As ususal, the Walnut gives thoughtful and clear insight into emerging transportation trends. In this interview, SupplyChainBrian.com conducted an inerview at the SCOPE East Conference in Miami.
http://dev.npifinancial.com/News/TV_Media_Coverage/John_Haber_Keeping_Your_Transportation_Costs_in_Line.php
A lively debate is taking place between Spend Matters, Ariba and Forrester on Procurementleaders.com. The big question: will procurement software really improve performance, or is this just another software purchase with incremental but not game-changing value? What do you think?
With the recent volcano eruption in Iceland, major manufacturers with global suppliers have had to halt operations as flights were grounded throughout Europe. Earlier this year, an earthquake in Chile ground supply chains in the area, halting major food source supplies.
Can disaster planning really help prevent these supply chain disruptions? Are the risks associated with lean inventories worth the cost when operations are halted until supplies are re-stocked? Natural disasters like this, and even the current BP oil leak, can prompt manufacturers to look more closely at their master operating plans.
Read More: http://www.manufacturing.net/Article-Handling-Supply-Chain-Disruptions-052110.aspx?menuid=242
Yep, we’re offering a new resource – developed in-house by our research and delivery teams. Please sign up if you’re interested.
http://www.npifinancial.com/News/Newsletter.php
This edition’s topics include:
Watch Your SaaS – 5 Contract Pitfalls:
Think SaaS is all about savings? Think again. SaaS vendors are well trained to maximize your spend over the term of your agreement. This article will show you how to optimize your SaaS contracts for optimal savings…
NPI – A Supply Chain Optimization Partner? You Bet.
Tired of overpriced, underperforming supply chain consultants? See how American Biosurgical partnered with NPI to optimize supply chain performance well beyond the carrier contract phase…
The 7 R’s of the New Normal CIO:
Welcome to the New Normal. As a CIO or IT leader, what can you do to meet the new demands for higher workforce productivity, lower operating costs and higher efficiency within the context of today’s budgetary demands. This article takes a closer look…
Do You Really Need a 3PL?
If you think outsourcing to a 3PL is going to deliver immediate savings, think again. NPI discusses how a more rigorous spend management approach can be a faster, easier and less disruptive way to reduce costs…
Seven Ways to Reduce Shipping Costs in 2010
It’s that time of year again. NPI experts uncover the trends that will impact your spending – and ways you can reduce shipping costs before mid-year…
Last Friday morning, Jon Winsett, Jeff Muscarella, Heather Barclay and I sat down at the Interncontinental to celebrate Atlanta’s fastest growing companies. Not only was NPI honored as a finalist, we heard from Harvey MacKay – a fresh, funny and articulate speaker. We all agreed his points were highly relevant, especially the ones associating shapes with mindset - thanks Harvey and the Pacesetters.
There’s a new addition to the NPI team, and you should care because she is not only helping us, she’s helping Atlanta. Aside from her extensive work in enterprise technology, Barclay is highly involved with TechBridge, a non-profit organization that specializes in helping other nonprofits use technology to serve their respective communities. If you have not checked out Techbridge – you should. Barclay has served as co-chair of the Digital Ball Sponsorship Committee as well as on the Executive Committee for two years.
The beauty of Techbridge is that it fully employs the minds and skills of its volunteers. It empowers other non-profits like microfinancing does – putting the power of technology into the hands of a diverse community, each member of which has their own vision for social change.
Fox Business just invertviewed us on the future of the USPS. ” Instead of falling further into decline, the USPS should seize this chance to increase efficiency and re-energize its brand,” Winsett said. http://www.foxbusiness.com/story/markets/grim-prediction-future-postal-service/. Let us know what you think!
Ever wondered what some of the best and worst spending moves were last year? http://www.npifinancial.com/News/TV_Media_Coverage/CNN_America_December_2009.php
Here are five steps that you can take — none of which require cutting jobs — to make 2010 a banner year:
1. Benchmark spending. Conduct an audit of all expenditures to find out where you’re overpaying and underutilizing. Not sure if you have the resources to do this internally? Consult with an experienced third-party vendor.
2. Get involved. Stay connected to your company’s spend environment, and know who your vendors are. Be aware of contract renewals and deadlines to avoid any additional costs.
3. Use your calendar. Since companies are driven by quarterly and year-end results, the best time to negotiate is at the end of quarters, when list price is usually meaningless.
4. Negotiate. Now is the best time to pursue deals with vendors, especially those in transportation/shipping and IT. Vendors may make claims that sound non-negotiable, but often that’s not the case.
5. Read the fine print. There’s little regulation in this area, so it’s up to you to make the extra effort to know exactly what you’re paying for.
Following on his article in Manufacturing.Net, John Haber covers the other 2 key areas for focus on cost reductions: unjust contract terms and assessorial fees
Unjust Contract Terms
If a company were to take a closer look at their contract, they may start to see the potential penalties and extra fees. The problem is that many companies don’t understand the language of their contract, or perhaps they don’t pay close enough attention to it.
“If a company has a 3-year contract and they want to renegotiate during the second year, they could face some substantial penalties,” Haber said. “That is unfair to a company that has to deal with market fluctuations and product changes, especially if they are stuck dealing with a carrier that can’t handle those types of volume issues.”
Haber adds that shipping companies may include confusing or deceiving options, like deferred rebates, which would be a discount after the fact, or the carrier could exclude fuel surcharges from rebate calculations.
Assessorial Fees
According to Haber, some shipping companies may add high fees for fuel surcharges, or add delivery area surcharges for certain zip codes, which could add substantial charges to a company’s shipping costs without their knowledge.
And these assessorial fees are rising — fees for address corrections have gone up 40 percent in two years. Ground minimum charges are up 6 percent this year, and they rose 9 percent last year. Delivery area surcharges are up 15 percent, and returns shipments are up 16.7 percent. With just about every area of shipping costs increasing, it’s important to cutback wherever possible.
“The company’s hands are tied,” Haber said. “It’s hard to absorb cost increases and fees like that. Try adding rate caps into shipping contracts, or perhaps add an opt-out clause if the fees become overwhelming.”
When looking at shipping contracts, companies can and should try to object to certain fees that they feel are unfair, Haber adds. However, going head-to-head with a major carrier probably won’t be an easy task.
“Companies can face tough negotiations with carriers,” Haber said. “They have little recourse with only two major carriers. They need leverage to get the best pricing.”
“Companies need to consider bringing in a third party that specializes in transportation costs,” Haber says. “They can find areas for cost-savings that companies may not even be aware of. They deal with carriers and contracts often, and they know what to look out for.”
