Asking, “What’s the point of conducting regular procurement events?” is just like asking, “What’s the point of conducting routine car maintenance?” You could skip some maintenance, but you’d probably pay for it in the end. And the same goes for procurement events. Whether it’s your supply chain or your car, regular “maintenance” can keep things running smoothly and save you money.
To stick with my metaphor, all the parts in your car need to run smoothly together to keep the engine in peak condition. Your routing guide allows you to rely on pre-determined carriers and rates—keeping all the pieces of your supply chain running smoothly.
As your car ages, it become less efficient, in turn, your engine is more susceptible to damage. Eventually your entire engine could completely shut down. Talk about expensive!
While a lack of regular procurement events may not shut down your entire supply chain, it can certainly keep things from running smoothly and lead to additional expenses. Research from Iowa State University shows that routing guides, like car maintenance, have a limited life span.
*Click the infographic to view a larger image.
To learn more about why frequent transportation bids make sense, you can check out the research we conducted with Iowa State University in our white paper, Stale Rates Research: Benefits of Frequent Transportation Bids.
Steve Raetz, Dir. Research and Market Intelligence, joined C.H. Robinson in 1989 and currently focuses on areas contributing to the evolution of C.H. Robinson’s supply chain value proposition to its clients, supporting client sales and relationship strategies through transportation market insights and academic research. Previously he led CHR’s consulting team, was General Manager of Minneapolis National Accounts and served as the Southeast Regional Transportation Manager for the Quaker Oats Co. Steve also is a member of advisory boards with three universities supply chain programs.
Great analogy. Yes, regular maintenance does require an investment, but you need to think long term. As you explained, maintenance costs are going to be much less than if you neglect to conduct regular maintenance and encounter a very costly problem down the road because of it.