Inbound Logistics | July 2007 | Digital Issue

MANAGEDTRANSPORTATION SERVICES: Leveraging a New Logistics Model for Competitive Advantage Leading companies today are finding that while transportation management is not one of their core competencies, it is a critical component of their overall competitive advantage. These enterprises are migrating toward a new business model – called managed transportation services (MTS) – that allows them to outsource non-core activities while maintaining other key logistics functions in-house, along with control over carrier relationships. For these companies, the MTS model is providing a new competitive advantage. A New Model forTransportation Management Many companies have discovered that outsourcing their entire transportation management function can result in giving up too much control and may be cost prohibitive. Retaining key functions within the company (carrier relationships, routing guide maintenance, accessorials payment decisions, visibility and control over utilization, etc.) may be the preferred solution, and the new managed transportation services business model provides that option. Managed transportation services allow the outsourcing solution to be tailored to a particular company’s business objectives. Companies can outsource functions that may not be core competencies while still retaining oversight of their transportation operation and strategic carrier relationships. The core of this new model is an on-demand transportation management solution with its network of carriers, suppliers, and other trading partners combined with business process management services. The following case studies demonstrate how companies working with LeanLogistics Managed Transportation Services (LLMTS) are already driving significant value by leveraging the MTS model.

WITH OUR OUTSOURCING MODEL, YOU CHOOSE THE SERVICES THAT ARE RIGHT FOR YOU!

Transportation Procurement

ACE chose to outsource procurement

Carrier Contracts

Rich’s chose to outsource all day-to-day activities

Transportation Planning

Procter & Gamble chose to outsource coordination.

Transportation Coordination

CASE STUDY: Rich Products Rich Products Corporation, a leader in the food service industry, has an extensive distribution network that encompasses over 60 locations, including 17 plants, 35 other production locations, and five regional distribution centers. Some of the network locations were managed by third parties, and there was no consistency in processes or procedures. Procurement was

performed by Corporate Management, and a third-party handled freight payment. Rich’s decided to outsource the daily management of transportation operations in order to centralize and standardize its processes, but to retain strategic control of its carrier relationships. Rich’s chose LLMTS to centralize command and control of its transportation processes.

AEP chose to outsource payment processing

Payment Processing

THE DECISION IS YOURS!

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