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Is That A Blue Unicorn In The Garden?

By Art van Bodegraven | 04/27/2016 | 1:14 PM

Now that the reality of the drivers of cost in transportation are grimly settling in as a new normal, much belated attention is being paid to knee-jerk actions designed to control costs.

Look, only those who believe that anything 80 proof is one of the FDA's basic food groups are going to turn to last century's common sense should-have-been-done-long-ago solutions to this century's newer, more potent, challenges to profitability.

One of the trade publications recently pandered to the slightly dim practitioner by characterizing the inexorable forces at work in the industry as "runaway" freight costs. Further, they identify freight costs as the single greatest cost component in the supply chain. No stuff, Sherlock.

Here are their solutions.

Improve packaging design. What!? This hasn't been done already?

Maximize cube utilization. Dude, what did you think that optimization software was for? Full employment for the IT staff?

Centralize transportation procurement. Or continue letting the janitor in a remote facility make plans, carrier portfolio definition, and load assignment? Really?

Control inbound freight. Like should have been done thirty years ago. Shift modes. Hello, intermodal knocking. Anybody home? Dang, there goes that annoying train whistle again.

Use a TMS. Too much trouble? Costs money? Owners happy with what was saved by not going that route?

Become a shipper of choice to attract drivers and gain favorable position in tight capacity markets. A little late, don't you think, to mount a multi-year campaign to become something you've never been.

Use 3PLs. Surprise! They might not have all the answers you haven't come up with, especially when you try to beat them down on a commodity pricing level.

News flash! If these are what you haven't done years ago, you may be too late to save yourself. And, handing off all of your problems and expectations to a third party. Maybe, just maybe, you need to recognize that huge cost challenges will remain even if you do the easy fixes - and figure out how you are going to deal with the longer term implications and complexities, building them into your pricing structure and communicating with your customers.

Nope, that was not a unicorn - just a passing Best Buy truck.



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About Art van Bodegraven

Art van Bodegraven

Art van Bodegraven (1939 - 2017) was Managing Principal of the van Bodegraven Associates consultancy and Founding Principal of Discovery Executive Services, which develops and delivers supply chain educational programs. He was formerly Chair of the Supply Chain Group AG, Partner at The Progress Group LLC, Development Executive at CSCMP, Practice Leader with S4 Consulting, and a Managing Director in Coopers & Lybrand's consulting practice. Concentrating in supply chain management and logistics for over 20 years in his 50+ year business career, he has led ground-breaking strategic, operational, and educational projects for leading US and global clients. Art was principal co-author of DC Velocity's Basic Training monthly column for a decade, and was the principal co-author, with Ken Ackerman, of Fundamentals of Supply Chain Management, the definitive primer in the field. His popular blog, The Art of Art, has been a staple of DC Velocity's web site since its inception.


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