Earlier this year we released our eBook Managing Your Transportation from the Inside Out: How to Create a Transportation Spend Management Plan. We’ve gotten a ton of positive comments about the eBook because it illustrates what can happen when shippers start to manage their freight from the “Inside Out” versus “Outside In.”
This eBook has also led to some great discussions with shippers and elicited some interesting questions. Perhaps the most frequently asked questions are: “Tell me what you mean by managing freight from the inside out?" or “Can you give me some examples of what this might look like?"
Managing from the inside out begins by focusing on the policies, practices, and decisions that your company can control. Your company is making decisions that create the demand for freight within your organization. And the impact of these decisions are reflected in your procurement practices, operational capabilities, and sales processes. All of these areas have an impact on your freight costs.
Companies that manage from the outside in tend to be transaction focused and try to manage their freight spend by getting lower rates from the carriers. The problem with this external focus is that shippers can’t control what happens with carrier rates because these rates fluctuate based on market conditions. In 2018, rates went through the roof. In 2019, truckload rates have come down. Wouldn’t it be better to manage your transportation spend by addressing the factors you can control?
The eBook has some examples that address the “What might this look like?” question. And in some of my talks, I share stories that illustrate what an Inside Out orientation looks like. For example, implementing an Inbound Transportation/Compliance Management Program can be an effective cost saving tool. Addressing inventory deployment issues can reduce things like intra-company transfers or shipments from more costly locations. And when you look at how fill rates affect LTL costs, or how sales order policies can affect your outbound freight costs, you gain an appreciation for the benefits of an Inside Out orientation.
Why are we so passionate about this? Because we’re committed to helping shippers function at their highest level. And we know that an Inside Out freight orientation can help achieve that goal.
And if you still have questions about what that might look like for your organization, why not consider looking at our Rapid Assessment Tool. It has proven to be an effective way to shine a light on the Inside Out orientation issues that you’ll want to address in order to effectively manage your transportation spend.
We encourage you to download the eBook to learn more. And we’d welcome your thoughts and questions about managing from the inside out.
Transportation management gets more complicated with each passing day. If you could use help with creating a plan or anything else, we encourage you to get in touch.
