about transportation....

1. A S T RAT E G I C IM P E R ATIV E F O R MA N U FACTURERS
Reduce Transportation Spend
How to Optimize and Manage the Integrated Lifecycle of Freight
Rates and Service on a Collaborative Platform
© GT Nexus, Inc.

2. The Challenge
On average, companies spend 5-10% of revenues on logistics-related expenses. Savings
are needed, but are sometimes difficult to find.
Allocating transportation spend in a global supply chain
requires manufacturers to partner with multiple carriers and
logistics providers. Managing these transportation contracts
throughout their lifecycle requires dealing with large amounts
of data in many formats.
Transportation needs change
so frequently when sourcing
is done across continents
that a manufacturer cannot
achieve the lowest possible
spend — while maintaining
customer service — without
an automated system. They must have a way to manage the
lifecycle of freight rates and service, from the bid process to
the fine-tuning of allocation plans, in order to avoid additional
one-time costs.
As demand shifts and fluctuates,
manufacturers should be able
to quickly allocate and reroute
goods according to the latest
customer needs.
2
Overspending on additional one-time transportation costs
No analysis of breakdown of charges (duties, broker fees,
lane utilization issues)
The Root of the Problem
The core cause of poorly managed transportation spend lies in
manual processes and too much non-standardized information. This hinders optimal spending and complicates decision
making.
1. Incredibly complicated transportation strategy
Global transportation planning involves thousands of lanes
in many regions, over varied modes, and all within the constraints of different units of measurement, currencies, and
terms. Because of this, manufacturers must deal with:
Non-normalized information
Huge administrative burden
Impact of Poor Transportation Spend
Management
When manufacturers don’t have the tools to manage the
cycle of transportation contracts, the whole process becomes
less efficient. Expenses that could be eliminated by automation end up cutting into the operating margin and adding
to the cost of goods sold. When their systems aren’t in the
cloud, companies must deal with:
Rates that are not automated
Difficulty deciding which carriers, rates, and service levels
to use
Lack of standardization in use of programs like Excel
Shipments at a more expensive rate than intended
© GT Nexus, Inc.
Difficulty in “closing the loop”
2. Decentralized operations
Large manufacturers often are comprised of various and
competing business units, sometimes grown through acquisition, and usually lacking centralized control. This leads to:
Wasted money from different spending strategies in
each division
3. Extremely dynamic environment
So many players and factors in organizing transportation
make it difficult to predict outcomes. This high level of
change and volatility means manufacturers get:
Unpredictable spend over time

3. The Solution
Companies that want to successfully manage a closed-loop
transportation process across a global supply chain need more
than a traditional ERP system to capture and analyze data on
rates, carriers, and other partners involved in contracting transportation. They need a system that manages transportation
spend in the cloud, from creating the bid through compliance
and auditing.
Value Propositions
In the cloud, bids are run based on data that’s standardized
across currencies and rates. Carriers are easily and accurately
compared and contracts are awarded based on what-if
analysis of different allocation scenarios. Later, managers can
compare spend to the original plan and adjust allocation
accordingly.
1. Save at least 3-8% on annual freight spend
Create/Submit Bid
Gain optimal service at minimal cost
Consider real-world business rules
2. Save 12-15% on overall freight spend by reducing
unplanned buys
Plant
Service Contracts
Rates, Service Details,
Carrier Awards, Amendments
Counter/Negotiate
Award Contracts
Compliance/Audit
Managing transportation spend
shouldn’t be about scrambling
to catch and record information; managers need to focus
on decision-making based on
quality data in the cloud.
3. Streamline bid process and contract management
(lowers SG&A)
Carrier Response
Bid Analysis/Optimization
Tune
The value of managing transportation spend on a cloud platform
is huge. Costly manual processes are eliminated and better
decisions can be made. Benefits
include:
Carrier Routing Guide
Cloud technology captures service contract data in a central location, letting
manufacturers award and adjust contracts throughout the cycle.
Optimize and manage the integrated lifecycle of
freight rates and service on a cloud-based platform.
Use a collaborative, data-driven RFP and allocation engine
4. Synchronize segmentation strategies with transport
plans
DC / Warehouse
5. Learn from carrier scorecard data to drive improvement
Transportation Spend Management and the
Customer
Plant
Networked Company
Plan
To optimize transportation spend, companies must transform
themselvesActual silo-based, inward-facing corporate operators
from
At-Risk Delay
to interconnected, highly agile business network orchestrators.
Dynamic ETA
Store data on rates centrally for all freight agreements
B
Close the loop on an integrated freight audit & payment
platform
Measure compliance with a series of performance analytics
Customers
Access structured bid/response flow and automated
analysis reports
Sense more accurately
Operate more efficiently
Network
Connectivity
Respond faster
Make better decisions
How to use it for transportation spend management:
1. Automate the buying process and evaluate alternatives
2. Manage complicated contracts over time in a systematic way
3. Audit invoices to avoid over-payment
A
Agility
3