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On the final day of enVista’s FUEL 2018 Conference, Adrian Gonzalez, President of Adelante SCM explained that in order to compete in the ever-changing logistics environment, the best thing companies can do is define their own competitive weapon.

Amazon’s killer weapon? Amazon Prime. According to Gonzalez, Amazon Prime members spend on average about $600 more per year than non-members. Gonzalez pointed to Amazon for the way in which customer expectations have begun shaping the supply chain.

The 2017 Third Party Logistics Study also found that 73% of shipper respondents indicated the importance of meaningful involvement of 3PLs in processes relating to supply chain transformation, with 9% suggesting significant involvement, 28% significant involvement and 36% advisory involvement. “Users and providers agreed that 3PLs could be of assistance with their 3PL industry knowledge, supply chain experience, and shipper industry knowledge.”

Looking ahead, “cost management remains important, but that’s not a growth strategy,” Gonzalez said, explaining that it tends to take a back seat to quality, efficiency, safety, customer satisfaction, and innovation.

As companies begin to prioritize logistics, Gonzalez shared five tips to make the transition as smooth as possible:

Put customers at the center of the supply chain universe.

“There are many ways to center a business. You can be competitor focused, you can be product focused, you can be technology focused, you can be business model focused, and there are more. But in my view, obsessive customer focus is by far the most protective of Day 1 vitality” —Jeff Bezos, CEO of Amazon, in his 2016 letter to shareholders.

Link logistics to strategy and business plans

Provide supply chain and logistics a seat at the C-Suite table

Having a knowledgeable and experienced executive in the C-Suite who can link the value and role of supply chain management to the company’s strategy and business plan is critically important.

Improve logistics and sales collaboration

“Our ability to respond quickly and effectively to fluctuations in demand, adjust order sizes and delivery frequency as required, and provide timely and accurate visibility to orders, inventory, and other metrics are all competitive weapons. Let’s use them to our advantage!”—VP of logistics for a large food manufacturer.

Change the mindset on business relationships

In today’s rapidly evolving world, business relationships based on an outdated ‘win-lose’ mentality won’t withstand a market that demands constant change and adaptation. Only by focusing on ‘win-win’ relationships can companies drive innovation and increase their competitive edge.

Stop shoveling snow with a dustpan

Yesterday’s supply chain tools and processes take more time, more effort, and aren’t as user friendly and effective—and they’re becoming today’s dustpans. They might look the same, but they won’t work for what you need, Gonzalez explained.

With these points in mind, the challenge then becomes learning to walk the talk, according to Gonzalez.

Gonzalez quoted Michael Eskew, former chairman and CEO of UPS who noted at the CSCMP Annual Conference in 2002 that there’s been a “dynamic shift in the relationship between business plans and logistics, a shift from the perception of our industry as a back-end process to a front-end strategy that informs and supports your entire business plan.” Ultimately, “your supply chain strategy in effect becomes your business plan,” Eskew said.

Gonzalez encouraged attendees to look to software, social networking, and B2B connectivity to find supply chain innovation.

“The bottom line is that the clock speeds of every industry are accelerating, and what got you here won’t get you where you need to be. To become a company of tomorrow, you have to unlearn ‘the way we’ve always done things’ with respect to yesterday’s processes, technologies, and business models,” Gonzalez concluded.

Advances in technology, increasing globalization, and the growth of e-commerce are upending the traditional freight bill audit and payment industry. Most notably, the hard savings from credit recovery or adjustments identified in the audit process, while still essential, no longer are enough to meet many clients’ needs. “That’s just table stakes,” says Dave Wedekind, senior director, global operations with Indianapolis-based enVista, a global consulting and software solutions firm focused on optimizing supply chain efficiencies. “Clients are looking to glean additional value from the audit and payment processes.”

The invoice and other documents that are part of the freight payment process can offer valuable insight into the financial impact of transportation within the organization’s supply chain. Freight payment and audit solutions providers offer analytical tools that help companies leverage this data to develop strategies to better manage their supply chains.

For many companies, a finely tuned supply chain has become an essential competitive tool. They leverage data from the freight audit and payment process to avoid unfavorable hits to their bottom lines, and to unlock working capital, either through improved operational efficiencies or improved cash flow, says Jeff Pape, senior vice president, head of product and marketing for global transportation with U.S. Bank.

BRINGING THE TEAMS TOGETHER
Another shift is “the push for cross-collaboration between a company’s logistics, finance, sourcing, and marketing teams,” says Hannah Testani, chief operating officer with Intelligent Audit, a freight audit and payment company. These groups work together to understand the insights transportation data can provide, such as market penetration, budgeted versus landed costs, and the profitability of shipping certain items or SKUs, among other factors.

And, as more shippers operate around the globe, they can wind up with silos of disparate freight bill information. Many look to their freight bill audit and payment providers to bring this information together, so they can make better sense of it and even leverage it to reduce costs or better manage their supply chains.

Also of concern to many shippers are increases in assessorial charges for additional services, such as special handling requests. “We’re seeing more complex pricing structures and increases in those costs,” says Nick Fisher, director of sales with AR Traffic Consultants. The freight audit process can help companies keep tabs on these costs.

E-COMMERCE’S GROWING IMPACT
In addition, the growth of e-commerce impacts both shippers and freight bill audit and payment providers in several ways. More companies are focusing on small-parcel shipments, which often had been the least managed mode. “Everyone knows their truckload and LTL spend, but parcel often falls to the side,” says Sarah Eggleston, director, national sales with Sunset Transportation.

Another shift resulting from the proliferation of e-commerce shipments is the growth in volume LTL ratings, says Brian Thompson, chief commercial officer with SMC³, a less-than-truckload (LTL) data and solutions provider. Given a tight market, more shippers will start looking to volume LTL as another transportation option, he says.

More numerous e-commerce transactions also prompt shippers to look to third-party providers to offer electronic invoice processing alternatives, says Kristy Brown, vice president, freight payment operations with CTSI-Global, a provider of world-class supply chain solutions. While ANSI X12 EDI standards remain prevalent, more freight audit and payment providers allow carriers that aren’t EDI capable to submit bills via spreadsheets. Many also allow them to upload invoices through a web portal or send them via email, to be read with optical character recognition.

And, just as technology is changing numerous other industries, it’s impacting the freight payment and audit market. For instance, many providers are preparing for greater use of blockchain technology (see sidebar, page 110).

Shippers looking for experts who can not only audit, analyze, and process their freight bills, but also leverage analytical data to improve supply chain management can turn to a range of firms, including these market leaders: