Connect and Collaborate to Better Manage Freight Spend

Q: What are the current challenges of managing freight spend?

A: In today’s slow-growth economic environment, organizations are pressured to reduce costs and manage inventory well. The result is demand for frequent deliveries, which amplifies the need to control shipment costs, according to research by the Aberdeen Group. In addition, organizations operate increasingly complex supply chains that reach around the world.

Many companies have divisions or suppliers—or both—in different countries. That makes managing freight spend and payments challenging, because rules and regulations vary by geography. Frequently, organizations use different local freight audit and payment systems that do not connect to each other or to financial management systems. Only 36 percent of companies have a centralized spend management platform with multi-currency and multilingual capabilities, according to a 2012 study by the Aberdeen Group. This “silo” approach makes controlling freight spend difficult—and the outcomes are costly.


Q: Why are silos a problem?

A: While a silo approach makes sense from a local perspective, it’s a barrier to managing total freight spend. Most global views are a summary of freight spend, yet they lack the detail to analyze freight spend based on supplier or product line across the organization.

For corporations managing freight spend in geographic or divisional silos, putting that analysis together is time-consuming. It is more difficult if each system is not capturing all the data necessary for the analysis—or not capturing it in the same way. Companies waste time and money managing inefficient, disconnected systems.

Q: How can shippers address these issues?

A: Supply chain professionals benefit most from a global solution built for freight spend. But, buyer beware: many providers claim to be global without “feet on the ground” in other regions, or while servicing only one customer in another country.

Only consider solutions that:

  • Connect with true local resources who understand the local regulations and logistics industry.
  • Support your growth with multi-currency and multilingual capabilities.
  • Accommodate local requirements, such as consolidated invoices, value-added taxes, and government-compliant e-invoicing.
  • Provide the right data in the right format by capturing all relevant data and ensuring data harmonization for important information such as currencies.
  • Properly control access to data. While not all users need access to all data, they do need access to the right information—which may include data across several entities for analysis.
  • Efficiently allow access to global reporting and business intelligence.

By seeking a global solution with these attributes, organizations can better manage freight spend, regardless of geographic or divisional boundaries.

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