September 2016 | Sponsored | Thought Leaders

Optimizing Your Supply Chain

Tags: Legislation, Public Policy, and Regulations, Freight Payment Services, Logistics, Technology , Supply Chain

Rick Erickson is Global Director of Freight Payment Solutions, U.S. Bank, 866-274-5898

Q: How can today's manufacturers deal with increasing regulations, demand volatility, and shifting global trade currents?

A: While supply chain managers work diligently to design and oversee extended supply chains, one aspect that often falls through the "operational cracks" is supporting the corresponding financial supply chain. Orchestrating the end-to-end cash flow velocity and supporting transactions are critical to improve working capital, reduce risk, and enhance margins and efficiencies.

Organizations need visibility into the transactions, cost drivers, and results of the financial supply chain. Automated freight payment and audit can provide that.

Q: What trends do you see most impacting companies?

A: The shift in direct-to-consumer shipping is increasing costs and driving change in the industry. According to a recent report from the Aberdeen Group, 61% of companies are shipping direct to the customer. This was less than 50% two years ago.

This results in increased parcel shipments, which are significantly more expensive than bulk freight. Our customers are looking for a way to avoid an unfavorable hit to their bottom line, and they are turning to their freight payment process to unlock working capital through improved operational efficiencies and improved cash flow.

Q: How has the demand for data changed given this new pressure on supply chains?

A: Customers are demanding more from the data we collect. Through ad hoc customer requests and continuous improvements to our reporting suite, we are delivering more value through enhanced business intelligence solutions.

Our freight payment reporting tools support landed cost calculations with the ability to measure freight costs at the product level. Because of the significant impact of transportation cost on the supply chain—and the company's bottom line—it must be measurable at a very detailed level in order to be managed effectively and optimized successfully.

Q: When it comes to technology, security is a big concern. What can companies do to assure that their data is protected?

A: While technology drives efficiencies and can revolutionize an industry, it can also leave organizations vulnerable to cybercrime. It's important for organizations to take a critical look at how the parties in their supply chain handle and store the data they have access to and how they transmit it.

Fraud and information security are an ongoing concern as hackers and cyberterrorists become savvier. Freight bills contain information that is often competitively sensitive. If that were to be compromised, it could cause a major disruption in an organization's business.

That's why U.S. Bank Freight Payment goes beyond basic information security by meeting the rigorous regulatory, audit, and compliance requirements of the financial industry and maintaining the highest level of data center availability and performance.