Guiding Principles of Strategic Transportation Management

Written by Neal Willis
     

ALIGN CORPORATE & TRANSPORTATION STRATEGIES

Your transportation strategy and its operational role iStock_000064532453_Medium_Strategywithin the company should be a reflection of the business you’re in.  With your transportation strategy aligned to your corporate business strategy, everyone in the supply chain is much more likely to make sound, day-to-day decisions that are in line with company and departmental goals.  If your business model is selling quality along with value, then transportation polices should reflect the same.  For example, it may be worth paying for guaranteed time delivery service when a large customer needs an order to arrive while installers are at a job site.  On the other hand, when sending a warehouse stock transfer to another branch across the country, a few dollars might be saved by sending it via rail or intermodal versus common carrier.

RELATIONSHIPS ARE WORTH MORE THAN DOLLARS

You’ll tend to pay more attention to what’s at stake any time you have a vested interest in the stakes themselves.  As a shipper, leaving one provider after another based solely on rates will eventually catch up to you.  Find a provider that truly wants to understand and improve upon your transportation practices, rather than one who simply throws out enticing rates from time to time.  Of course, you must also be willing to work with them to help improve upon their operations.  By doing so, you will form a priceless relationship that can’t always be measured in dollars.  Shippers and carriers working together in the good times and bad tend to work together better all the way around, including when problems arise on either end.

PAY ATTENTION TO THE DETAILS

Getting stuck in a rut can be the cause of underlying issues being overlooked.  Just iStock_000074168881_Medium_Businessmen_Handshakebecause sales are up ten percent doesn’t necessarily mean that transportation costs will be, too.  Customers could be picking up more orders, shipments could be heavier and/or lighter and, as a percentage of the sales price, transportation costs may have gone up more than the numbers reflect.  Keep an eye on the big picture, but drill down to the details at the customer level for identifying shifts in buying patterns and market demand.  That’s where following the details can flow back into changes in your operations and costs. 

FOCUS ON CONTINUAL IMPROVEMENT

The most innovative and successful companies are often times the ones who think outside of the box. Focus on process improvements wherever possible and don’t be afraid to challenge the status quo.  Just because something has always been done a certain way, doesn’t mean it can’t be done better.   Packaging and handling are two areas that should always remain a focus for improvement.

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