Some companies are failing to react swiftly enough to the seismic changes occurring in supply chains, while their competitors are seizing the opportunity that the market is presenting to agile suppliers that can react fastest. This article investigates the challenges in sourcing that are acting as brakes on progress -- and introduces the changes required to hit the accelerator.
When a product needs to be shipped, there are often many people in an organization that first need to know if there are current contracted rates for the desired mode, origin, destination, and container size. While this might seem like a simple task, there are challenges in getting reliable rate information.
For example, this task might involve emails, phone calls, or locating a spreadsheet on the company share drive. If you are lucky enough to have a database to search, your search criteria often have to be exact and you might not know how the data was loaded (e.g. NYC, New York City, New York).
If you are willing to consider shipping from a nearby contracted lane, you would have to manually identify and search for nearby geographic combinations. Once you finally find (or don’t find) a rate, you might be questioning the accuracy of your findings. Did someone forget to update the spreadsheet? Do these data include the many rogue spot bid results? And if simply finding the latest rate is not time-consuming enough, what happens if there are no current rates for a lane?
Some will resort to load boards, brokers, or calling carriers for a few quotes. Most will bypass the use of any e-sourcing tool as it’s just too much work for such a small spend amount. Even finding the right carriers for the geographic areas and/or equipment type can be quite a task; choosing the wrong carrier can introduce risk as well. The end result is that a single spot bid has required hours of undesirable work for your employees that would much better be spent on more strategic projects and carrier relations.
This manual process also leaves hard savings on the table for many reasons that will be discussed later. With some organizations conducting hundreds if not thousands of spot bids a year, the cumulative time, cost, and service level sacrifices are quite staggering. A better way is to automate much of this effort.
Keelvar makes it easy to find existing rates in seconds using Fulfillment Optimizer, a live digital rate card that stores all of your rates across all modes. These rates can be pulled from the results of your large sourcing events, spot bids, or other system providing a single source of truth. It is fully integrated with Keelvar’s Sourcing Optimizer and our intelligent sourcing bots.
Fulfillment Optimizer is often broadly deployed throughout an organization for those that might need to search for the details associated with a contracted lane. Searching for a lane is as simple as typing in the origin and destination.
The flexible searching allows for cities, port codes, and other geographic identifiers to be entered and exact spelling and/or matching is not required. If there are rates available, the user can view the contract details. Fulfillment Optimizer can also provide nearby locations for consideration.
If no rates are available the user can request a rate with a few clicks, which will trigger a bot to do all of the leg work that includes:
· Creating a spot bid for the lane(s)
· Finding the right carriers to invite to participate
· Figuring out how many carriers to invite
· Monitoring the bid and providing carriers real-time bid feedback
· Recommending award based on price and non-price factors
· Communicating award to the carriers
· Updating Fulfillment Optimizer with the newly awarded rate
In the end, Keelvar has eliminated up to 90% of the manual spot bid effort. The bot secures better rates, ensures service level thresholds, mitigates risk, and can include many non-price factors in its award decision. These factors might also include sustainability initiatives, carrier KPIs, and transit time. Current customers using Fulfillment Optimizer and intelligent automation are realizing substantial hard dollar and soft savings that quickly justify the investment.
In summary, disruptions to the global supply chain have shown time and time again that speed and agility are crucial ingredients to keep businesses moving forward. Procurement organizations are facing increasing complexity on all fronts, and the ones that have hit the accelerator and scaled-up their sourcing processes today will be the ones seeing the most significant results in the frenetic markets of tomorrow.
Fulfillment Optimizer integrates with Keelvar’s Sourcing Optimizer to capture rates from the full spectrum of sourcing events, and it works with our Intelligent Sourcing Automation products to trigger events when new rates are needed. For a demo of our products, contact us here.