Freight Procurement Solutions Are Transforming Supply Chains
- Transportation and Logistics
Why You Should Consider Freight Procurement Sourcing Solution
Procuring raw materials or finished goods is one thing, but the processing of moving those goods from one place to another brings its own set of challenges. Whether you’re in charge of ordering the “things” or managing how and where those things get from A to B, both sides of the procurement equation stand to benefit from freight procurement automation.
First, for shipping companies and third-party logistics (3PL) providers, automation provides an opportunity to develop a strategy for each carrier type, mode, capacity and service. Customers who work with logistics providers who automate these processes reap the benefits by being assured their logistics partner is maximizing their capacities and managing costs with technology.
The Challenges of Freight
In the world of procurement, freight sourcing is a unicorn … it’s unique and complex with multiple modes, varying capacities, innumerable regulation requirements and safety issues. Add to this the varying rate structures and surcharges — with all of these factors to consider, it’s difficult at best to select the providers you want to submit to an RFP.
If you’re still trying to manage all of these details manually, how can you possibly analyze gaps or even compare providers adequately. You might default to selecting the “cheapest” provider, but it may come at the costly price of performance or even worse — safety.
It’s time to catch up
Industry experts call out advanced sourcing solutions as being extremely important to freight procurement. With the rapid spread digitization of business process functions, these experts predict that by 2022, 50 percent of all organizations will have acquired at least one procurement software application. Additionally, 48 percent of freight companies are implementing or plan to implement sourcing and procurement applications in the next 12 months.
This mass adoption of digital tools is indicative of not only the maturation of procurement, but increasing centralization and the goal of streamlining processes to better address increasing responsibilities in order to provide more value to the organization.
Data is king
What if you had a procurement platform that could handle all of the ins-and-outs of specific carrier attributes and detail a provider’s historical performance, safety record, carrier modes and capacities. Imagine if you could analyze current gaps in transportation and address these as key requirements in your RFP. What would that mean to your business, processes, and bottom-line?
Having intelligent data is critical to accurate decision making. Many Transportation Management Systems (TMS) include procurement as a core feature but it often goes unused due to immature features and low adoption. You need something more.
eProcurement solution providers like JAGGAER are leading the charge, developing sourcing solutions with the complexities and challenges of Freight Procurement in mind. JAGGAER’s Sourcing Optimization tool allows transportation companies to automate and evaluate high volumes of complex, conditional bids with multiple suppliers. With the recent release of Routing Network Optimization, users gained the ability to break down their shipping routes by leg to optimize freight step by step, saving millions. JAGGAER continues to innovate with On-Spec bidding to collect both truckload and intermodal bids, multiple bids per item type, and organized named lists that conveniently organize your freight providers by category, criteria, and location.
As you develop your department budget and plan for next year, consider ditching the spreadsheets and make an investment in a more streamlined and accelerated freight sourcing solution process. Companies like JAGGAER can show you how easy and profitable it can be.