THOUGHT Leaders S P O N S O R E D C O N T E N T
Why Transportation Spend Management Visibility is Crucial in Today’s Global Supply Chain
Q Why is transportation spend management so important today? A The world is an unpredictable place, and the global supply chain has never been busier. Global trade reached an all-time high in 2021, jumping 23% to $28 trillion, according to the UN Conference on Trade and Development. Meanwhile, an array of challenges compli- cate themovement of goods — and impact the costs that go with it. Never has it beenmore vital to understand where you are spending your transportation dollars. Visibility with sum- mary and line-itemdetail allocation is critical to understanding where every freight dollar goes. Q What does freight spend management encompass? A Freight spendmanagement is not just about what the total cost on an invoice is—it’s about the detail. Knowing howmuch you spend for specific accessorial charges, as well as every type of service, helps identify opportunities for cost reduction. Knowing your lanes, where you are shipping fromand to, the specific service requirement, the products, allows you tomake informed decisions. Freight spendmanagement is an all-inclusive, deep dive into what goes into the costs of not just moving your products but running your entire supply chain. It’s easy to lose track of major potential cost savings. Consider this scenario. A location of your business in Poland does not know the United States headquarters has negotiated rates with a transportation provider. In Poland, they use a different provider with higher prices. Without true freight spend and contract/pric- ing visibility, those unnecessary costs will
continue, the spilt milk analogy. With good freight spend visibility, the situation can be identified and corrected. You can “stop spilling themilk.” Q What are the benefits of freight spendmanagement? A Experience has proven there are opportunities to savemoney and improve profits nomatter how big or small the company. Imagine a customer spendingmore than $100 million a year for expedited freight without having any spend visibility. By implementing our freight audit and payment systems, we identified this continued expense and then pro- posed a solution to validate these shipments before they weremade. Our expedited freight approval solution saved themmore than $30 million within its first year. We don’t just capture information at the invoice level—we capture all detailed shipment infor- mation on each invoice so the customer has full visibility to their freight spend. If there are discrepancies or issues on an invoice that do not meet the customer’s business rules, we use web portals to interact with either the customer or the transportation provider to highlight those items so they can be fixed, the invoice can be processed, and the provider can be paid on time. Following the audit, we send the informa- tion back to the customer with general ledger codes assigned so that information can be uploaded into their enterprise system, eas- ily allocating costs across their organization and further enhancing the global freight spend management visibility that is critical to stream- lining their processes and savingmoney.
Stewart Dunsmore Senior Vice President Supply Chain Services & Technology nVision Global sdunsmore@nvisionglobal.com nvisionglobal.com
40 Inbound Logistics • April 2022
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