Aardvark Supply Chain Solutions White Paper

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Aardvark Supply Chain Solutions White Paper

  1. 1. The Common Challenges 1. Sourcing – Large customers drive market pricing. Most companies lack visibility into current industry benchmarks, carrier capacity and competitive rates. 2. Line Item Shipment Data – Shippers have limited access to carrier data and it is typically in a marginally usable format. 3. Invoice Audit and Contract Compliance – Customers with few available resources cannot effectively perform shipment level audits on carrier invoices to insure contract compliance and billing accuracy. 4. Reporting – Limited data and resources lead to reduced reporting capability on KPI’s and important metrics. 5. Analysis – Compiling incomplete data through manual processes gives organizations little insight or value.Our Value Proposition  Negotiation  Technology o Annual review of hundreds of o EDI shipment line item integration carrier agreements o Centralization of data and o Access to current market pricing enhanced shipment visibility data for significant cost savings o Standard reports provided o Benchmarking provides an o Network optimization, expert accurate baseline assessment for analysis and recommendations determining strategy and savings  Shipment Level Audit o Revenue recovery for service failures on guaranteed shipments o Minimizes accessorial risk o Discount validation, contract compliance, accurate invoicing o KPI scorecard items include Detailed Summary, Lane and Cost Analysis, Shipment Accessorial and Surcharge Cost ReportingBenefits and Cost Savings  Sourcing – Sustainable double digit annual savings for customers, averaging more than 12.5% in 2011  Contract Compliance, Shipment Level Audit and Revenue Recovery – Customers historically save an additional 2-4% from a combination of rate improvement (1-2%) and contract compliance (1-3%)  Data Analysis and Lane Optimization – Long-term collaboration with customers on process enhancements and operational implementations that will continue to drive significant, long-term savings www.aardvarkcorp.com
  2. 2. 2 8 E a s t J a c k s o n B l v d .  S u i t e 1 0 2 0 - A 9 8 2  C h i c a g o , I L 6 0 6 0 4  P : 7 7 3 . 7 9 3 . 4 3 3 6  F: 6 7 8 . 6 9 3 . 6 8 4 8 Executive Summary Increasing domestic labor, material, administrative and transportation costs are making corporate goals and objectives exceedingly more difficult to achieve. Already understaffed, most small and medium sized organizations today find it difficult to maintain profitability without sacrificing product and service quality to their customers. According to Armstrong and Associates, the outsourced transportation market is a 127 billion dollar industry growing at 12% CAGR annually. As more companies continue to realize the benefits of transportation management, from LTL and truckload to comprehensive small parcel spend, they will be able to focus on their core competencies and achieving their goals. We understand the challenges and continue to design new and innovative supply chain solutions around the needs of small business by providing the tools, technology and expertise to realize significant cost savings in a complex and competitive global marketplace. About Aardvark Founded in 2011, Aardvark is a transportation management consulting firm headquartered in Chicago, Illinois specializing in global trade network optimization and supply chain solutions. Offering an extensive carrier and customer portfolio, Aardvark’s team of industry experts design and implement customized solutions to meet the organizational needs and industry requirements of each individual customer. Providing both the framework and support necessary to implement sustainable carrier management and cost reduction initiatives, companies of any size can now realize the significant savings and benefits associated with continuous process improvement and supply chain optimization. . www.aardvarkcorp.com
  3. 3. 2 8 E a s t J a c k s o n B l v d .  S u i t e 1 0 2 0 - A 9 8 2  C h i c a g o , I L 6 0 6 0 4  P : 7 7 3 . 7 9 3 . 4 3 3 6  F: 6 7 8 . 6 9 3 . 6 8 4 8 Continuous Process Improvement Common inefficiencies often lead to significant limitations and costly manual business processes. Understanding the challenges faced by most shippers, our team has taken a systemic approach to identify specific customer needs and has developed a customizable process improvement concept unique to our industry. The Aardvark continuous improvement concept is a closed-loop process model. This simple, effective template allows our customers to create efficiencies around their transportation management function through process improvements and enhanced supply chain visibility. Benchmarking Negotiation Program Management Contract Compliance Optimization Our model is also flexible and designed to support any sized company or mode of transportation. Using the template above, our team will develop a complete and customizable solution that is specific to individual business needs and/or industry requirements. Benchmarking Lack of visibility into carrier pricing structures is one of many problems customers face during any carrier negotiation. Without a baseline of general market pricing data, most customers are at a huge disadvantage when negotiating directly with companies like UPS and FedEx. Benchmarking current customer agreements against different companies sharing similar size, common industry, geography and shipment profile is the first critical step in this process. Historical data gives our team insight into current market conditions and allows our customers the best opportunity to maximize their carrier discounts and increase their overall savings. We maintain a very large working database of carrier pricing information that is indexed according to the numerous common variables associated with cost and profitability. www.aardvarkcorp.com
  4. 4. 2 8 E a s t J a c k s o n B l v d .  S u i t e 1 0 2 0 - A 9 8 2  C h i c a g o , I L 6 0 6 0 4  P : 7 7 3 . 7 9 3 . 4 3 3 6  F: 6 7 8 . 6 9 3 . 6 8 4 8 Items such as customer size, industry and average shipment characteristics are all major components of our benchmark analysis as are many other, more complex variables used in every carrier costing model and included in most agreements. Every customer solution requires creating a complete and accurate baseline assessment of all relevant customer data and enough market intelligence to execute a successful carrier management strategy and negotiation. Negotiating Carrier Agreements A successful carrier negotiation can be accomplished in several different ways. Some customers want to be the main point of contact and have Aardvark work as a consultant and advisor. Others may prefer to have us work directly with the carriers on their behalf. Pricing agreements are robust and complex. Carriers take special care crafting agreements that appear advantageous to customers, but often include elements that can be punitive. The complexities of these agreements often prevent customers from creating quality processes around their business needs because of the amount of time and knowledge required to effectively manage a pricing agreement. Understanding current carrier methodology allows our team to navigate the “nooks and crannies” of any proposal, ensuring that the discounts and concessions offered are beneficial to the customer and their company’s bottom line. We provide every customer with a complete overview of the various costing and pricing strategies employed by carriers. This information will increase customer confidence in the process and help ensure the best possible outcome. While Aardvark remains unbiased in our analysis, our customers often have a preference to a current carrier relationship. Depending on the situation, our team will secure an audience and negotiate with the incumbent carrier exclusively so savings can be achieved through a single bid process. If the outcome is insufficient, an RFP is initiated and additional proposals are accepted. In either case, over 90% of our engagements result in both achieving our goal of providing significant savings to the customer and remaining with their current carrier. www.aardvarkcorp.com
  5. 5. 2 8 E a s t J a c k s o n B l v d .  S u i t e 1 0 2 0 - A 9 8 2  C h i c a g o , I L 6 0 6 0 4  P : 7 7 3 . 7 9 3 . 4 3 3 6  F: 6 7 8 . 6 9 3 . 6 8 4 8 Program Management and Contract Compliance Complicated carrier agreements include rolling averages, revenue tiers, base discount structures and other contract terms that make invoices confusing and internal audits time consuming. Dozens of miscellaneous or “Accessorial” charges are difficult to recoup and can easily increase overall shipment costs by as much as 40%! Once a carrier is chosen, customers will continue to work with our team to implement ongoing contract compliance, billing accuracy and revenue recovery programs with operational support for ongoing process efficiency and optimization. Aardvark also offers web-based reporting options that include tracking and rate validation tools. These tools allow customers to review their shipment level detail, miscellaneous charges, billing credits and corrections and the actual on-time performance of their carriers. Our solutions provide each customer with complete shipment level insight and enhanced visibility into their transportation supply chain. Customizable tools and robust technology will create management and compliance reports based on customer needs and requirements. Optimization Services Technology automates your contract compliance and our robust reporting tool will analyze your needs based on specific metrics and economic conditions. Offering customer access to current and relevant market intelligence, our team will make recommendations on optimization by providing an ongoing program of consultation and expert analysis. Services include: Analyzing alternate modes and carriers, customized weight and zone analysis, accessorial analysis and any cost savings opportunity available by aggregating, bundling and renegotiating. Business reviews are scheduled quarterly as an integral part of the Aardvark partnership. Aimed at interpreting customer data and identifying any opportunities for spend reduction, service enhancement and supply chain optimization, we will continue creating new benchmark data as market conditions and shipment characteristics change. As a result of process enhancement, network optimization and establishing key performance indicators, we guarantee continuous improvements in service quality and cost savings throughout the entire term of each customer program and partnership agreement. www.aardvarkcorp.com

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