Parcel - November 2008 - (Page 16) trends ARE YOU MANAGING YOUR PARCEL NETWORK? Or is it managing you? By Mike Williams I n the May and October issues of PARCEL, we discussed unique strategies for taking advantage of great parcel rates, including how to create a world-class contract and optimizing your overall network. But how shippers manage the individual components of their transportation networks can have a huge impact on the financial success of a company’s supply chain. As supply chains increase in complexity, more and more shippers are looking to reduce costs. Actively managing your parcel network can mitigate and often times eliminate costs in the supply chain that otherwise may slip through the financial cracks. Package Level Analytics Managing a parcel network means understanding the full impact of changes that occur within the supply chain. Let’s face it. Change is inevitable in the logistics business. Someone at the corporate level makes a decision, and as logistics professionals we are expected to find a way to make it happen. Most of us manage to get it done. But what about understanding the impact downstream? Can you quantify both the cost and service impact of strategic decisions? Evaluating changes in strategic direction can be a daunting task. When performing complex network analytics, large parcel shippers can’t afford to rely on 16 November 2008 averages. The stakes are simply too high. The old adage that the devil is in the details is very applicable to the parcel world. Having access to detailed, package-level data is a requirement for any complex parcel analysis. Parcel contracts are getting more complex as carriers get more creative with incentives and discounts. Therefore, the level of analysis required by shippers is also getting more difficult. Most shippers don’t have the technology or resources to execute a package-level analysis using a large historical sample. Key financial decisions, such as whether or not to shut down a distribution center, can’t be completed by using average package rates or a small data sample. Parcel shippers who are actively managing their networks know their contracts inside and out, have developed the technology to store and manage their data and have access to resources to perform the analysis. But what do you do if you don’t have the time and resources to get there? Many shippers have chosen to outsource these functions to third party providers or freight payment companies which provide consulting and analytical support in addition to core services. What’s Driving the Numbers? Another key component of managing your parcel network is understanding what is driving the numbers. As a consultant, I www.PARCELindustry.com http://www.PARCELindustry.com
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