1 / 16

Managing Inbound Freight Costs Loette D. King, CPSM, CPSD

Managing Inbound Freight Costs Loette D. King, CPSM, CPSD. Topics. Why Consider Inbound Freight? Preparation The Outsource or In-House Decision Choosing a Partner Case Study – Emory University. Why Consider Inbound Freight?. Too often, Inbound Freight Costs are not controlled

milo
Download Presentation

Managing Inbound Freight Costs Loette D. King, CPSM, CPSD

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Managing Inbound Freight CostsLoette D. King, CPSM, CPSD

  2. Topics • Why Consider Inbound Freight? • Preparation • The Outsource or In-House Decision • Choosing a Partner • Case Study – Emory University

  3. Why Consider Inbound Freight? • Too often, Inbound Freight Costs are not controlled • Some suppliers utilize freight as a revenue center • Some suppliers pass along the actual cost – but is the cost high or low? • One of the most overlooked areas for significant cost reductions • Any savings in inbound freight costs provides additional funds for research or operations

  4. Preparation • Review existing charges • Evaluate your potential opportunity • Determine which suppliers are best suited for the program • Federal Grant Concerns • Departmental Concerns • Accounting Systems

  5. The Outsource or In-House Decision • Inbound Freight Management can require intensive administration, including • supplier setup and follow-up • ensuring correct billing • customer communication • In-House freight management eliminates Provider fees, but requires significant internal resources • Outsourcing removes the operational burden of program management

  6. Choosing a Partner • Determine your Expectations • System integrations (e-Procurement and ERP) • Assistance with communication • Interaction with the suppliers during enablement • Follow through with unmatched charges • Available reporting • Due diligence • Your level of control during implementation • Check with your Preferred Carriers

  7. Case Study – Emory University Finding A Program To Meet Our Needs • Implementing a freight management program needed to be simple and require a small investment of our time. • We also had the following special requirements in order for us to commit to a specific Provider: • Process must work with our e-Procurement and financial platforms • Billing must be linked back to the accounting provided on the PO • Data must be provided in a manner which allows our customers to easily track their shipping costs • Reporting which allows for monitoring of the program as well as internal analysis

  8. Case Study – Emory University Implementation Process • Rollout began in Fall 2012. • The first phase included 12 suppliers and lasted 4 months. • Our Provider contacted the suppliers with the pre-approved communication tools • Customer communication • Monitoring of savings

  9. Case Study – Emory University Communication • Our provider supplied recommended drafts of supplier and customer communication, which were tailored to meet our needs. • Customer communication was further customized to include information on how customers could view their shipping charges for each PO. • Communication was posted on our website and presented to various campus groups.

  10. Case Study – Emory University Cautiously Widening Our Scope • Following the initial success of the first phase of implementation, we expanded to include to suppliers with preexisting agreements with our provider. • One year into the program, Emory had enabled 230 suppliers, capturing over $260k in savings . • On March 7th, we began enabling our entire supplier base into the program.

  11. Case Study – Emory University The Trends

  12. Case Study – Emory University The Numbers

  13. Case Study – Emory University Moving Forward Into Full Implementation • In March 2014, we began enabling our entire supplier base into the program. • We needed to make some changes in our processes • Send a list of all of our suppliers to our provider • Send data related to every PO and invoice to our provider • Update shipping instructions associated with all of our POs

  14. Case Study – Emory University PO Shipping Instructions If non-negotiated freight charges apply, ship via FedEx and bill third party to FedEx Account # XXXXXXX and insert PO# in Recipient 2nd Address field. For free freight and LTL shipments, please use your preferred carrier.

  15. Case Study – Emory UniversityThe Results • Significant savings for the university • Emory has maintained a conservative estimate of $22 savings per PO. • The most conservative overall savings exceeds $260k for a very small portion of our supplier base. • No negative feedback from customers • Strong Strategic Partnership with our Provider and our Shipper • Considering expanding to LTL shipments

  16. Questions? Loette D. King 404-727-0909 loette.king@emory.edu

More Related