Transportation Coping Skills

Logistics Coping Skills For a World of $4 Gas Drew Forte Director, Supply Chain Improvement, FORTE

Poll question: ,[object Object],Courtesy of HBO D… B. They’re afraid of electronic communication C. You’d better pay them on time What do neurotic mobsters and logistics professionals have in common?

D. We all need some good “coping skills” for today’s painful, stressful times. Courtesy of HBO

Macro-economic conditions have changed ,[object Object],|

Macro-economic conditions have changed ,[object Object],[object Object],[object Object],[object Object],[object Object],|

Macro-economic conditions have changed ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],| Courtesy of Farrar, Straus and Giroux, New York OLD NEWS

Macro-economic conditions have changed ,[object Object],Courtesy of The Boston Globe Price increases bolster Kraft July 29, 2008 Kraft Foods Inc. reported earnings that topped analysts' estimates and said full-year profit may be higher than it forecast after increasing cheese, chocolate, and Planters peanut prices to cover rising energy and grain costs. Courtesy of The Boston Globe P&G will boost product prices by up to 16% | Courtesy of Kraft Foods

Macro-economic conditions have changed ,[object Object],[object Object],[object Object],|

Companies shift to a tactical view of logistics | #1 Pressure: Increasing freight rates and/or accessorial charges 2008 #1 Pressure: Need to use transportation to improve overall supply chain performance 2007 STRATEGIC TACTICAL

7 “Coping Skills” to contain freight costs | “ Coping Skills” to contain freight costs 7

7 “Coping Skills” to contain freight costs ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],| Re-rationalize your supply chain network 1

7 “Coping Skills” to contain freight costs ,[object Object],[object Object],[object Object],[object Object],| Re-evaluate your transportation network 2

7 “Coping Skills” to contain freight costs ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],| Practice load optimization 3 Fast Fact: 70% of Best-in-Class companies have programs in place to shift LTL shipments to TL where applicable; only 56% of Industry Average companies do. (AberdeenGroup, August, 2008)

7 “Coping Skills” to contain freight costs ,[object Object],[object Object],[object Object],| Reduce the need for expedited freight 4 ,[object Object],[object Object],[object Object]

7 “Coping Skills” to contain freight costs ,[object Object],[object Object],[object Object],[object Object],[object Object],| Run more effective bid processes 5

7 “Coping Skills” to contain freight costs 5 Figure 5: The Transportation Management Wheel Source: Aberdeen Group, January 2008 Run more effective bid processes (continued) |

7 “Coping Skills” to contain freight costs ,[object Object],[object Object],[object Object],[object Object],[object Object],| Improve rate of first choice carrier acceptance 6 Fast Fact: 85% of Best-in-Class companies monitor carrier performance regularly; only 44% of average companies do. (AberdeenGroup, June, 2007)

7 “Coping Skills” to contain freight costs ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],| Audit and pay invoices more efficiently 7 Case in point: A large CPG company has saved over $120,000 annually by bringing the audit-and-pay process in-house and automating it

7 “Coping Skills” to contain freight costs | Audit and pay invoices more efficiently (continued) 7

Don’t forget the bigger picture… | Don’t forget the bigger picture…

Don’t forget the bigger picture… | #1 Pressure: Increasing freight rates and/or accessorial charges 2008 #1 Pressure: Need to use transportation to improve overall supply chain performance 2007 STRATEGIC TACTICAL

Don’t forget the bigger picture… | Transportation management is the linchpin in a comprehensive strategy of supply chain improvement.

Don’t forget the bigger picture… Connectivity Visibility Reliability Agility Efficiency Service Supply chain efficiency and service don’t appear overnight – they are the result of a calculated strategy that often begins with improved transportation management. |

Don’t forget the bigger picture… | Does your TMS play well with others? TMS WMS OMS YMS POS SCV DOM SCM

Don’t forget the bigger picture… | Example…

Supply Demand OMS Fulfillment Plan WMS SCV TMS TMS TMS SCV SCV DOM Rail Shipment Inter-facility Truck Ocean Vessel Warehouse A Warehouse B Offload Load to Rail Consolidated Full Truckload Cross Dock Direct Less-Than-Truckload Shipment Deconsolidate Load !

Thank You! Drew Forte Director, Supply Chain Improvement FORTE [email_address]

Transportation Coping Skills

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