April 2017 | Sponsored | Thought Leaders

Can Exception Management be Automated?

Tags: Transportation Management Systems (TMS), Transportation, Logistics, Technology , Audit Services, Supply Chain

Rainier Tauchert is Implementation Manager, UltraShipTMS, 800-731-7512

Q: Managing exceptions in freight settlement is, by definition, a manual process even when a shipper has a transportation management system (TMS) and freight payment/audit solution in place. Why can't exception management be automated?

A: The truth is, it can be, and to a surprisingly high degree. Significant exceptions such as large discrepancies in rates will always require manual intervention. But UltraShipTMS has perfected "tolerances & allowances" strategies and features that automate the process of identifying and screening out trivial exceptions, significantly paring back the volume of exceptions requiring manual intervention.

Q: How does this "tolerances & allowances" strategy automate exception management?

A: It allows invoices exceeding the approved cost figure—up to a specified dollar amount or percentage of the overall invoice—to pass through the TMS to settlement without triggering an exception. Customers set the amount of "wiggle room" allowed above the approved cost.

For example, a shipper can opt to allow the automatic approval/payment of invoices up to say, $50 above the approved rate. When there's an unexpected cost of less than $50 encountered during shipment —an entrance fee, stop charge, toll, etc.—these small overages pass through without triggering an exception requiring managers to manually review and approve.

Q: Do the tolerances and allowances have to be applied uniformly to all types of charges and to carriers across all lanes?

A: No. The potential charge types and line items are all captured during system implementation so they can be configured to appear in drop-down menus in the freight payment module of the TMS. Tolerances can be assigned by carrier, by lane and by line item. Allowances can also be applied to any or all carriers across any or all lanes.

It takes a bit of configuration at the outset, but it is worth the effort to boost automation levels with respect to exceptions.

Q: What does success look like when it comes to automating exceptions?

A: Our goal is to attain automation of 90 percent or better when it comes to freight invoice exceptions. In the programs where we've been able to achieve this, managers are freed from spending hours managing trivial exceptions. As a result, they have more bandwidth to focus on strategic activities and planning, and they're able to raise overall efficiency and efficacy of their TMS initiative. 






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