JDA Helps Address Complex Transportation Management Needs

Even though transportation costs have declined in recent months, transportation managers still face added pressure to streamline the time-consuming and cumbersome tasks associated with strategically sourcing transportation services and capacity from carriers, third-party logistics providers and other providers.

Gartner Research states that “while transportation costs have abated, the importance of effectively managing transportation is as strong as ever. Even with the weak economic climate, Gartner finds strong interest in transportation-focused technologies, particularly those that target costs such as multimodal transportation management systems.”

For this reason, many companies looking to cut costs, improve operational efficiency and positively impact bottom-line performance are transitioning to more efficient, automated methods for transportation sourcing.

“In today’s competitive environment, companies must rapidly complete the transportation procurement cycle in order to lock in rates and capacity, as well as ensure shipments are consistently delivered on time and within reduced cycle windows,” said David Johnston, senior VP, manufacturing and wholesale distribution, JDA Software. “Time and money spent on daily planning and execution are wasted if the supporting rates and commitments are not current or improperly monitored.”

While advanced logistics sourcing is well positioned to optimize the transportation procurement lifecycle, companies should be discriminating when selecting a solution. The key capabilities that should be evaluated to ensure that true ROI is delivered include:

- Initial Bid Execution and Analysis: Web-based solutions provide a community for gathering lane, price and capacity information, as well as executing bids with logistics providers. After receiving bids, shippers can efficiently evaluate, rationalize and optimize those bids to intelligently choose providers based on cost, service and business preferences. Once the ideal scenario has been determined, shippers can provide a collaborative framework for rate adjustment and negotiation of logistics contract terms. As a result, workflows can be catered to the company’s business process, ensuring a streamlined and automated contract negotiation process.

- Contract Negotiation, Execution & Integration: A truly comprehensive solution will enable a collaborative framework for key stakeholders to participate in the entire contract negotiation lifecycle – from draft preview, approval, in progress, amendment requested and final approval. Once negotiations are finalized, next-generation solutions automate the sometimes tedious process of contract execution – creating re-usable contract templates, digitizing signatures and securely storing contracts – freeing up employees’ time to focus on more critical tasks. Finally, if the data obtained throughout the procurement lifecycle is not properly integrated into daily business operations, the value of newly negotiated contracts can be delayed. An ideal solution will offer an entirely closed loop process, including the critical step of integrating data obtained – such as selected rates and capacity commitments – into the daily planning and execution of the transportation management system.

- Ongoing Support: The need to adjust transportation and logistics rates arises when there are increases or decreases requested by the service provider, unanticipated network changes or the addition of new lanes or volume fluctuations. Advanced logistics solutions allow shippers to administer all rate adjustments through the same collaborative framework used to manage and administer their original transportation contracts. Contract amendments will be automatically created and executed, and rate adjustments will be seamlessly integrated into the planning and execution environment.

- Flexibility to Address Today’s Complex Transportation Needs: In assessing a logistics sourcing solution, executives must be sure that it can address the complexities of both their domestic and global transportation networks. Advanced sourcing solutions provide the tools and components to handle the numerous requirements for procuring, optimizing and administering transportation and logistics contracts. The ideal solution should address issues such as standardization across multiple modes, seasonality and spikes in demand, around-the-clock access and flexible bid configuration.

During each phase of the transportation contract management lifecycle, an advanced logistics sourcing solution provides valuable operational advantages and helps shippers to keep pace with the constantly changing market. These solutions benefit shippers and carriers alike, offering a win-win solution to the long-standing problem of lowering transportation costs while providing consistent deliveries with the optimal number of suppliers.

JDA, www.jda.com