This post is based on material from the 2013 Spend Matters / Procurian research brief: Logistics Category Perspective: Strategies and Trends in Trucking and Intermodal (free, registration required). Contributors from Procurian include Ed Sands, Global Practice Lead-Logistics and Scott Youngs, Logistics Category Management Group Leader. Spend Matters contributors include Jason Busch, Executive Editor, and Pierre Mitchell, Chief Research Officer.
The greatest opportunity for savings in the past two years has been to drive churn in the supply base. Companies that have even a modest appetite for change (e.g., 20-30% turnover in suppliers) have been able to drive material savings in sourcing events. Yet organizations that are hesitant on changing suppliers struggle when it comes to driving savings – and many in this camp have been faced with price increases.
The reality of the situation is that just as customer networks change every year, so too does the truckload network (and ocean carrier networks for that matter). If you’re willing to consider shifting market options, there are almost always carriers that can serve your requirements more affordably.
If organizations can reshuffle their network in truckload, LTL – over-the-road in general – there are numerous opportunities for cost avoidance and savings. For organizations that are willing to incur even a modest level of churn, it is possible to net out savings from sourcing efforts while staying predominately with your incumbent supply base.
The concept of network design and balancing is emerging as the next frontier for savings and restructuring how we look at transportation as a category. Depending on a variety of factors, for example, a shift to rail might work in certain supply chains. But in all cases, while executives within companies are asking to spend less on energy and improve emissions profiles, the realities of business require dissecting underlying requirements.
For further analysis of this topic, download the complete Spend Matters and Procurian research brief today: Logistics Category Perspective: Strategies and Trends in Trucking and Intermodal.