savings with supporting business cases. The performance measure for this would be the value of savings delivered as a percentage of the value of spend.

Customer perspective: this shows how you need to appear to your internal customers (for example budget holders for spend with third parties). Your objective might be to work with them to identify, quantify and plan mitigating actions to reduce the risk to their business from supplier failures. This is balanced with the financial perspective because it prevents you driving prices so hard that suppliers start to make a loss and withdraw from the market. Your strategy could be to develop a proactive approach to managing risk by creating a greater influence over supply chain partners and their acceptance of shared risk. Your performance measure could be to have zero risks that are rated severe or greater.

Process perspective: this shows progress in developing the processes that are needed for the management of the other perspectives. Your objective in this case might be to systematise processes that are currently carried out manually and your strategy is then to acquire and deploy enabling technology such as eProcurement or knowledge management. A performance measure for this is the percentage of spend that is managed by technology.

Learning perspective: this covers the skills and knowledge you need to acquire in order to meet the objectives of the other perspectives. Your objective could be to establish a reputation as the acknowledged experts in how to achieve more with financial budgets with your colleagues outside of procurement https://smart-contract.com/. Your strategy could be to install a competency map and use it to drive training and recruitment plans. Your performance measure would then be the percentage of the competencies identified in the map that have been acquired by your procurement team.