Do Your Logistics Problems Need a Consultant?

By Shannon Vaillancourt | 06/02/2017 | 7:38 AM

Every company has logistics problems. The most common problem that I hear companies want to solve is understanding how compliant they are with their own routing guide. This includes both outbound and inbound freight. The second most common problem is looking for ways to cut their freight cost.

Many companies will try to solve their logistics problems internally, but for a variety of reasons, they never quite get solved completely. Not surprisingly, the two most common problems that never quite get solved with internal resources, are the same as above.

If you are facing these problems within your company, it is time to find a consultant.

Stale, Incomplete Data Is a Problem in Problem Solving

What keeps shippers from solving these problems? Usually it’s the data. Many times, the shipper goes to their IT department to get the data they need to run an analysis to find out how compliant they are or to look for strategies to lower their spend. The data IT provides is typically stale and no longer relevant (months behind), or it has to be cleansed because a large portion of the data is not accurate, so it is removed. This always leaves the shipper with a partial view of their current reality which often mutes the extent of any opportunity to actually solve the problem.

If you find yourself working with data that is stale or incomplete, you can neither accurately diagnose or solve the problem. It’s time to find a consultant.

Consequences of Not Solving Problems

While there is a cost of bringing outside resources on board, the cost of not solving these problems or of solving the wrong problem can be significantly higher.

For example, a routing guide compliance problem could present itself as a carrier billing issue. Say a particular lane should have its freight hauled by carrier A, but instead, carrier B is used. When the freight invoice from carrier B is received, the shipper may have an exception in their payment process because they don’t have a rate for carrier B. Instead of solving the real problem—wrong carrier used to haul the freight—the shipper gets approval on the freight invoice to pay the carrier. This problem can cost a shipper an additional 5% to 10% in freight, which can equate to a few hundred thousand dollars, or even a few million dollars depending on the volume of freight moving down a particular lane.

Three Questions to Evaluate Logistics Software

This type of problem, and the inability to accurately diagnose or solve the real underlying problem, is typically caused by not having three things: 1) standardized data, 2) relevant data, and 3) insight. These are three things that a consultant should be able to provide.

Of course, a consultant is only as successful as the logistics software that is used. The most important questions to ask when evaluating a consultant’s software is how will their software provide these three things:

  1. Standardized data—how is the data going to be standardized and cleansed? The answer should be no data will be removed and any non-standard data will be fixed so as to ensure a complete picture.

  2. Relevant data—how close to real-time is the data going to be? The answer should be near real-time with data being presented within 24 hours. The sooner you see a problem, the easier it is to fix, and the greater the value.

  3. Insight—how actionable will the data be? The answer should be there will be alerts telling you in real-time when something is happening right now that needs attention, and analytics should tell you why it happened.

There is a fourth question that should be asked of the consultant. Are you going to talk the shipper out of doing anything? To this the answer should be, “No, the data will drive all the decisions.” There should be no need for a consultant to have to convince a shipper to do anything, because the data will reveal the solution. A consultant’s job is to help the shipper obtain standardized, relevant data and provide insight to interpret the data. As I wrote in my last blog, the consultant should be enhancing your ideas to take them from good to great, and the software should allow you to do this quickly and easily. This type of collaboration will allow you to improve outcomes and leverage your logistics as a competitive advantage.

Five Traits to Look for When Choosing a Logistics Consultant

By Shannon Vaillancourt | 05/05/2017 | 12:38 PM

Shippers continually face challenges, some of which seem to resist resolution. Oftentimes bringing an experienced logistics consultant onboard provides a different perspective, just what is needed to overcome a particular challenge. However, before committing to a logistics solution to support your in-house logistics, look for these five traits when choosing a logistics consultant.

In-house Software Offers More Customization than 3PLs

First, it is important to understand the differences between managing logistics in-house with consulting and software support, or outsourcing to a 3PL. Engaging a logistics consultant with software tools deployed in-house can provide shippers many advantages over a 3PL. The logistics consultant provides additional intellectual horsepower that many shippers think they are getting from a 3PL, but usually are not. Coupling the logistics consultant with in-house logistics management allows a shipper to leverage logistics as a competitive advantage. By controlling the way the software is deployed, it can be tailored to their exact needs.

Using a 3PL instead of software deployed in-house often results in a shipper receiving about 80% of what they really need. Because a 3PL is built to serve a wide range of customers, they are not quite able to truly customize their service to fully meet a shipper’s needs. So challenges never quite get completely resolved; strategies never quite work as expected. What it comes down to is shippers need to take control of their logistics, but in a more agile way. This leads to innovation and this innovation is what creates competitive advantage.

Take Control of Your Logistics

A logistics consultant guides the shipper to take full control of their logistics by selecting and deploying the right software. When choosing the provider, the first step is to talk with them to see if they understand what you are trying to accomplish. They should be able to show you real-word examples of solutions they have created for the problems that you have. RFPs and canned presentations don’t provide enough detail to see if the provider can deliver the solution you’re looking for, or rather the solution that will allow you to overcome the challenge at hand. Many shippers have told me that they’ve never seen a system fail in a PowerPoint presentation. Discussing actual scenarios and how solutions were implemented are invaluable during your selection process.

Five Traits to Look for When Choosing a Logistics Consultant

Here are five traits to consider as you evaluate potential logistics consultants and software providers.

  1. Good Listener
    Is the logistics consultant really listening to the shipper or are they only good at listening to their own voice?
  2. Transparency
    The consultant should be backing up all of their recommendations with cold hard facts that can be verified by the shipper.
  3. Directness
    The logistics consultant should have very clear recommendations. The old adage “the customer is always right” does not apply here. Sometimes the customer is wrong. The logistics consultant must ask the right questions to truly understand the problem to ensure their recommendation will solve the underlying problem, and not just a symptom.
  4. Real Solutions
    Does the logistics consultant have more than ideas? Do they have software solutions that can be implemented to solve the problem at hand?
  5. Technical
    Does the consultant own the IP for their software solutions, or are they using another company’s canned software? Customized solutions cannot be obtained with software that cannot be customized.

A warning sign that your problems will not be solved with a particular provider is when the consultant or software (or both) is too formulaic, too standardized, or lacks flexibility. If it feels like you are always trying to fit a square peg in a round hole, this is not a fit. You shouldn’t have to adapt your business to what the consultant is saying, or how the software works. Instead, the consultant should be enhancing your ideas to take them from good to great, and the software should allow you to do this quickly and easily. This type of collaboration will allow you to improve outcomes and leverage your logistics as a competitive advantage.

The opinions expressed herein are those solely of the participants, and do not necessarily represent the views of Agile Business Media, LLC., its properties or its employees.

About Shannon Vaillancourt

Shannon Vaillancourt

Shannon Vaillancourt, president and founder of RateLinx, is a thought-leader and speaker on customized logistics management software and consulting. Since launching the company in 2002, Shannon and his team have helped shippers solve their most stubborn logistics challenges. The RateLinx solution standardizes order, shipment, invoice, and track & trace data into one dataset to allow shippers to procure, process and pay less for freight. Without internal IT support, RateLinx integrates with any ERP/WMS/TMS leveraging big data and providing analytics for increased visibility to solve freight management problems with actionable Integrated Shipping IntelligenceSM.



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