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2011 Transportation Contract, Tender and Spend Management May 2011 Bob Heaney

2011 Transportation Contract, Tender and Spend Management

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Page 1: 2011 Transportation Contract, Tender and Spend Management

2011 Transportation Contract, Tender and Spend Management

May 2011

Bob Heaney

Page 2: 2011 Transportation Contract, Tender and Spend Management

2011 Transportation Contract, Tender and Spend Management Page 2

© 2011 Aberdeen Group. Telephone: 617 854 5200

Executive Summary Research Benchmark

Aberdeen’s Research Benchmarks provide an in-depth and comprehensive look into process, procedure, methodologies, and technologies with best practice identification and actionable recommendations

In February 2011 Aberdeen conducted a survey involving 174 transportation and procurement professionals. The data reveals that almost 50% of respondents are focused on improving the ability to analyze and automate true freight spend and this report details how Best-in-Class shippers have leveraged transportation spend management solutions together with process improvements to keep costs under control and maintain high levels of carrier and freight performance.

“By outsourcing our audit and payment process we’ve been able to reduce our freight spend by more than $500k. We’ve even reduced our errors down to 12 to 15 last year out of the more than 15,000 bills we pay yearly.”

~ Logistics Manager, Small Manufacturing Firm

Best-in-Class Performance Aberdeen used the following five key performance criteria to distinguish Best-in-Class companies:

• 0.7% decrease vs. last year in baseline freight spend

• 92.8% of carriers are compliant with their contract cost

• 91.9% of carriers are meeting their SLA routing compliance

• 9.2 - average time in days to pay a freight invoice from receipt

• 86.4% of transportation invoices currently audited

www.aberdeen.com Fax: 617 723 7897

Competitive Maturity Assessment Survey results show that the firms enjoying Best-in-Class performance shared several common characteristics versus all others, including:

• 1.88-times as likely to practice incremental bidding between bids

• 1.70-times as likely to centralize transportation spend management

• 1.69-times as likely to electronically audit invoices against rate tables

• 1.50-times as likely to practice multi-round bidding

• 1.41-times as likely to practice online collaboration with carriers

Required Actions In accordance with the specific recommendations in Chapter Three of this report, to achieve Best-in-Class performance, companies must:

• Integrate collaboratively by beginning to improve transportation spend management by automating either contract procurement or freight audit and payment collaboratively

• Complete the spend management loop and increase electronic payments to gain control over spend

• Implement route-based incentives / scorecards - consider community bidding and route-based incentive coupled with benchmarking for even greater reductions in contracted rates

This document is the result of primary research performed by Aberdeen Group. Aberdeen Group's methodologies provide for objective fact-based research and represent the best analysis available at the time of publication. Unless otherwise noted, the entire contents of this publication are copyrighted by Aberdeen Group, Inc. and may not be reproduced, distributed, archived, or transmitted in any form or by any means without prior written consent by Aberdeen Group, Inc.

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© 2011 Aberdeen Group. Telephone: 617 854 5200 www.aberdeen.com Fax: 617 723 7897

Table of Contents Executive Summary....................................................................................................... 2

Best-in-Class Performance..................................................................................... 2 Competitive Maturity Assessment....................................................................... 2 Required Actions...................................................................................................... 2

Chapter One: Benchmarking the Best-in-Class.................................................... 4 Business Context ..................................................................................................... 4 The Maturity Class Framework............................................................................ 5 The Best-in-Class PACE Model ............................................................................ 6 Best-in-Class Strategies........................................................................................... 6

Chapter Two: Benchmarking Requirements for Success................................... 9 Competitive Assessment......................................................................................11 Capabilities and Enablers ......................................................................................13

Chapter Three: Required Actions .........................................................................19 Laggard Steps to Success......................................................................................19 Industry Average Steps to Success ....................................................................19 Best-in-Class Steps to Success ............................................................................19

Appendix A: Research Methodology.....................................................................21 Appendix B: The Closed Loop Transportation Spend Management Process.........................................................................................................................................23 Appendix C: Related Aberdeen Research ...........................................................26

Figures Figure 1: Top Pressures for Improving Transportation Spend Management..4 Figure 2: Top Strategic Actions by Class................................................................. 7 Figure 3: The Best-in-Class Process Capabilities - Track and Bid ...................14 Figure 4: Automated Process Capabilities- Select, Invoice, Pay.......................16 Figure A: The Transportation Closed Loop Process .........................................23 Figure B: Technology Being Leveraged by the Best-in-Class ............................24

Tables Table 1: Top Performers Earn Best-in-Class Status.............................................. 5 Table 2: The Best-in-Class PACE Framework ....................................................... 6 Table 3: The Competitive Framework...................................................................11 Table 4: The PACE Framework Key ......................................................................22 Table 5: The Competitive Framework Key ..........................................................22 Table 6: The Relationship Between PACE and the Competitive Framework.........................................................................................................................................22

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© 2011 Aberdeen Group. Telephone: 617 854 5200

Chapter One: Benchmarking the Best-in-Class

Business Context How the Best-in-Class are Evaluating Freight Rates:

√ 88% compare to competitors rates for pricing

√ 65% utilize community data from peers

√ 50% compare carriers to internal historical pricing

Companies have been managing complex transportation procurement and payment processes for many years - they have been evolving/maturing since the 1980's. Today’s supply chain executive has taken many steps to reduce supply chain costs. A central concern of transportation and supply chain managers, across all ranges of industries and geographies is the control and optimization of transportation costs. However, performance varies widely based on maturity. For example, the Best-in-Class 40% were better than Industry Average, and the Best-in-Class were 180% better than Laggards in tracking total freight cost, i.e., accessorials, fuel charges and invoice dispute cost.

The sudden spike in fuel and other charges caught many organizations by surprise and many organizations lacked sufficient processes to manage the changes effectively. Within the past 12 months, the lack of visibility to actual spend information and the general inflexibility in the typically manual processes have forced many executives to look for better technology and processes to reduce costs.

Figure 1: Top Pressures for Improving Transportation Spend Management

31%

33%

33%

54%

69%

0% 20% 40% 60% 80%

Carrier service-related challenges

Supply chain sourcing complexitydue to increased globalization

Customers demanding faster andmore frequent deliveries

Increasing awareness of the costand service impact of transportation

Volatility of freight costs and/orfuel cost surcharges

Percent of Respondents, n = 174

31%

33%

33%

54%

69%

0% 20% 40% 60% 80%

Carrier service-related challenges

Supply chain sourcing complexitydue to increased globalization

Customers demanding faster andmore frequent deliveries

Increasing awareness of the costand service impact of transportation

Volatility of freight costs and/orfuel cost surcharges

Percent of Respondents, n = 174 Source: Aberdeen Group, April 2011

Not only have rising freight costs and shipping charges forced many executives to panic and throw more resources at solving the problem. More groups within the organization are suddenly seeing the true costs behind transportation and creating mandates to bring freight costs under control.

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© 2011 Aberdeen Group. Telephone: 617 854 5200 www.aberdeen.com Fax: 617 723 7897

As shown in Figure 1, over 50% of the respondents are in a situation where more of the company aware of the cost and service impact of transportation on the overall supply chain. Moreover, these survey respondents are also being faced with the company executives asking for something to be done about it quickly. In fact, 60% are looking for change in the next 12 months.

With these developments many organizations are scrambling to get a better understanding of their transportation spending, i.e., where they are spending the money, and how efficient they are at managing carrier relationships and minimizing costs. This is even more of an issue for industries which have very thin profit margins (like retail, grocery, and consumer durable industries) where operational efficiencies in the distribution process are critical. The biggest problem companies continue to face, despite the availability of technology and solutions, is the lack of visibility into the true level of transportation costs.

The Maturity Class Framework Aberdeen used five key performance criteria to distinguish the Best-in-Class from Industry Average and Laggard organizations. Table I provides companies with a framework to benchmark their performance against the classifications.

Table 1: Top Performers Earn Best-in-Class Status

Definition of Maturity Class Mean Class Performance

Best-in-Class: Top 20%

of aggregate performance scorers

0.7% reduction in their baseline freight spend year over year 92.8% of carriers in compliance to contract total cost requirements 91.9% of carriers meeting their service-level and routing compliance requirements 9.2 days - average time to be able to process and pay a freight invoice 86.4% of transportation invoices currently audited

Industry Average: Middle 50% of aggregate

performance scorers

1.4% increase in their baseline freight spend year over year 78.5% of carriers in compliance to contract total cost requirements 78.8% of carriers meeting their service-level and routing compliance requirements 11.4 days - average time to be able to process and pay a freight invoice 51.1% of transportation invoices currently audited

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© 2011 Aberdeen Group. Telephone: 617 854 5200 www.aberdeen.com Fax: 617 723 7897

Definition of Maturity Class Mean Class Performance

Laggard: Bottom 30% of aggregate

performance scorers

4.4% increase in their baseline freight spend year over year 31.6% of carriers in compliance to contract total cost requirements 52.2% of carriers meeting their service-level and routing compliance requirements 12.8 days - average time to be able to process and pay a freight invoice 27.1% of transportation invoices currently audited

Source: Aberdeen Group, April 2011

The Best-in-Class PACE Model Using technology to achieve corporate goals and improve transportation performance is not an isolated solution it requires a combination of strategic actions, organizational capabilities, and then the proper use of enabling technologies that can be summarized as shown in Table 2.

Table 2: The Best-in-Class PACE Framework

Pressures Actions Capabilities Enablers Volatility of freight costs and/or fuel cost surcharges (e.g., rates, accessories, fuel costs)

Automate data collection and analysis on freight spend and / or updates to rate tables Optimize or automate ability to source and negotiate freight rates and award contracts to the optimal carrier

Expressive carrier bidding (carriers submit alternative bids based on bundling and unbundling of lanes) Practice multi-round bidding Practice electronic invoice presentment and payment with carriers Tracking of total freight cost including accessories (e.g. detention and stop-off charges), fuel charges, and invoice dispute costs Strategic bid allocation based on business performance of carriers

Transportation procurement module of Transportation Management Software (TMS) General Procurement tool used for freight procurement Specialized transportation procurement tool Automated data conversion Spreadsheets for transportation procurement Homegrown / legacy systems for transportation procurement Freight audit and payment module of TMS Specialized freight audit and payment tool

Source: Aberdeen Group, April 2011

Best-in-Class Strategies In response to the key pressure to contain fuel cost and the general need to control overall transportation costs within the extended supply chain (Figure 1), the Best-in-Class are leading the charge in the following areas.

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© 2011 Aberdeen Group. Telephone: 617 854 5200

Figure 2: Top Strategic Actions by Class

29%

15%

31%

40%

21%

28%

36%

40%

32%

38%

38%

47%

0% 20% 40% 60%

Tie transportation, carrier selection, auditand payment together in a single

process

Enforce adherence to our routing guideand / or to convert bid responses to rate

tables

Collaborate and synchronize data withcarriers, suppliers and trading partners

Automate data collection and analysison freight spend and / or updates to rate

tables

Percent of Respondents, n = 174

Best-in-ClassIndustry AverageLaggard

29%

15%

31%

40%

21%

28%

36%

40%

32%

38%

38%

47%

0% 20% 40% 60%

Tie transportation, carrier selection, auditand payment together in a single

process

Enforce adherence to our routing guideand / or to convert bid responses to rate

tables

Collaborate and synchronize data withcarriers, suppliers and trading partners

Automate data collection and analysison freight spend and / or updates to rate

tables

Percent of Respondents, n = 174

Best-in-ClassIndustry AverageLaggard

Source: Aberdeen Group, Month 2011

In Figure 2, almost 50% of respondents focused on improving their ability to analyze and automate true freight spend. In addition to working on improving visibility, survey respondents recognize that visibility isn't enough and are putting processes in place to better utilize spend data and improve/optimize the activities around sourcing and payment. Much of the attention today is around extending data visibility and collaboration with carriers, suppliers and trading partners. The number of trading partners in today's global supply chain is a challenge that every enterprise must face. The key words from the figure above are visibility, collaboration / synchronization, selection / adherence, and "closing the loop" on procurement and payment (the closed-loop process is one we have written about in the past see Appendix B for an illustration of this system). Now, more then ever, Best-in-Class companies are embracing the people, processes and technologies that drive superior results which are needed to address global cost challenges and service requirements.

Recognizing that transportation procurement and transportation payment are unique functions in most companies - this report expands upon these two primary categories at the "front end" and "back end" of transportation spend, highlighting Best-in-Class methods for managing each.

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Aberdeen Insights —Closing the Loop on Transportation Spend

If the last two years has taught us anything it's that visibility into and control of the entire supply chain is critical in fully understanding the true impacts to cost and service in this highly interdependent global supply chain. That focus has suddenly shifted to "closing the loop" on transportation spend. This shift ensures that the actual transportation spend is accounted for in every strategy and every tactical decision made, and is no longer seen as an after-thought.

Understanding the actual spend on transportation, including drilling down to all accessorials and surcharges, is the most important step to bringing transportation spend under control and creating more strategic value. Despite the importance of this information and its impact on the strategic actions behind transportation sourcing and procurement decisions, many organizations continue to run blind. For instance Laggard companies achieved only 31.6% compliance carrier contractual costs versus actual costs and only a 52.2% compliance to services levels (versus a 91% to 92% compliance to both metrics by the Best-in-Class, Table 1).

The entire transportation procurement and payment process relies on information as a valuable input to keep the "closed loop" lifecycle moving. Information collected at each stage (see Appendix B for a fuller description) whether it is regarding freight rates, contract performance metrics, actual cost updates, and payment details are required inputs into each procurement cycle in order to drive service and cost imbalances out of the business.

In many cases today, companies continue to rely on paper-based tracking of this information, or keeping track in spreadsheets. Leveraging technology to track, analyze, and provide visibility to critical transportation spend data. The technology can be a competitive differentiator and lead to reducing costs (more on this in the Technology section).

Transportation and logistics is an ever-changing landscape. Rates and capacities are in a constant state of flux. Managing these highs and lows is critical to sustaining transportation and supply chain costs. Keeping up with the changes and controlling them will become increasingly strategic. Leveraging the technology and processes available will become a necessity.

“Now that we have reduced the non-value add part of the process we can focus more on vendor compliance, payment terms and other activities that continue to drive more bang for the buck from processes; that’s had a significant impact on our entire organization."

~ Chris Cavin, Director of Transportation, RockTenn

In the next chapter, we will see what the top performers are doing to achieve these gains.

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© 2011 Aberdeen Group. Telephone: 617 854 5200

Chapter Two: Benchmarking Requirements for Success

One question explored throughout this report is how the Best-in-Class are embracing automated process to leverage transportation spend management capabilities. As high as 75% of the leading companies (only 45% for Laggards see Table 3) are tracking total freight cost including accessories. These companies are making transportation a strategic part of the supply chain and not a mere afterthought. Some companies have been able to gain visibility into the cost of their transportation spend, focus resources on driving efficiencies, enhance or acquire new skills and insights, and manage through the difficult ebb and flow of the specific cost drivers impacting transportation. These leaders are closing the loop on transportation spend and are better able to tie transportation, carrier selection, audit and payment together in a single process (Figure 2). The Best-in-Class are responding and leading the pack, widening the performance gap, where they are 6.1 percentage points advantaged versus Laggards in their "baseline freight cost" metric, Table 1.

The following case study is an example of how one company has taken control of their transportation spend and managed to turn the corner to become Best-in-Class. This company has turned transportation from a cost center to a competitive differentiator.

Case Study — E-commerce Freight Incentive and Spend Management Services Yield $1 Million in Freight Savings

S&S Activewear is a midsized supplier and distributor of 60 brand name apparel items such as t-shirts and sweatshirts in about 2,000 overall styles. While anyone can order the apparel items the typical buyer is an apparel customizer. The t-shirt customizing shop is the most common example and these shops will order t-shirts by the piece with a typical order comprised of two to three boxes shipping via parcel from a single distribution center located in Chicago. On a typical day this distribution center processes several 100,000 units or about 8,000 cases from orders placed 24 hours a day primarily from the company's e-commerce website. The e-commerce capability has been a channel of growth for the company which has grown over the 15 year period since the company was formed. This has fueled the company's transportation spend, now at $10 to $12 million annually, leading to major restructuring efforts at the company.

"One of the key elements of total delivered cost for our company as well as a competitive differentiator is transportation cost. So a few years ago we began to partner with a Transportation Spend Management (TSM) services company," says Jim Shannon, Controller at S&S Activewear.

continued

"One of the key elements of total delivered cost for our company as well as a competitive differentiator is transportation cost. So a few years ago we began to partner with a Transportation Spend Management (TSM) services company. Overall this new partnership has allowed us to document savings upwards of $1 million off of our freight costs while at the same time improving our reach from the single DC on both one day and two day delivery to 40 states - a threefold increase.”

~ Jim Shannon, Controller

S&S Activewear

Best-in-Class vs. All Others in Knowledge/Performance

√ 1.44-times as likely to practice formal root cause analysis on invoice errors (56% vs. 39%)

√ 1.2-times as likely to support negotiations of 'all in' rates including assesssorials ( 56% vs. 44%)

√ 1.15-times as likely to use incentive-based freight contracts (30% vs. 26%)

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© 2011 Aberdeen Group. Telephone: 617 854 5200 www.aberdeen.com Fax: 617 723 7897

Case Study — E-commerce Freight Incentive and Spend Management Services Yield $1 Million in Freight Savings

"Overall this new partnership has allowed us to document savings upwards of $1 million off of our freight costs while at the same time improving our reach from the single DC on both one day and two day delivery to 40 states - a threefold increase," the Controller goes on to say.

The e-commerce platform allowed the company to increase volume and value to existing customers. "But the website was also a marketing platform that allowed the company to move away from viewing freight as a cost that was passed on to the customer and instead to use the web and our partnership with the TSM services company to restructure our transportation pricing and delivery territory. To provide an incentive we have increased order size and delivery territory by offering free freight on qualifying web orders of $150 or more. This is a market differentiator and cost equalizer to reach new customers and states," said the Controller.

The following key points define the restructuring efforts and the manner in which the TSM service partnership facilitates the order, delivery, confirmation/audit and payment:

• Orders are placed and free freight itemized. Customers can order via an 800 number, email or the web. The new e-commerce platform calculates total cost displaying freight at list rate (but will subtract this as a savings for qualifying orders above the $150 minimum). Based on the destination zip code the carrier (mainly parcel but TL and LTL are used for larger shipments) will be selected and the delivery-to-customer date is determined. Ninety percent (90%) are within one to two days from the date of order.

• Orders are tendered to carriers at the Chicago DC and shipped within 24 hours. The applicable carrier UPS, FedEx or TL/LTL acknowledges pickup and statuses each order by tracking number to the e-commerce system and the real-time SaaS freight/audit system.

• 60% increase in sales volume due to zone skipping support. Based on zip codes aggregated orders to predetermined parcel hubs (in places like Columbus, Kansas City, and as far as Pennsylvania) are batched to allow LTL or TL deliveries. The cost benefit of these mode shifts is rebated back to the company from the applicable carrier and is verified by the TSM system and reports. This strategy has also allowed the company to reach territories in the radius of the hub within a two day customer delivery promise which, without zone skipping support, would have been in three to four day parcel zones. An estimated 60% increase in sales volume was enabled this way.

continued

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© 2011 Aberdeen Group. Telephone: 617 854 5200

Case Study — E-commerce Freight Incentive and Spend Management Services Yield $1 Million in Freight Savings

• 100% freight order tracking and audit service. The SaaS based TSM modules are used to report on volumes tendered to each carrier and mode and to provide daily recaps on all freight shipments according to contractual rates and freight discounts as well as exception management down to specific shipment.

• Real-time transportation spend analytics. The SaaS based TSM modules help insure that the company savings are consistent with the 10% to 15% in bundled freight rate and accessorial discounts that the company and the TMS services firm were able to negotiate during the last, and the future, contracting phase.

"In summary the restructured transportation solution and our partnership with the TSM services firm has enabled our e-commerce strategy to expand and grow our volume and geographic reach. We now have negotiated our baseline freight costs down by over $1 million per year and are able to share these savings and incent customers to place larger orders and enjoy lowest landed cost to their market," concludes the Controller.

Competitive Assessment Aberdeen Group analyzed the aggregated metrics of surveyed companies to determine whether their performance ranked as Best-in-Class, Industry Average, or Laggard. In addition to having common performance levels, each class also shared characteristics in five key categories: (1) process (the approaches they take to execute daily operations); (2) organization (corporate focus and collaboration among stakeholders); (3) knowledge management (contextualizing data and exposing it to key stakeholders); (4) technology (the selection of the appropriate tools and the effective deployment of those tools); and (5) performance management (the ability of the organization to measure its results to improve its business). These characteristics (identified in Table 3) serve as a guideline for best practices, and correlate directly with Best-in-Class performance across the key metrics.

Table 3: The Competitive Framework

Best-in-Class Average Laggards

Practice multi-round bidding

75% 52% 45%

Tracking of total freight cost including accessories (e.g. detention and stop-off charges), fuel charges, and

invoice dispute costs

Process

74% 72% 38%

“We've spent a considerable amount of effort this past year to establish stronger controls in our freight settlement processes. We recognize the need for a more scalable and commercial solution as a next step to support the process reengineering efforts we’ve implemented thus far.”

~ Robert Sliter, Logistics Leader, Owens Corning

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Best-in-Class Average Laggards Practice incremental bidding as requirements change

between bid contracts

62% 35% 34%

Expressive carrier bidding (carriers submit alternative bids based on bundling and unbundling of lanes)

59% 45% 44%

Electronically assisted bid analysis

56% 47% 38%

Strategic bid allocation based on business performance of carriers

Process (cont.)

56% 47% 35%

Allow carriers to suggest alternate routing

56% 51% 29% Centralized transportation spend management

platform in place, capable of multi-language, multi-currency

51% 36% 21% Practice online collaboration with carriers for invoice

exception handling

Organizational

45% 39% 20% Negotiate 'all in' rates with carriers instead of having

separate accessories 56% 48% 35%

Practice formal root cause analysis for repeated invoice errors

56% 45% 28% Use incentive-based freight contracts

Knowledge / Performance Management

30% 26% 25% Practice electronic invoice presentment and payment

with carriers 66% 57% 35%

Automatically audit invoices against electronic rate tables

61% 42% 23% Automated carrier selection based on known data and

rules 51% 43% 38%

Practice online bidding via web portal 44% 41% 40%

OCR for paper to electronic conversion of freight invoices

42% 30% 21% Electronically assisted bid allocation optimization to

award lanes to carriers

Technology Management

41% 34% 24%

How the Best-in-Class are Performing vs. Others

√ 1.88-times as likely to practice incremental bidding as requirements change between bid contracts

√ 1.70-times as likely to centralized transportation spend management platform in place, capable of multi-language, multi-currency

√ 1.69-times as likely to automatically audit invoices against electronic rate tables

√ 1.50-times as likely to practice multi-round bidding

√ 1.44-times as likely to practice formal root cause analysis for repeated invoice errors

√ 1.41-times as likely to practice online collaboration with carriers for invoice exception handling

√ 1.35-times as likely to practice electronic invoice presentment and payment with carriers

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Best-in-Class Average Laggards Electronic routing guides in TMS for day-to-day carrier

selection decisions

54% 38% 34%

Transportation procurement module of Transportation Management Software (TMS)

45% 41% 30%

Specialized freight audit and payment tool

34% 22% 31%

Specialized spend analytics software

Technology Enablers

31% 31% 30%

Source: Aberdeen Group, April 2011

Capabilities and Enablers Based on the findings of the Competitive Framework and interviews with end users, Aberdeen’s analysis of the Best-in-Class demonstrates that it is truly a combination of superior and balanced performance across each of the sections that denotes the overall level of transportation success.

Process - Cost Tracking and Electronic Collaboration Over 70% of the companies, from the Chief Supply Chain Officer Survey, January 2011, indicated that internal/external collaboration was integral to their supply chain strategy. When it comes to process, companies of all classes have begun to harness technology in a collaborative fashion. But the Best-in-Class are doing a superior job, primarily in the area of tendering bids and doing electronic assessments or allocations with their carriers. Figure 3 illustrates some of the process collaboration gaps where the following observations and recommendations can be made.

• Collaborate to obtain and track true cost. Only 38% of the Laggards are tracking actual costs and accessorials. The Best-in-Class and Industry Average track at the 74% and 72% level respectively. Without actual costs, the ability to audit and measure compliance to plan, variances in fuel surcharges and accessorials in particular, cannot be achieved. For those that are tracking these costs, ensure that monitoring is taking place in a collaborative fashion.

• Collaborate and examine bundled and unbundled costs. At 75%, the Best-in-Class are 50% more likely than all others to practice collaborative multi-round bidding. Without this capability it is difficult to secure your best overall rates and to analyze the potential savings of bundling several low volume lanes. Failure to consider bundling these lanes or surcharges into a base contract can cost as much as 15% more for the associated volumes.

• Complete the collaborative bidding cycle: start with selection and end with electronic bid assistance. The Best-in-

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Class are anywhere from 1.2 to 1.9-times as likely as all others to be able to optimize the collaborative bid and selection process -whether performing expressive bidding or strategic carrier allocations or electronically assisting the bid process. Without collaboration at each phase, it is likely that savings will be left behind during transportation execution.

Figure 3: The Best-in-Class Process Capabilities - Track and Bid

35%

38%

44%

34%

38%

45%

47%

47%

45%

35%

72%

52%

56%

56%

59%

62%

74%

75%

0% 20% 40% 60% 80%

Strategic bid allocation based on businessperformance of carriers

Electronically assisted bid analysis

Expressive carrier bidding (carriers submitalternative bids based on bundling and

unbundling of lanes)

Practice incremental bidding as requirementschange between bid contracts

Tracking of total freight cost includingaccessories (e.g. detention and stop-off

charges), fuel charges, and invoice disputecosts

Practice multi-round bidding

Percent of Respondents, n = 174

Best-in-ClassIndustry AverageLaggard

35%

38%

44%

34%

38%

45%

47%

47%

45%

35%

72%

52%

56%

56%

59%

62%

74%

75%

0% 20% 40% 60% 80%

Strategic bid allocation based on businessperformance of carriers

Electronically assisted bid analysis

Expressive carrier bidding (carriers submitalternative bids based on bundling and

unbundling of lanes)

Practice incremental bidding as requirementschange between bid contracts

Tracking of total freight cost includingaccessories (e.g. detention and stop-off

charges), fuel charges, and invoice disputecosts

Practice multi-round bidding

Percent of Respondents, n = 174

Best-in-ClassIndustry AverageLaggard

Source: Aberdeen Group, April 2011

Organization When it comes to organizational capabilities the Best-in-Class are much more likely to organize capability around a centralized transportation platform capable of handling global complexity including multi-lingual and multi-currency functionality (Table 3 under Organization). At 51% the Best-in-Class are more than twice as likely as Laggards to have this capability. This fact is compounded by the increasing globalization of companies, (i.e., more than 85% of all respondents are global). Having a centralized platform to collect and share data across regions divisions and operating silos enables the company to evaluate its extended supply chain and analyze transportation spend management data to streamline its operations. In our study, this was one of the most significant areas for savings opportunities with some companies uncovering as much as 35% in cost savings directly applicable to cross-region optimization initiatives. If a company is not organized in a fashion to centralize this shared data, then they are at a distinct disadvantage in performing periodic strategic and tactical assessments.

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The Best-in-Class are centralized with respect to transportation data but are primarily "managed globally". When compared to all others, Best-in-Class firms are more likely to organize/centralize these two key transportation spend management functions and manage globally:

• 1.65-times as likely to have transportation procurement functionality (61% vs. 37% all others)

• 1.61-times as likely to have freight audit and payment functionality (53% vs. 33% all others)

And finally, in the July 2010 report, International Transportation: Optimize Cost and Service in a Global Market, the advantages of online carrier portals to handle a variety of transportation costs and events were highlighted, and invoicing is no exception. Here again we find that the Best-in-Class at 45% are more than twice as likely as Laggards to have this online portal capability for invoicing (see Table 3, Organization).

Knowledge Management and Performance Management Knowledge is power when it comes to internal and external performance management. A few of the related areas where the Best-in-Class demonstrate superior capabilities ranging from root causes analysis to incentives are found in Table 3.

Laggard companies are only able to accurately report 31% compliance to contractual cost and 52% compliance to service level requirements with their carrier base (Table 1, Pressures). The higher level of success in that the Best-in-Class demonstrate (up to 92% on the same compliance metrics) is directly related to the measurement and performance management skills an organization deploys. Both having actionable metrics and expectations for service/cost as well as measuring carrier performance frequently are central to the success of the Best-in-Class.

Earlier we saw that the Best-in-Class are able to accurately determine their true or actual costs and that Best-in-Class companies have a centralized platform upon which to store shared data and access their transportation spend. In keeping with the closed loop process, it is difficult to perform analytical and exception-based analysis to negotiate or create contract incentives with carriers (Table 3) without having an ability to conduct historical and contractual cost comparisons.

Technology The richness of data required to evaluate plan versus actual cost and perform transportation spend analytics is vast and daunting. It is clear that technology and automation tools are requirements for these efforts to be successful for companies of any scale. The Best-in-Class are more highly automated where they are anywhere from 1.17 to 1.5-times as likely as all others to have each of the technology enablers indicated in the competitive framework (Table 3, Technology Enablers).

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Cost per Freight Invoice Under Automation:

√ $10.98 Best-in-Class

√ $13.94 Industry Average

√ $22.02 Laggard

The Best-in-Class are:

√ Saving $2.96 and $11.04 per invoice vs. Average and Laggards respectively

√ Able to process and pay a freight invoice in 9.2 days or 2 to 3 days more quickly

Large companies need to automate just to keep up with the deluge of shipments. As a result, large companies can experience considerably higher productivity levels among other benefits. The time to payment metric shows that the Best-in-Class are, on average, able to process and pay a freight invoice in 9.2 days or two to three days more quickly than Industry Average and Laggard companies respectively. Automation is also saving them on the average cost to process and invoice, where at $10.98 per invoice they are saving $2.96 and $11.04 per invoice vs. Industry Average and Laggards respectively (see sidebar).

Automated Features: Procurement, Contract/Track and Freight Invoice, Audit and Pay When it comes to software capabilities there are numerous choices for the transportation professional. With ERP and Supply Chain Management suites, complete transportation management systems, and a variety of specialized tools and optimizers, companies have a wide range of options available to automate various aspects of their transportation spend management. In almost every instance, companies that are able to leverage technology to remove the manual components of everyday tasks are able to focus more on delivering value versus entering data. In Figure 4, we have captured some of the key areas where the Best-in-Class have demonstrated more advanced capabilities.

Figure 4: Automated Process Capabilities- Select, Invoice, Pay Laggard Reasons for Not Investing in Technology:

√ 46% up-front costs of solution too high

√ 34% upfront costs of changing processes are too high

√ 26% software integration is too difficult / expensive

21%

40%

38%

23%

35%

30%

41%

43%

42%

57%

42%

44%

51%

61%

66%

0% 20% 40% 60% 80%

OCR for paper to electronicconversion of freight invoices

Practice online bidding viaweb portal

Automated carrier selectionbased on known data and

rules

Automatically audit invoicesagainst electronic rate tables

Practice electronic invoicepresentment and payment

with carriers

Percent of Respondents, n = 174

Best-in-ClassIndustry AverageLaggard21%

40%

38%

23%

35%

30%

41%

43%

42%

57%

42%

44%

51%

61%

66%

Laggard21%

40%

38%

23%

35%

30%

41%

43%

42%

57%

42%

44%

51%

61%

66%

0% 20% 40% 60% 80%

OCR for paper to electronicconversion of freight invoices

Practice online bidding viaweb portal

Automated carrier selectionbased on known data and

rules

Automatically audit invoicesagainst electronic rate tables

Practice electronic invoicepresentment and payment

with carriers

Percent of Respondents, n = 174

Best-in-ClassIndustry AverageLaggard

Best-in-ClassIndustry AverageLaggard21%

40%

38%

23%

35%

30%

41%

43%

42%

57%

42%

44%

51%

61%

66%

Laggard

Source: Aberdeen Group, April 2011

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One area of known popularity is electronic invoice presentment and payment where the Best-in-Class (at 66%) are 1.5-times as likely as all others to have automated capabilities in place. This is a big difference particularly if you are a large shipper with millions of shipments and invoices to audit and pay. For these shippers, it therefore follows that the ability to automatically audit invoices is equally an important capability. This is a system that allows for each and every invoice to be compared and contrasted with contractual rates and historical trends. This system also provides the ability to support automated payment for items that are within user configurable acceptance criteria. This capability is also the type of solution that was deployed in our case study example at S&S Activeware. This system allowed S&S Activeware to expedite the payment process as well as collect historical transportation spend data to assist the next freight procurement cycle. It should be noted that Laggard companies at only 23% are behind the curve and, likewise, they are hampered in moving very far towards the goal of 100% freight audit. Indeed, at 27.1% they are behind the Industry Average and the Best-in-Class (52% and 87% respectively, Table 1, Metrics). Imagine having to manually process hundreds or thousands of payments each month without any automation in place to streamline the review and payment.

On the procurement-to-pay side of things, the Best-in-Class at 51% are 1.2-times as likely as all others to perform automated carrier selection. This capability allows them to demonstrate higher adherence to the routing guide and standard transportation lanes. What about promotional items or new spot order/lanes? Here the Best-in-Class are also leveraging online bidding tools for dynamic tendering of freight (44%) and have automated OCR techniques for conversion of freight invoices from paper to digital.

Across a broad range of transportation components today's software and automation tools are providing a strong foundation for companies to handle each step in the closed loop transportation procure-to-pay cycle. Today's software aids in eliminating manual steps where possible and bringing down overall processing costs. Beyond the savings in time and labor, those companies that excel in automation and transportation spend management are able to reduce their baseline freight costs by 4% to 5% and improve carrier service levels compared to their peers.

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Aberdeen Insights — Technology

Aberdeen research indicates that companies take three distinct approaches with enabling technology: using a best-of-breed model, a collaborative outsourcing model (leveraging third party providers), or a supply chain specific application within a broader SCM/ERP suite.

The technology section highlights key areas for investment and automation that should be considered when a company is enhancing or acquiring new capability around TPP and transportation spend management. Regardless of the specific approach, the adoption of technology has taken a turn for the better with a focus around four key criteria for making investment decisions. Three of these key criteria demonstrate that organizations understand the value of these solutions and are insisting that there is an ability to create more of an end-to-end process environment. The four criteria are:

• Feature and functionality / capabilities (72%)

• Price (67%)

• The ability to interface with existing technology / solutions (65%)

• Ability to extend functionality of existing solutions (52%)

Following features, "price" is a key requirement and at 67% it is important to contrast this with another key finding - over 40% of all respondents indicated that these solutions are still too expensive up-front, or too expensive / difficult to implement. For these companies much of the upfront costs and lead-times can be substantially reduced. As depicted in the case study and as discovered by many who have conducted the proper due diligence, it is important to be aware of the variety of solutions available today and the deployment options they provide. It is also important to look to the areas where others have found the biggest savings (see Summary Insight). The evolution of SaaS and on-demand offerings from most solution providers has delivered on the promise to decrease these historical hurdles. Companies must invest the time to educate their decision-making teams on the latest options in order to complete the proper due diligence around these solutions.

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Chapter Three: Required Actions

Whether a company is trying to move its performance in transportation spend management from Laggard to Industry Average, or Industry Average to Best-in-Class, the following actions will help spur the necessary performance improvements:

Manage TMS Globally Best-in-Class vs. Others

√ 1.65-times as likely on transportation procurement (61% vs 37% others)

√ 1.61 x as likely on freight audit and payment (53% vs 33% others)

Laggard Steps to Success • Measure and audit religiously. Only 27% of Laggard companies

currently are measuring freight cost and service compliance by auditing. The Best-in-Class at 87% are 3.2- times more likely to perform auditing and their metrics reflect it. Working to get control of transportation spend data is the end-goal, however it's more important to get visibility and measure compliance to cost and service in order to identify short and long term improvements.

Outsourcing Audit and Payment Process:

√ 62% Best-in-Class

√ 33% Industry Average

√ 22% Laggard • Increase the ability to track cost. Only 38% of the Laggards are tracking actual costs and accessorials. The Best-in-Class and Industry Average track at the 74% and 72% level respectively. Many companies still rely on paper-based tracking of this information, or keeping track in spreadsheets. It is critical to leverage technology to provide visibility to critical transportation spend data.

Industry Average Steps to Success • Integrate collaboratively with external groups. Working to

get control of transportation spend data is critical. Over 30% of all companies cite collaboration and synchronization of data with carriers, suppliers and trading partners as the second highest strategic action (Figure 2). But for the Industry Average on a global level only 16% can share that data with external partners. Collaborating to combine data into a global view will greatly increase spend analysis value-add opportunities and sharing with external partners will drive better performance.

• Close the gap on electronic payments. While over 78% of Industry Average companies measure carrier compliance to cost they have not fully automated electronic payment. Our survey indicated that only 51% of them have moved beyond auditing to automated payment (a 27 percentage point capabilities gap). By automating this final step they can increase processing speeds and accuracy and "close the loop on spend."

Best-in-Class Steps to Success • Optimize dynamically with the online community. About

40% of Best-in-Class companies are leveraging spend data visibility and optimization for bidding via community web portals. Optimizing

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the bid process is limited to your level of visibility. There are numerous public and private bidding and community freight boards that post capacity daily. By leveraging these tools into your daily freight operations, you can optimize your movements to get the best rates and greatly increase freight utilization.

• Implement freight-based incentives / scorecards. With the superior visibility and knowledge of historical costs of freight spend; score carding at a higher level can help drive further cost reductions. Rather than getting too lost in the individual charges, placing a score (an index) on each route and working to reduce the overall average cost per route can greatly improve savings and overall spend management. Currently about 30% of the Best-in-Class are attempting to use incentive based freight contracts or scorecarding to evaluate or negotiate all-in rates for freight.

Aberdeen Insights — Summary

The volatility and complexity in the world of transportation continues to grow exponentially and every company is looking for ways to sustain costs. The predominant pressure is the current volatility of freight and fuel costs. To combat this pressure, Best-in-Class companies are looking to optimize the process of sourcing, selecting, and negotiating freight rates, and increasing the degree of collaboration and data-synchronization with both their carriers and trading partners. With this primary objective in focus, the leading companies are continuing to acquire transportation spend control.

To achieve the capabilities needed to support these strategies, Best-in-Class companies utilize both foundational systems, such as TMS, but also specialized point-solutions for auditing, data analysis, and electronic communications or look to logistics services providers to provide the same.

Better management of transportation procurement, audit, and payment is enabling companies to negotiate reduced rates and lower the total costs of processing invoices. Through a combination of best practices and business transformation, radical improvement can be achieved. Automation of these processes, along with end-to-end integration, and the real-time availability and use of spend data, provides Best-in-Class companies with the ability to reduce overall freight spend. Moreover, these companies are also able to reduce the labor costs associated with managing these typically manual processes.

Supply chain executives want to be strategic and drive value. Getting costs under control has always been a goal and the "closed loop" transportation spend management cycle is capable of driving continuous value. Understanding and managing transportation costs and new practices will be a significant competitive advantage going forward; it will produce the leaders of the next decade.

“Our carriers at Sunoco have great contact with our customers. They can now inform our sales and support staff when a customer needs assistance or new ways to provide value-added services to them in the future. In the end, we’re all working together and lowering costs as a team.”

~ Thomas C. Moyer, Sr. Transportation Analyst,

Sunoco

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Appendix A: Research Methodology

Between March and April 2011, Aberdeen examined the use, the experiences, and the intentions of more than 174 enterprises regarding transportation contract, tender and spend management in a diverse set of enterprises.

Study Focus

Responding transportation management executives completed an online survey that included questions designed to determine the following:

√ The degree to which TPP solutions are deployed in their operations and the financial implications of the technology

√ The structure and effectiveness of existing TPP implementations

√ Current and planned use of TPP to aid operational and audit activities

√ The benefits, if any, that have been derived from TPP initiatives

The study aimed to identify emerging best practices for TPP, and to provide a framework by which readers could assess their own management capabilities.

Aberdeen supplemented this online survey effort with interviews with select survey respondents, gathering additional information on transportation contract, tender and spend management strategies, experiences, and results.

Responding enterprises included the following:

• Job title: The research sample included respondents with the following job titles: Manager (40%); Managing Director / Director (30%); EVP / SVP / VP (11%); CEO / President (7%); Consultant (6%); Staff (4%); and other (2%).

• Department / function: The research sample included respondents from the following departments or functions: supply chain, or logistics manager (55%); procurement (13%); operations manager (8%); senior management (7%); sales and marketing staff (8%); and IT manager or staff (3%).

• Industry: The research sample included respondents from: Transportation / logistics (13%); Wholesale Distribution (7%); Retail and Apparel (9%); Food and Beverage (9%); Industrial Manufacturing (10%); Consumer Packaged Goods (CPG) (5%); Computer Equipment (5%); Automotive (4%); Health and Medical (3%); Government, Aerospace and Defense (4%); and other (31%).

• Geography: The majority of respondents (72%) were from North America. Remaining respondents were from Europe (17%) and the Asia-Pacific region (11%).

• Company size: Forty-nine percent (49%) of respondents were from large enterprises (annual revenues above US $1 billion); 33% were from midsize enterprises (annual revenues between $50 million and $1 billion); and 18% of respondents were from small businesses (annual revenues of $50 million or less).

• Headcount: Fifty-seven percent (57%) of respondents were from large enterprises (headcount greater than 1,000 employees); 26% were from midsize enterprises (headcount between 100 and 999 employees); and 17% of respondents were from small businesses (headcount between 1 and 99 employees).

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Table 4: The PACE Framework Key

Overview Aberdeen applies a methodology to benchmark research that evaluates the business pressures, actions, capabilities, and enablers (PACE) that indicate corporate behavior in specific business processes. These terms are defined as follows: Pressures — external forces that impact an organization’s market position, competitiveness, or business operations (e.g., economic, political and regulatory, technology, changing customer preferences, competitive) Actions — the strategic approaches that an organization takes in response to industry pressures (e.g., align the corporate business model to leverage industry opportunities, such as product / service strategy, target markets, financial strategy, go-to-market, and sales strategy) Capabilities — the business process competencies required to execute corporate strategy (e.g., skilled people, brand, market positioning, viable products / services, ecosystem partners, financing) Enablers — the key functionality of technology solutions required to support the organization’s enabling business practices (e.g., development platform, applications, network connectivity, user interface, training and support, partner interfaces, data cleansing, and management)

Source: Aberdeen Group, April 2011

Table 5: The Competitive Framework Key

Overview The Aberdeen Competitive Framework defines enterprises as falling into one of the following three levels of practices and performance: Best-in-Class (20%) — Practices that are the best currently being employed and are significantly superior to the Industry Average, and result in the top industry performance. Industry Average (50%) — Practices that represent the average or norm, and result in average industry performance. Laggards (30%) — Practices that are significantly behind the average of the industry, and result in below average performance.

In the following categories: Process — What is the scope of process standardization? What is the efficiency and effectiveness of this process? Organization — How is your company currently organized to manage and optimize this particular process? Knowledge — What visibility do you have into key data and intelligence required to manage this process? Technology — What level of automation have you used to support this process? How is this automation integrated and aligned? Performance — What do you measure? How frequently? What’s your actual performance?

Source: Aberdeen Group, April 2011

Table 6: The Relationship Between PACE and the Competitive Framework

PACE and the Competitive Framework – How They Interact Aberdeen research indicates that companies that identify the most influential pressures and take the most transformational and effective actions are most likely to achieve superior performance. The level of competitive performance that a company achieves is strongly determined by the PACE choices that they make and how well they execute those decisions.

Source: Aberdeen Group, April 2011

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Appendix B: The Closed Loop Transportation Spend

Management Process Source: Transportation Procurement and Payment: Gain Control over Spend ,

Aberdeen February 2010

The February 2010 Aberdeen report on Transportation Procurement and Payment, (Transportation Procurement and Payment: Gain Control over Spend), delved deeply into the concept of closed loop transportation management. The technology that supports a closed loop transportation management platform is not new. Indeed this is very much in keeping with a key finding of Aberdeen's research demonstrating that companies are departing from thinking about transportation management in a linear format and, instead, as a closed loop, with each step in the process feeding the subsequent ones. Figure A depicts the "closed-loop spend management" cycle, with the capabilities shown on the inner circle, and the enabling technologies that drive integration and automation in the two outermost circles. A common, but less effective alternative to the closed-loop concept involves having the electronic flow of data cease at the audit and pay step. The model shown below completes the loop by having the shipment history form the audit and pay step flow directly into a spend analytics step, which is then used as a tool to create the request for proposal in the procurement process.

Figure A: The Transportation Closed Loop Process

Source: Aberdeen Group, February 2010

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In their steps towards closing the loop, Aberdeen found that companies take three distinct approaches with enabling technology: using a best-of-breed model, a collaborative outsourcing model ( leveraging third party providers), or a single application suite. The best-of-breed model involves using a combination of specialized bid optimization tools, Transportation Management Software (TMS), audit and payment applications, and transportation spend analytics solutions to produce a feature-rich platform of integrated applications. Often the outsourcing model leverages the same tools and process but involves an alliance with a logistics service provider for procurement, audit/pay or both. Alternatively, with a TMS, the various steps in the loop are all offered by a single software developer. In each case, the critical link to the individual processes is automated data conversion to ensure that there is an efficient information exchange at each step in the cycle.

In almost every instance, companies that are able to leverage technology to manage processes and remove the manual components of everyday tasks are able to focus more on delivering value versus entering data. In using the Aberdeen methodology to analyze technology usage, there continues to be greater adoption associated with the Best-in-Class group and alignment with driving better performance in key metrics. Across six different categories of technology usage (Figure B), over 40% of the Best-in-Class are taking advantage of opportunities to automate as much of the processes as possible.

Figure B: Technology Being Leveraged by the Best-in-Class

13%

27%

10%10%

19%

33% 34%

44%

36%37%44%

34%

53%60%

54%57%65%

29%

(TMS) Transportationprocurement module

Specialized freightaudit and payment tool

TMS routing guide forday to day carrierselection decisions

Electronic bidallocation optimization

to award lanes.

Electronically assistedbid analysis

Electronic invoicepresentment and

payment with carriers

n = 236LaggardAverageBest-in-Class

Electronic Data Conversion Technology Components

13%

27%

10%10%

19%

33% 34%

44%

36%37%44%

34%

53%60%

54%57%65%

29%

(TMS) Transportationprocurement module

Specialized freightaudit and payment tool

TMS routing guide forday to day carrierselection decisions

Electronic bidallocation optimization

to award lanes.

Electronically assistedbid analysis

Electronic invoicepresentment and

payment with carriers

n = 236LaggardAverageBest-in-Class

13%

27%

10%10%

19%

33% 34%

44%

36%37%44%

34%

53%60%

54%57%65%

29%

(TMS) Transportationprocurement module

Specialized freightaudit and payment tool

TMS routing guide forday to day carrierselection decisions

Electronic bidallocation optimization

to award lanes.

Electronically assistedbid analysis

Electronic invoicepresentment and

payment with carriers

n = 236LaggardAverageBest-in-Class

Electronic Data Conversion Technology Components

Source: Aberdeen Group, February 2010

In each case under electronic data conversion, the Best-in-Class are 2- to 6-times as likely as Laggards to have automation in place especially around the sourcing and procurement process, updating and auditing rate guides, and optimally awarding lanes via electronic updates.

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Under technology components, they are again 2.5 to 6 times as likely as Laggards to use extensions of TMS procurement solutions and specialized freight audit and payment tools to speed and automate the front-end to back-end of closed loop transportation process and enable tighter spend control.

Key Benefits of Closed Loop Process Key benefits of utilizing a true close loop spend management process to end users include the opportunities to control and manage transportation procurement and settlement:

• Monitor, reduce and control contracted freight rates and spend

• Track and control non-contracted freight rates and accessorial charges

• Reduce labor required to convert bid data into contract and then into rate tables and to support invoicing/auditing

• Reduce labor requirements for freight invoice auditing

Measure and control carriers’ compliance to contract costs and service level agreements:

• Improve spend data visibility and analysis for more effective bid management and negotiating new/updated contracts

• Improve ability manage information and enforce rules for carriers to adhere to contracts

• Reduce amount of over-billing from carriers

• Enable closed loop monitoring/auditing of budgets, contracts and actual charges

In summary, better management of transportation procurement, audit, and payment is enabling companies to negotiate reduced rates and lower the total costs of processing invoices. The automation of these processes, along with end-to-end integration, and the real-time availability and use of spend data, has provided Best-in-Class companies with the ability to reduce overall freight spend, as well as to reduce the labor costs associated with managing these typically manual processes.

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Appendix C: Related Aberdeen Research

Related Aberdeen research that forms a companion or reference to this report includes:

• International Transportation: Optimize Cost and Service in a Global Market; July 2010

• Transportation Procurement and Payment: Gain Control over Spend; February 2010

• State of Retail Logistics: Strengthening Cross-Channel Supply Chain Execution, March 2010

• Integrated Transportation Management: Improve Responsiveness with Real-Time Control of Execution; October, 2009

• Evaluating Logistics Outsourcing: Look Before You Leap! ; October, 2009

• Tending the Fleet: Paving New Roads with Effective Fleet Management; September, 2008

• No Excuses! Why Optimizing Transportation Management is Within the Reach of Every Company; July, 2008

• Achieving Closed-Loop Transportation Spend Management; January, 2008

Information on these and any other Aberdeen publications can be found at www.aberdeen.com.

Author: Bob Heaney, Senior Research Analyst, Supply Chain Management ([email protected])

For more than two decades, Aberdeen's research has been helping corporations worldwide become Best-in-Class. Having benchmarked the performance of more than 644,000 companies, Aberdeen is uniquely positioned to provide organizations with the facts that matter — the facts that enable companies to get ahead and drive results. That's why our research is relied on by more than 2.5 million readers in over 40 countries, 90% of the Fortune 1,000, and 93% of the Technology 500.

As a Harte-Hanks Company, Aberdeen’s research provides insight and analysis to the Harte-Hanks community of local, regional, national and international marketing executives. Combined, we help our customers leverage the power of insight to deliver innovative multichannel marketing programs that drive business-changing results. For additional information, visit Aberdeen http://www.aberdeen.com or call (617) 854-5200, or to learn more about Harte-Hanks, call (800) 456-9748 or go to http://www.harte-hanks.com.

This document is the result of primary research performed by Aberdeen Group. Aberdeen Group's methodologies provide for objective fact-based research and represent the best analysis available at the time of publication. Unless otherwise noted, the entire contents of this publication are copyrighted by Aberdeen Group, Inc. and may not be reproduced, distributed, archived, or transmitted in any form or by any means without prior written consent by Aberdeen Group, Inc. (2011a)