Examining your transportation costs can pay big dividends. Transportation is one of the highest cost components of cost-of-goods-sold and your supply chain. Operating issues like volatile freight rates (all modes), fuel costs, capacity, inefficient route planning, port and highway congestion, empty miles and productivity impediments are some of the key challenges companies are facing more than ever.
Transportation can be optimized in many ways in order to reduce cost while potentially improving customer satisfaction. Here are some of the actions and analysis to drive improvements:
- Perform transportation modeling and simulations for your network – this will consider alternate transportation modes, costs, and customer delivery windows.
- Modeling will also identify the right number of transportation assets and where to domicile these assets. Companies should simulate routing strategies (carriers, dedicated contract carriage and company fleets) and define costs and service levels.
- Transportation model tools determine the cost and service effect of supply chain changes as they occur.
- Use a Transportation Management System (TMS) to manage, control and measure all of the transportation methods and modes you use in your supply chain.
- Truck and tractor-trailer utilization study – if you operate a fleet, whether it is leased or owned right sizing the fleet periodically affects your bottom line.
- Routing optimization – reduce miles, improve driver productivity and fuel consumed.
- A fresh look at the type of equipment you are operating to see if different equipment configurations can increase your payloads.
- Improve truck or trailer loading of your equipment or that of your carriers that load up at your distribution centers to better utilize trailer cube and increase payload.
