Parcel - October 2008 - (Page 19)

themselves on the contracts or shipping. Educating users can bring about some relief. Front-end shipping systems can force compliance at key shipping locations, such as a corporate ofﬁce where shipping volumes are spread across a wide number of sporadic users. True compliance is driven by visibility. If you really want to make sure that users are using the services and strategies that your team has put in place, start reporting on it. A compliance report or “hot list” distributed to each department head can quickly achieve the desired results and go a long way towards eliminating costly shipping charges. An optimized network is a network cleansed of wasteful shipping practices. Waste in the parcel network is any cost or service that is not adding any value. Most shippers see the contract negotiation process as the primary way to reduce costs or improve service. But shippers should take note that eliminating the waste in their current networks can reduce costs and improve service within the framework of their current carrier agreements. You don’t have to wait until your contract expires to improve. I recently helped a shipper identify one-day AM shipments that were consistently being sent to a commercial customer that did not open until 10:00 AM. The driver was attempting delivery at 9:00 AM and actually delivering the packages later in the afternoon. The shipper was able to switch these shipments to one-day afternoon service and reduced costs by over 20% in the process. Identifying these types of opportunities takes time, resources and technology to execute. In most cases, the opportunities are not million dollar ideas. They are smaller in number and require effort to both ﬁnd and implement. But for the shipper willing to put forth the time and effort, the cumulative payoff can be substantial. Most shippers understand the importance of being able to accurately report and monitor the performance of their network. However, many companies don’t have the right metrics in place to explain variance from period to period. Shippers oftentimes make changes to their networks because they instinctively know the impact will be positive but lack the detailed reporting to measure the actual impact. Volume, mix of services and fuel prices can make the task of explaining monthly cost variances extremely challenging. By implementing a thorough reporting system, shippers can more quickly identify cost and service issues and proactively make the changes necessary to maintain an optimized parcel network. The objective for shippers both large and small is a fully optimized parcel network. Optimization is not a one-time event; it is an ongoing process. Re-optimization is required at major events such as acquisitions, shifts in network strategy and cost reduction initiatives. It is not only the strength of your parcel contract that counts, it is also how you execute it. Mike Williams is the Vice President of Consulting Services at Green Mountain Consulting. For more information, contact Mike at mike@gmcps.com or 901-507-9331 or visit www.greenmountainconsulting.com. www.PARCELindustry.com October 2008 19 http://www.greenmountainconsulting.com http://www.logicor.com http://www.PARCELindustry.com

Table of Contents Feed for the Digital Edition of Parcel - October 2008

Parcel - October 2008 Contents Editor's Note What Would Augello Say? Best Practices Survey Results Going with the Flow Is Your Parcel Network Optimized? Last (Mile), but Not Least Moving From Manual to Automated Fulfillment A Race for Excellence Making Ends Meet Is Your Job Killing You? Software Selection Demystified Controlling Costs On the Mark Product Profile New Products & Services Advertiser Index Wrap Up

Parcel - October 2008

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