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e-procurement automation in the logistics industry

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The heavy lifting is now done for you! Automated calculation, Excel functions, scenario building and reporting processed within seconds. Cloud-based communication and documentation management can reduce the time spent on a freight tender with 70% Plan to adopt Procurement Technology 4 Procurement pain points that Technology can address in 2017 ANALYTICS & REPORTING CLOUD COMMUNICATION 34% Of survey respondents have no plans to automate transportation procurement practices. Plans to adopt technology within the next 12 month. 8% The State of E-PROCUREMENT In the Logistics Industry As such, logistics consultants can be more focused at the clients and the carriers during the tender and offering more value based on their knowledge, experience and skills than doing work that should be automated. No longer you are managing your carriers via confusing Excel sheets and your inbox. One central flow inside the cloud allows you to manage your carriers real-time. Dedicate your time to things that really matter! The State of Procurement Technology adoption Despite a clear understanding of the power of procurement tools, shippers have still not adopted freight sourcing technology on a large scale. In fact, many companies are still relying on a manual or spreadsheet-based approach to transportation procurement. Less than 10% of shippers use a dedicated freight procurement tool for all transportation buying activity and modes. The vast majority of the market still does not make use of transportation-specific procurement solutions Plans to adopt technology within the next 12-24 month. 11% Adoption in the 5 year's company plan. 5% 37% Of survey respondents are uncertain about the adoption of technology The heavy focus on excel templates, excel macro’s which starts to look like hobbying. Maybe freight buying is not so hard after all and tender managers should focus more on having clear partners instead of digging deep into excel in order to find hidden pricing patterns that will reveal the holy grail and massive savings. Poor focus on communication with carriers. Explaining what the tender is about, what the objectives are, personal contact with the carriers, helping them throughout the process, giving proper feedback etc. It is all not done or on a very limited scale. No wonder in most tenders not more than 50% of the carriers actually take part. This is an area for enormous improvement. Tenders are often managed by people who are not well equipped to do so because they just don’t have the right skill set or knowledge or they do it only on an irregular basis. In this case, get a consultant to help you or get try to make the process and the tender as straight forward as possible. Communication Extreme focus on your own internal RFP process and just expecting that everybody should and will follow their process. You are not adapting in any way to what works for carriers but just demanding they follow your often inconvenient fill- in exercise, not all carriers may be equipped to do this in the best way and will either participate poorly or not at all. Barriers of Procurement Technology adoption Excel limitations Limited skills Collaboration 2016 Shipper 3PL Lacks return on investment Current system or process meets our needs Organizational resistance to change Available systems do not provide the functionality we require We do not have the technical expertise to make a change The strongest factors keeping companies from investing in procurement technology are a perceived lack of return on investment for shippers, and a belief that the current system meets existing needs on the LSP side. Nearly 20% of the market remains convinced that current systems don’t offer the functions they need. Where Procurement Technology is needed Nearly two-thirds of retailers believe transportation plays a critical part in their companies’ omnichannel strategy. In 2016, 75% of manufacturers said ocean freight procurement is more technology-driven, compared to 24% last year, while 65% said airfreight is more technology-driven compared to 49% in 2015. The big pro's of dedicated Freight Procurement Solutions Carriers nowadays are used to receiving freight RFQ's from automated procurement solutions. Formerly, (older) procurement tools were seen as unfavorable because they were not aligned with the importance of the shipper-carrier relationship. Moving from a pure spreadsheet / email approach to one where the RFQ is submitted electronically and bid upon by carriers is now seen as best practice for shippers and LSP's. www.tendertool.com I The only independent freight sourcing platform I [email protected] Benchmark freight rates Scorecard freight carriers Track service level parameters Source: Analog Strategies in an Omnichannel World Transportation Procurement Benchmark Study American Shipper’s Transportation Procure-to-Pay Benchmark Series Companies are vulnerable if they don't 50% surveyed were neutral or didn’t know anything about existing tools. This suggests that the market is either unaware or uninformed about the global capability of freight procurement technology providers. Capability of current Procurement tools for global Logistics

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Page 1: E-Procurement automation in the Logistics Industry

Theheavyliftingisnowdoneforyou!Automatedcalculation,Excelfunctions,

scenariobuildingandreportingprocessedwithinseconds.

Cloud-basedcommunicationanddocumentationmanagementcanreduce

thetimespentonafreighttenderwith70%

PlantoadoptProcurementTechnology

4ProcurementpainpointsthatTechnologycanaddressin2017

ANALYTICS&REPORTING

CLOUDCOMMUNICATION

34%Ofsurveyrespondentshavenoplanstoautomatetransportationprocurementpractices.

Planstoadopttechnologywithinthenext12month.

8%

TheStateof

E-PROCUREMENTIntheLogisticsIndustry

Assuch,logisticsconsultantscanbemorefocusedattheclientsandthecarriersduringthe

tenderandofferingmorevaluebasedontheir

knowledge,experienceandskillsthandoingworkthatshouldbeautomated.

NolongeryouaremanagingyourcarriersviaconfusingExcelsheetsandyourinbox.Onecentral

flowinsidethecloudallowsyoutomanageyour

carriersreal-time.Dedicateyourtimetothingsthat

reallymatter!

TheStateofProcurementTechnologyadoptionDespiteaclearunderstandingofthepowerofprocurementtools,shippershave

stillnotadoptedfreightsourcingtechnologyonalargescale.Infact,manycompaniesarestillrelyingonamanualorspreadsheet-basedapproachtotransportationprocurement.Lessthan10%ofshippersuseadedicatedfreightprocurementtoolforalltransportationbuyingactivityandmodes.

Thevastmajorityofthemarketstilldoesnotmakeuseoftransportation-specificprocurementsolutions

Planstoadopttechnologywithinthenext12-24month.

11%

Adoptioninthe5year'scompanyplan.

5%

37%Ofsurveyrespondentsareuncertainabouttheadoptionoftechnology

Theheavyfocusonexceltemplates,excelmacro’swhichstartstolooklikehobbying.Maybefreightbuyingisnotsohardafterallandtendermanagersshouldfocusmoreonhavingclearpartnersinsteadofdiggingdeepintoexcelinordertofindhiddenpricingpatternsthatwillrevealtheholygrailandmassivesavings.

Poorfocusoncommunicationwithcarriers.Explainingwhatthetenderisabout,whattheobjectivesare,personalcontactwiththecarriers,helpingthemthroughouttheprocess,givingproperfeedbacketc.Itisallnotdoneoronaverylimitedscale.Nowonderinmosttendersnotmorethan50%ofthecarriersactuallytakepart.Thisisanareaforenormousimprovement.

Tendersareoftenmanagedbypeoplewhoarenotwellequippedtodosobecausetheyjustdon’thavetherightskillsetorknowledgeortheydoitonlyonanirregularbasis.Inthiscase,getaconsultanttohelpyouorgettrytomaketheprocessandthetenderasstraightforwardaspossible.

Communication

ExtremefocusonyourowninternalRFPprocessandjustexpectingthateverybodyshouldandwillfollowtheirprocess.Youarenotadaptinginanywaytowhatworksforcarriersbutjustdemandingtheyfollowyourofteninconvenientfill-inexercise,notallcarriersmaybeequippedtodothisinthebestwayandwilleitherparticipatepoorlyornotatall.

BarriersofProcurementTechnologyadoption

Excellimitations

Limitedskills Collaboration

2016

Shipper 3PL

Lacksreturnoninvestment

Currentsystemorprocessmeetsourneeds

Organizationalresistancetochange

Availablesystemsdonotprovidethefunctionalitywerequire

Wedonothavethetechnicalexpertisetomakeachange

Thestrongestfactorskeepingcompaniesfrominvestinginprocurementtechnologyareaperceivedlackofreturnoninvestmentforshippers,andabeliefthatthecurrentsystemmeetsexistingneedsontheLSPside.Nearly20%ofthemarketremainsconvincedthatcurrentsystemsdon’tofferthefunctionstheyneed.

WhereProcurementTechnologyisneededNearlytwo-thirdsofretailersbelievetransportationplaysacriticalpartintheir

companies’omnichannelstrategy.In2016,75%ofmanufacturerssaidoceanfreightprocurementismoretechnology-driven,comparedto24%lastyear,while65%saidairfreightismoretechnology-drivencomparedto49%in2015.

Thebigpro'sofdedicatedFreightProcurementSolutions

CarriersnowadaysareusedtoreceivingfreightRFQ'sfrom

automatedprocurementsolutions.

Formerly,(older)procurementtoolswereseenasunfavorablebecausetheywerenotalignedwiththe

importanceoftheshipper-carrierrelationship.

Movingfromapurespreadsheet/emailapproachtoonewheretheRFQis

submittedelectronicallyandbiduponbycarriersisnowseenasbestpracticefor

shippersandLSP's.

www.tendertool.comITheonlyindependentfreightsourcingplatformIinfo@tendertool.com

BenchmarkfreightratesScorecardfreightcarriers

Trackservicelevelparameters

Source:AnalogStrategiesinanOmnichannelWorldTransportation

ProcurementBenchmarkStudyAmericanShipper’sTransportationProcure-to-PayBenchmarkSeries

Companiesarevulnerableiftheydon't

50%surveyedwereneutralordidn’tknowanythingaboutexistingtools.Thissuggeststhatthemarketiseitherunawareoruninformedabouttheglobalcapabilityoffreightprocurementtechnologyproviders.

CapabilityofcurrentProcurementtoolsforglobalLogistics

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OMSAN LOJİSTİK e-Procurement Procurement and Supplier Relationship Management Latin America Logistics Center Logistics Management Series

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