For years, collaboration has been a major topic of interest for shippers that focus on best practices and innovative supply chain strategies. But with growing uncertainty around an economic rebound and shifts in capacity, forward-thinking shippers are talking about collaboration to improve their supply chain operations and to better serve their customer base.
For the past five years, Transplace has brought together leading consumer packaged goods (CPG) companies for its annual CPG Summit, where supply chain leaders engage in open, strategic discussion as a way to share knowledge and identify opportunities to work collaboratively. Last month, six leading companies met at a Transplace CPG customer’s headquarters to discuss top-of-mind issues, specifically best practices of collaborative transportation management, customer scorecards and benchmarking.
This event gives Transplace a front row seat to hear its customers and understand their concerns. It also allows the CPG corporate leaders to learn from their peers and make collaborative transportation management an active part of their supply chain strategies. The innovative, actionable discussion produced the following themes:
Improving Service Performance Execution, as Measured by Customer Scorecards: Service is king for CPG companies serving their retail customers. With the added pressure of more retailers adopting compliance programs and levying penalties for not meeting order/delivery terms (e.g., missed delivery window, incorrect shipment weights, etc.), shippers are looking to improve their service performance metrics. To do this, many shippers have focused on aligning their KPIs with their customers’ scorecards. Some CPG companies are even asking retail customers to provide their supplier scorecards so that shippers can measure their performance by the same criteria. During the CPG Summit, the participating companies looked to benchmark their own scorecard initiatives against their peers as a way to ensure they’re measuring the optimal criteria and developing scorecards that will help drive exceptional service to their customers.
Making Collaborative Transportation Management a Reality: While the idea of collaboration has been discussed for years, few companies have taken action on this initiative. Yet, as CPG companies and their logistics partners gain greater network visibility and the ability to more efficiently identify and execute collaborative transportation, more businesses are taking advantage of these innovative and untapped opportunities. The ability to identify network synergies opens the door for shippers to take advantage of several collaborative opportunities, including co-shipping, utilizing dedicated fleets and participating in multi-party bids. For companies already engaging in collaborative shipping strategies, there is an opportunity to bring in additional shippers and expand on how they are working together.
As the idea of collaborative transportation progresses, so does the talk around doing so with a competitor. While previously a taboo subject in the United States, this strategy is being utilized in Europe. Now, some shippers are considering this approach if co-shipping or co-storing with a competitor can significantly reduce supply chain costs and help secure capacity when the market tightens.
Benchmarking Freight Rates to Identify Savings Opportunities: Benchmarking freight rates can help shippers determine if there are opportunities for savings through a bid. This has become increasingly important in an environment of tightening capacity and volatile freight rates. Leveraging timely market benchmarks enables shippers to develop effective strategies to better align their networks with competitive carriers. Seeing the value in benchmarking, many of Transplace’s CPG customers have requested such data across several metrics on a monthly – not just quarterly – basis. An automated process gives these customers access to the necessary market data to efficiently evaluate their freight bid strategy and take advantage of available savings opportunities.
Successful collaborative transportation starts with shippers that recognize its value, are willing to openly share information, and engage in strategic, forward-thinking discussions. As was examined during the CPG Summit, there is tremendous opportunity for CPG companies to reduce transportation costs and better serve customers by collaborating with other shippers both in a forum setting and on the road.
Mark McEntire currently serves as Vice President of Operations for Transplace. Mr. McEntire’s 23 years in transportation and logistics include experience with JB Hunt Transport, Inc. and Penske Logistics. His functional responsibilities have included operations, sales, customer service, and contract logistics. In 2001, he completed a two year Six Sigma certification program with General Electric and is a GE certified Black Belt. In June 2009, he became certified as an APICS CSCP. Mr. McEntire earned a Bachelor of Science in transportation and logistics from Arkansas State University.