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Transportation Procurement and Payment Gain Control over Spend February 2010 Bob Heaney ~ Underwritten, in Part, by ~

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Page 1: Whitepaper transportation procurement_payment

Transportation Procurement and Payment

Gain Control over Spend

February 2010

Bob Heaney

~ Underwritten, in Part, by ~

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© 2010 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

Through survey-based research conducted in January 2010 involving 236 respondents, this Aberdeen Group benchmark report investigates the key capabilities that make transportation procurement and payment an important strategic initiative in today's economy. Given the pressures being faced by today's transportation organizations, 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.

Best-in-Class Performance Aberdeen used the following four key performance criteria to distinguish Best-in-Class performers with respect to transportation procurement and payment. They achieve:

• 5.71% year-over-year decrease in baseline freight spend (per unit handled)

• 95.45% of carriers are compliant with their contract cost

• 94.7% of carriers are meeting their SLA routing compliance

• 2.84 days to process a freight invoice from receipt to payment “We’re optimistic that we can save $3 to $4 million dollars in reduced contract and accessorial rates.”

~ Gregg Bostick, Vice President of Transportation, Pinnacle

Foods

Competitive Maturity Assessment Survey results show that the firms enjoying Best-in-Class performance shared several common characteristics. They are:

• 1.85-times as likely as Industry Average, and 4.3-times as likely as Laggards to have a centralized spend management platform in place capable of multi-language and multi-currency

• 1.6-times as likely as Industry Average, and 6-times as likely as Laggards to use an electronic routing of a TMS solution for daily carrier selection

• 1.3-times as likely as Industry Average, and 1.43-times as likely as Laggards to have a single person or department manage transportation spend globally

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

• Begin improving transportation spend management by automating either contract procurement or freight audit and payment

• Complete the spend management loop to gain control over spend

• Consider community benchmarking for even greater reduction of contracted rates

www.aberdeen.com Fax: 617 723 7897

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© 2010 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........................................................................................... 7

Chapter Two: Benchmarking Requirements for Success.................................10 Capabilities and Enablers ......................................................................................14

Chapter Three: Required Actions .........................................................................23 Laggard Steps to Success......................................................................................23 Industry Average Steps to Success ....................................................................23 Best-in-Class Steps to Success ............................................................................24

Appendix A: Research Methodology.....................................................................26 Appendix B: Related Aberdeen Research............................................................28 Featured Underwriters ..............................................................................................29 Figures Figure 1: The Pressure to Improve Transportation Spend Management ........ 5 Figure 2: Best-in-Class Strategic Actions................................................................. 7 Figure 3: Management's Directives for Creating Change ..................................10 Figure 4: A Single Point of Control for Increased Flexibility ............................15 Figure 5: Savings Start With Data Visibility and Access.....................................16 Figure 6: Metrics that the Best-in-Class Use to Measure Carrier Performance .................................................................................................................17 Figure 7: Metrics that the Best-in-Class Use to Measure Internal Compliance .18 Figure 8: The Transportation Closed Loop Process ..........................................19 Figure 9: Technology Being Leveraged by the Best-in-Class.............................20 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...................................................................12 Table 4: Key Knowledge Management Differentiators ......................................16 Table 5: The PACE Framework Key ......................................................................27 Table 6: The Competitive Framework Key ..........................................................27 Table 7: The Relationship Between PACE and the Competitive Framework.........................................................................................................................................27

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© 2010 Aberdeen Group. Telephone: 617 854 5200

Chapter One: Benchmarking the Best-in-Class

Business Context Best-in-Class utilize highly automated technology:

√ 60% TMS routing guide for day-to-day carrier selection decisions

√ 53% specialized freight audit and payment tool

√ 34% (TMS) transportation procurement module

Companies have been managing complex transportation procurement and payment processes for a long time - they have been evolving and maturing since the 1980's. How well those processes were being managed and the overall cost to the company has suddenly become more important from a corporate standpoint. In Aberdeen's October 2009 report, Integrated Transportation Management: Improve Responsiveness with Real-Time Control of Execution, almost 65% of respondents indicated that managing transportation and shipping costs was one of the biggest challenges facing their organization. The credit crunch and volatile fuel charges caught many organizations by surprise and they lacked sufficient processes to manage the changes effectively. This sudden shift in economic drivers still continues to be a concern and is one of the key reasons behind the pressures facing many logistics executives. In addition, the lowering of demand from end consumers has resulted in several shippers scrambling to lower their production and in turn lower their shipments to regional distribution centers, customer warehouses, etc. The top strategy for 47% of respondents from a survey of 180 companies (from the October TMS 2009 study) was to "renegotiate contracts with carriers" where Best-in-Class companies were 1.7-times as likely as Laggards to take this action – leaving ample room for improvement.

Not only have volatile freight costs and shipping charges forced many executives to panic and throw more resources at trying to solve the problem, but more groups within the organization are suddenly seeing the true costs behind transportation and are creating mandates to try and bring it under control. As shown in Figure 1, over one-third of the respondents are in a situation where not only is more of the company aware of the cost and service impact of transportation on the overall supply chain, but they are now being faced with the company executives asking for something to be done about it. Thirty-five to forty-five percent (35% to 45%) of these executives are looking for process and technology improvement in transportation payment and procurement in the next 12-months.

www.aberdeen.com Fax: 617 723 7897

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© 2010 Aberdeen Group. Telephone: 617 854 5200

Figure 1: The Pressure to Improve Transportation Spend Management

18%

24%

30%

43%

50%

0% 10% 20% 30% 40% 50% 60%

Customers demanding faster and morefrequent deliveries

Sourcing complexity due to increasedglobalization / low-cost country shif ts

Corporate mandate to improve orformalize transportation spending control

Increasing awareness of the cost andservice impact of transportation

Volatility of freight costs and/or fuelsurcharges

Percentage of Respondents, n = 236 Source: Aberdeen Group, February 2010

This can be even more of an issue for companies which have very thin profit margins, where operational efficiencies in the distribution process can be critical. But the complexity of the global supply chain and the scale of inbound and outbound spend control demands a tighter synchronization of both the procurement and payment aspects of transportation management.

The Maturity Class Framework Aberdeen used four 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 four 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

5.71% year-over-year decrease in baseline freight spend (per unit handled) 95.45% of carriers are compliant with their contract cost 94.7% of carriers are meeting their SLA routing compliance 2.84 days to process a freight invoice from receipt to payment

www.aberdeen.com Fax: 617 723 7897

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© 2010 Aberdeen Group. Telephone: 617 854 5200 www.aberdeen.com Fax: 617 723 7897

Definition of Maturity Class Mean Class Performance

Industry Average: Middle 50% of aggregate

performance scorers

3.08% year-over-year decrease in baseline freight spend (per unit handled) 88.45% of carriers are compliant with their contract cost 88.2% of carriers are meeting their SLA routing compliance 7.11 days to process a freight invoice from receipt to payment

Laggard: Bottom 30% of aggregate

performance scorers

0.65% year-over-year decrease in baseline freight spend (per unit handled) 50.45% of carriers are compliant with their contract cost 57.8% of carriers are meeting their SLA routing compliance 10.04 days to process a freight invoice from receipt to payment

Source: Aberdeen Group, February 2010

The Best-in-Class PACE Model Leveraging technology is not enough to drive performance improvements across an organization. To achieve corporate goals that drive efficiencies and cost-savings around transportation spend requires a combination of strategic actions, organizational capabilities, and enabling technologies that can be summarized in Table 2.

Table 2: The Best-in-Class PACE Framework

Pressures Actions Capabilities Enablers Volatility of freight costs and/or fuel cost surcharges

Improve our internal ability to analyze freight spend Improve our internal ability to source and negotiate freight rates

Overall Procurement and payment are both automated and fully integrated Measure carrier compliance to contract by invoice accuracy Transportation procurement managed globally

Procurement Electronic invoice presentment and payment with carriers Incremental, multi-round, or expressive bidding

Freight audit and payment Formal root cause analysis for repeat invoice errors Tracking of total freight cost including accessorials Measure carrier compliance to contract by on-time delivery

Automated data conversion Electronic routing guides Transportation procurement and payment module of a TMS Specialized freight audit and procurement tool Spend analytics 3PLs, LSPs, or freight companies with transportation procurement and payment or freight audit services.

Source: Aberdeen Group, February 2010

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© 2010 Aberdeen Group. Telephone: 617 854 5200

Best-in-Class Strategies Fast Facts

√ Companies that have less than $10 processing cost per invoice are more than twice as likely as their peers to use a specialized freight audit and payment tool

√ Companies that have reduced contracted freight rates are twice as likely as their peers to use a specialized transportation procurement tool

Consistent with freight costs and volatility being the top two key pressures among respondents, companies are focusing their strategies on controlling spend. Best-in-Class organizations are 1.3-times more likely than Industry Average and Laggard companies combined to be pressured by executives to improve transportation spend control. In response to both the external and internal pressures, most companies are planning to attack individual pieces of the spend management process (Figure 2).

Figure 2: Best-in-Class Strategic Actions

15%

14%

20%

32%

41%

17%

26%

21%

42%

46%

22%

28%

30%

44%

44%

0% 10% 20% 30% 40% 50%

Tie transportation, carrier selection,audit, and payment together in one process

Collaborate and synchronize data withcarriers, suppliers, and trading partners

Enforce adherence to routing guide/ convert bid responses to rate tables

Automate ability to source and negotiatef reight rates and award optimal carriers

Automate data collection and analysison f reight spend / updates to rate tables

Percentage of Respondents, n = 236

Best-in-ClassIndustry AverageLaggard

Source: Aberdeen Group, February 2010

Without some level of automation, auditing 100% of freight invoices can be a labor-intense process, and administrative costs eat away at whatever monies are recovered due to closer scrutiny of invoices. Companies that don't posses tools to assist with the process either throw labor at the problem, or choose to only audit a small percentage of freight invoices. The former solution is very expensive; the latter fails to identify invoicing errors, and, more importantly, fails to provide an accurate shipment history database that can be used to improve the entire spend management process. A shipment history that only contains total cost on an invoice, and is not broken down by accessorial charges is of limited benefit when analyzing ways to improve network efficiency.

Closing the Loop Best-in-Class companies in this study are three times as likely as their peers to practice closed loop transportation spend management, as evidenced by their achieving both automation and integration of procurement and payment activities. Automation and integration are key characteristics because they allow data to flow from step to step in repeatable processes and from one stage to the next across the strategic actions depicted in

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© 2010 Aberdeen Group. Telephone: 617 854 5200 www.aberdeen.com Fax: 617 723 7897

Figure 2. Industry Average and Laggard companies are 2.5-to 3-times more likely to have manual processes in place, or to have automated one, but not both of the key areas of spend management.

Interestingly, most companies are in a situation where they have automated their audit and payment processes in some way, but have no similar levels of automation in procurement. This is often due to the fact that for many companies, transportation procurement is not centralized. It is performed at the local or department level based on legacy carrier relationships, and managed through the use of rudimentary tools like spreadsheets. Audit and payment are more likely to have at least a base level of automation due to the fairly widespread use of electronic invoice presentment and payment technology, as well as companies' greater propensity to work with managed services providers in this area.

Achieving a closed-loop system is usually a multi-step transition (see Figure 8 for an illustration of this system). Recognizing that procurement and payment are unique functions in most companies, this report expands upon these two primary categories at the front and back ends of transportation spend, highlighting Best-in-Class methods for managing each.

Aberdeen Insights — Strategy

Best-in-Class companies are more likely to be honest with themselves about the importance of the auditing process, and realistic about their own abilities to do it well. Consequently, these companies often choose to outsource freight audit and payment, either as a permanent solution, or as an interim step until such time as they can improve their internal ability to do it. This is a strategy that has produced results, as evidenced by the fact that Best-in-Class companies that outsource freight audit and payment were more likely than their peers to posses the following capabilities through their managed service providers:

• Practice electronic invoice presentment and payment with carriers

• Practice formal root cause analysis for repeated invoice errors

• Automatically audit invoices against electronic rate tables

• Tracking of total freight cost including accessorials (e.g. detention and stop-off charges), fuel charges, and invoice dispute costs

This is a testimony to the fact that managed service providers have made strides in improving their capabilities to serve the market.

continued

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© 2010 Aberdeen Group. Telephone: 617 854 5200 www.aberdeen.com Fax: 617 723 7897

Aberdeen Insights — Strategy

Understanding the actual spend on transportation, including drilling down to all accessorials and surcharges is the most important first step to bringing spend under control and creating more strategic value. Despite the value of this information and its impact on the strategic actions behind transportation sourcing and procurement decisions, many organizations continue to rely on "perceived" costs versus actual costs and closing the loop on spend.

Leveraging technology to track, analyze, and provide visibility to critical transportation spend data can be a differentiator and lead to reducing costs. Understanding actual costs by route, by carrier, or by the options available can be beneficial when planning and scheduling shipments. In addition to the value of data in the procurement process, leveraging this information and visibility in the audit and payment process can save hours of time and significantly reduce payment errors. The visibility of payment errors, improving payment compliance, and the ability to manage the audit and payment process strategically can have an additional costs savings impact.

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

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© 2010 Aberdeen Group. Telephone: 617 854 5200

Chapter Two: Benchmarking Requirements for Success

While organizational changes can create a positive impact they should rarely be enacted until an organization has first focused on process and technology. This approach is borne out in our survey results, as Best-in-Class companies were more likely to provide recommendations for process (67%) and technology (64%) than for those concerning organizational change.

Figure 3: Management's Directives for Creating Change

44%

57%

69%

46%

64%

67%

0% 10% 20% 30% 40% 50% 60% 70% 80%

Recommendations forOrganizational Changes

Recommendations forTechnology Enhancements

Recommendations forProcess Changes

Percentage of Respondents, n = 236

Best-in-ClassAll Others

Source: Aberdeen Group, February 2010

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.

Pinnacle Foods Chooses Transportation Suite Starting With Audit and Payment

Pinnacle Foods is a large food manufacturer with household brands such as Duncan Hines, Vlasic, and Swanson. The company had been completely outsourcing its transportation execution as well as audit and payment to a managed service provider, but was only enjoying limited success. So shortly after hiring a new Vice President of Transportation, the company chose to set out on the path of closed-loop transportation spend management to better handle their $125 million USD in annual spend.

continued

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

√ 84% compare to competitors rates for pricing

√ 55% compare carries to internal historical pricing

√ 43% utilize community data from peers

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© 2010 Aberdeen Group. Telephone: 617 854 5200 www.aberdeen.com Fax: 617 723 7897

Pinnacle Foods Chooses Transportation Suite Starting With Audit and Payment

Pinnacle chose the application suite approach, with a single software vendor providing the various components in the spend management wheel. Pinnacle chose a TMS with a Software-as-a-Service (SaaS) model, and began the project by implementing tactical planning and execution. Because Pinnacle had a closed-loop vision in mind, the company decided to proceed next with improving the audit and payment side of the wheel. The Return on Investment (ROI) in this area might be less than it would be to improve procurement, but Pinnacle knew that the data that resulted from a better audit and payment process would allow them to realize those procurement savings to an even greater level—they would just have to wait a little longer to see it.

The company chose to bring their outsourced audit and payment process in-house by using a freight payment module from their TMS provider. Pinnacle also chose to implement self-invoicing. After the carrier submits an electronic proof of delivery to Pinnacle via the online system or through EDI, they are given an additional five days to submit any accessorial charges that may have been incurred. At that point, Pinnacle’s TMS calculates the amount the carrier is due and makes a payment. Carriers are normally paid net 28 days, but Pinnacle agrees to pay within seven days if the carrier is willing to offer a discount for such services.

The results of this process have been significant—Pinnacle has saved $120,000 USD annually over paying a third party provider to perform this service, and they have not had to commit any additional administrative labor to audit and payment.

To close the loop, Pinnacle chose the same TMS provider to host their first ever national transportation bid. Since the company already automated their audit and payment process, a rich database of freight spend data exists so that Pinnacle can host a very accurate bid process. In addition, their on-demand TMS provider is making use of community spend data to identify areas where Pinnacle is paying rates that are much higher than their peers. The TMS provider was able to bring an additional 70 carriers to the bid table who might offer more competitive rates in those areas.

“For us, it made sense to use a single technology platform for as much of the process as possible,” says Gregg Bostick, Vice President of Transportation for Pinnacle. “Our existing carriers are already communicating with us electronically through our TMS, so it was logical for us to use the same set of tools to host our freight bid. We’re optimistic that we can save $3 to $4 million dollars in reduced contract and accessorial rates.”

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© 2010 Aberdeen Group. Telephone: 617 854 5200 www.aberdeen.com Fax: 617 723 7897

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

Strategic bid allocation based on business performance of carriers

73% 47% 21%

Practice multi-round bidding

58% 40% 30%

Practice incremental bidding as requirements change between bid contracts

52% 29% 16%

Centralized transportation spend management platform in place, capable of multi-language, multi-currency

Process

52% 28% 12%

A single person or department is responsible for managing all spend activities across all of our departments/divisions

70% 54% 49%

Transportation procurement managed globally

Organization

69% 44% 34%

Tracking of total freight cost including accessorials (e.g. detention and stop-off charges), fuel charges, and invoice dispute costs

64% 54% 33%

Real-time ranking and analytics visible during procurement selection process

56% 34% 17%

Over 90% of the company's transportation invoices are currently audited

Knowledge

44% 31% 19%

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© 2010 Aberdeen Group. Telephone: 617 854 5200 www.aberdeen.com Fax: 617 723 7897

Best-in-Class Average Laggards

Utilizing electronic data conversion for:

65% - electronic invoice presentment and payment with carriers 57% -Electronically assisted bid analysis 54% - Electronic bid allocation optimization to award lanes.

44% - electronic invoice presentment and payment with carriers 37% -Electronically assisted bid analysis 29% - Electronic bid allocation optimization to award lanes.

33% - electronic invoice presentment and payment with carriers 19% -Electronically assisted bid analysis 10% - Electronic bid allocation optimization to award lanes

Utilizing technology components:

60% - TMS routing guide for day-to-day carrier selection decisions 53% -Specialized freight audit and payment tool 34% -(TMS) Transportation procurement module

36% - TMS routing guide for day-to-day carrier selection decisions 44% -Specialized freight audit and payment tool 34% - (TMS) Transportation procurement module

10% - TMS routing guide for day-to-day carrier selection decisions 27% -Specialized freight audit and payment tool 13% - (TMS) Transportation procurement module

Utilizing highly automated data conversion for:

Technology

50% - Audit and payment of truckload or less-than-truckload invoices 42% - Audit and payment of parcel carrier invoices 33% - Procurement of truckload or less-than-truckload contracts

32% - Audit and payment of truckload or less-than-truckload invoices 29% - Audit and payment of parcel carrier invoices 20% - Procurement of truckload or less-than-truckload contracts

12% - Audit and payment of truckload or less-than-truckload invoices 16% - Audit and payment of parcel carrier invoices 6% - Procurement of truckload or less-than-truckload contracts

Practice online collaboration with carriers for invoice exception handling

44% 29% 22%

Use incentive-based freight contracts

Performance

34% 20% 18%

Source: Aberdeen Group, February 2010

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© 2010 Aberdeen Group. Telephone: 617 854 5200

Capabilities and Enablers “By outsourcing our audit and payment process we’ve been able to reduce our freight spend by more than $500k since 2006. We’ve even reduced our errors down to 12 to 15 last year out of the more than 15,000 bills we pay yearly.”

~ Tim Knepple, Logistics Manager, JustRite

Manufacturing

Based on the findings of the Competitive Framework and interviews with end users, Aberdeen’s analysis of the Best-in-Class shows that the key to taking control and managing transportation spend begins with gaining visibility to upstream transactions and using that data as critical input to subsequent activities from routing, audit and pay and back again to eventually feed future procurement decisions. While many strides are being made here, well over 50% of all respondents are still relying on keying or manual processing for all facets of the transportation spend process, including:

• Converting bid responses to contracts (78%) • Creation of RFPs for transportation bids (75%) • Inputting carrier bid responses to a bid analysis tool (68%) • Converting freight contracts to rate tables (65%) • Inputting freight invoices into accounting systems (56%)

It is often argued that automating processes first will bring better data visibility; however many practitioners today are of the belief that getting technology in place that provides data visibility is the most important step because it's that data that will help determine what additional technology is necessary to drive more efficiency. The combination of technology with process, knowledge management and organizational changes will create the most impact. Best-in-Class performers are much further ahead and have clearly separated themselves from the pack through achieving a 22% higher percentage level of carriers who are compliant with contractual cost (95.45% Best-in-Class versus 74.14% of all other companies – Industry Average and Laggard companies combined).

Process It is important to select the right carriers and doing so can elevate the carrier's and a company's overall attainment of both contract cost and routing compliance. Top performers exceed 94% compliance (Table I) while Industry Average do not exceed 88.5% and Laggards do not exceed 58%. We see a key differentiator for the Best-in-Class: they are 1.5-times as likely as the Industry Average and 3.5-times as likely as Laggards to utilize strategic bid allocation based on business performance of carriers (Table 3). This illustrates the principle that selection and knowledge are tightly linked - you need visibility to performance data to both select carriers and then to monitor/ensure contract compliance. Additionally, working in silos can be detrimental to any process, with or without access to valuable data. Collaboration internally and externally adds value to the decision making process and puts even more power in the hands of employees, letting them automate and inform decisions they're responsible for, while continuing to extend the processes to involve more stakeholders. The Best-in-Class have done a good job of increasing collaboration in the bid process through 1) multi-round bidding, and 2) following up with incremental bidding to create more flexibility and control in transportation spend management (Table 3). Frequent collaboration with carriers and trading partners in the bidding process is yet another advantage

www.aberdeen.com Fax: 617 723 7897

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© 2010 Aberdeen Group. Telephone: 617 854 5200

of top companies. Best-in-Class performers are achieving practice levels of 1.5- to 2-times higher than all others combined. Turning attention towards how to streamline procurement and payment processes, the focus should be on managing exceptions and improving data conversion in spend management across the global supply chain. The Best-in-Class are already doing more in utilizing global currency and multi-unit data conversion as part of their solution with more than 50% practicing on a centralized transportation spend management platform capable of multi-language, multi-currency (Table 3). In an effort to take more control of transportation spend and create more flexibility to avoid excessive charges, companies should also investigate:

• Real-time ranking and analytics visible during procurement selection process • Practicing online collaboration with carriers for invoice exception handling • Use of incentive-based freight contracts

Organization The freight audit and payment process is post execution - it can only ensure conformance to contracts or inform future negotiations. It's clear that the true value to an organization's transportation spend management is around the sourcing and procurement of freight. As can be seen in Figure 4, the Best-in-Class are doing more to centralize control and focus on a global vision for transportation spend management, providing them with a much clearer view of the true cost of doing business. The Best-in-Class are also taking to heart the argument to outsource components that are non-differentiators and have typically taken more resources to manage as relationships have become more complex. However, there is still room for some debate as many solutions have gotten to the point where companies can now more effectively manage their own freight audit and payment process to their own comfort level. Almost 45% of respondents that currently are managing their own audit and payment process have no plans to outsource any time soon. Both options should be considered in detail when restructuring the organization.

Figure 4: A Single Point of Control for Increased Flexibility

21%25%34%

49%

31%34%44%

33%

49%

69%70%

54%

All Freight Audit andPayment outsourced,

with no plans tochange

Freight audit andpayment managed

globally

Transportationprocurement managed

globally

A single person ordepartment is

responsible formanaging all spendactivities globally n = 236

LaggardAverageBest-in-Class

21%25%34%

49%

31%34%44%

33%

49%

69%70%

54%

All Freight Audit andPayment outsourced,

with no plans tochange

Freight audit andpayment managed

globally

Transportationprocurement managed

globally

A single person ordepartment is

responsible formanaging all spendactivities globally n = 236

LaggardAverageBest-in-Class

“Our timelines were lengthy and required a lot of collaboration between us and the carrier. Now we can provide better visibility on our schedules and get more reliable commitments and rates from the carriers, creating a win-win for both of us.”

~ Max Beach, Logistics Manager at Northwest Pipe

Source: Aberdeen Group, February 2010

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© 2010 Aberdeen Group. Telephone: 617 854 5200

For companies that typically manage their own freight audit and payment, without technology to automate and enable that process, the level of complexity can only create more room for error. In the present study, more than half of all responding companies reported handling either procurement or payment manually. In the new world of global transportation, the ramifications of errors are exacerbated and directly hit the bottom-line when it comes to supply chain costs. Imagine having to manually process hundreds or thousands of payments each month without any automation in place to streamline the review and payment. Adding headcount to tackle problems is not going to be an option; executives need to re-evaluate the options available that don't include adding labor to manage out-dated processes and to allow core resources to provide value around analysis, not interpreting blurry faxes.

Knowledge Management The Best-in-Class have done a better job of recognizing the value of data and knowledge as part of a "closed loop" transportation management process. This is illustrated by the level of current capabilities among Best-in-Class performers as compared to all others regarding collaborative knowledge to ensure competitive freight rates (as illustrated in Table 4).

Table 4: Key Knowledge Management Differentiators

Best-in-Class Industry Average Laggards Performance measurements for competitive freight rates 90% - compare carriers to their competitors' pricing 56% - compare carriers to their own historical pricing 50% -utilize community data from our peers

84% - compare carriers to their competitors' pricing 55% - compare carriers to their own historical pricing

79% - compare carriers to their competitors' pricing

43% - utilize community data from our peers

52% - compare carriers to their own historical pricing 31% - utilize community data from our peers

Source: Aberdeen Group, February 2010

In order for companies to truly leverage their transportation spend data and provide access for employees to leverage that information and make better business decisions, the information cannot be kept on spreadsheets and reside on local databases at each location.

Figure 5: Savings Start With Data Visibility and Access "We really had no centralized visibility to our transportation spend. This was the first step we needed to make in order to start the process of bringing our spend under control. Without the visibility, everything else we did would have been guess work."

~ Chris Cavin, Director of Transportation, RockTenn

24%

29%

31%

33%

33%

37%

Procurement Knowledgeand Data are sharedinternally at the global

level

Freight Audit andPayment Knowledge andData are shared internally

at the global level

n = 236

Best-in-Class

Average

Laggard24%

29%

31%

33%

33%

37%

Procurement Knowledgeand Data are sharedinternally at the global

level

Freight Audit andPayment Knowledge andData are shared internally

at the global level

n = 236

Best-in-Class

Average

Laggard

Source: Aberdeen Group, February 2010

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It is the level of sharing and visibility to detailed knowledge and its ease of integration into the overall transportation selection and management process that allows top companies to deliver higher levels of performance in carrier contractual compliance and reduced cost. The gap between the Best-in-Class and Laggards focuses on the ability to move beyond traditional processes like:

• Manually processing bid and contract information with disparate data from numerous sources including printouts, faxes, and copies

• Using spreadsheets to manage the bid process • Overly labor-intensive or incomplete audit processes that fail to

match accurate activities and billing information • Manual processes for monitoring contract agreements and actual

performance of carriers, often resulting in missed opportunities to flag billing / contract errors that could reduce spend

• Lack of a means (other than labor-intensive data mining) to track and analyze data from the audit process in order to improve / negotiate relationships with carriers based on actual performance or contract changes

Performance Management With much of the focus being on data visibility and access as a key component of any transportation management process, and how it becomes a key input to closed loop transportation spend management; it is how effectively companies use that data that can be a key differentiator. In Figure 6 and Figure 7, it's clear that the Best-in-Class have done an exceptional job of setting up performance measurements with their carriers and internally to ensure that key business goals are followed and lead to driving down transportation spend.

Figure 6: Metrics that the Best-in-Class Use to Measure Carrier Performance

14%

29%

54%

54%

89%

31%

39%

71%

71%

88%

44%

50%

74%

80%

88%

0% 20% 40% 60% 80% 100%

Tenderacceptance rate

Data quality

On-time pick-up

Invoice accuracy

On-time delivery

Percentage of Respondents, n = 236

Best-in-ClassIndustry AverageLaggard

Source: Aberdeen Group, February 2010

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Because more of the Best-in-Class have visibility to detailed transportation spend data, they are better positioned to leverage that information in a more dynamic fashion. This includes providing scorecards and measurements at all points along the transportation spend process. For example, it may be easy for companies, even with manual spreadsheets, to track on-dime delivery. But the time to identify and utilize updated scores for on-time delivery as well as invoice accuracy and other metrics during the sourcing / tendering process is at risk with more complex situations, and can have a dramatic effect on the ability to reduce overall costs.

It's not only important to understand carrier performance, but also to understand internal compliance. Guidelines are in place for a reason and ensuring that resources are using data to their advantage and making better decisions is important to controlling costs.

Figure 7: Metrics that the Best-in-Class Use to Measure Internal Compliance

27%

25%

45%

67%

58%

30%

31%

51%

68%

64%

32%

32%

36%

57%

77%

0% 20% 40% 60% 80% 100%

Driver wait times

Data quality

Invoice accuracy

Volume commitments

Payment time

Percentage of Respondents, n = 236

Best-in-ClassIndustry AverageLaggard

Source: Aberdeen Group, February 2010

Technology The concept of technology enablement within 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 8 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 in Figure 8 completes the loop by having the shipment

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history from 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 8: The Transportation Closed Loop Process

Source: Aberdeen Group, February 2010

Aberdeen research has found that companies take one of three distinct approaches with acquiring/adopting enabling technology:

• A best-of-breed model

• A collaborative outsourcing model (leveraging third party providers)

• A single application suite.

The "best-of-breed" model involves the use of a combination of specialized bid optimization tools, Transportation Management Software (TMS), audit and payment applications, and spend analytics solutions to produce a feature-rich platform of integrated applications. The outsourcing model often leverages the same tools and process but involves an alliance with a logistics service provider for procurement, audit/pay or both. Alternatively, with a transportation management suite (single application suite approach), 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.

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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 manually managing and manipulating 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 9), over 40% of the Best-in-Class are taking advantage of opportunities to automate as much of the processes as possible.

Figure 9: 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.

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.

Respondents have identified four key criteria for making technology adoption and investment decisions, three of which point to the fact 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 (67%)

• Price (65%)

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• 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 65% it is important to contrast this with another key finding – over 40% of all respondents feel 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 Pinnacle case study earlier, 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. 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.

Case Study: Northwest Pipe Company

Northwest Pipe Company is used to a lot of hands-on managing of their business in manufacturing large industrial pipe. However, the hands-on approach for managing transportation spend was suddenly not enough to keep up with the changing landscape of transportation needs. “We took a step back and realized that everything we were doing around managing our transportation was completely manual,” says Max Beach, Logistics Manager at Northwest Pipe. “We were managing a lot of paperwork and entering a lot of manual data; we were just keeping up, not being strategic.”

Managing over 17,000 flat bed shipments per year in North America can be difficult, especially when rates and charges are changing under your feet. It was difficult to get a handle on exactly what contracts and commitments were in place and what the true level of spend was at any point in time. “We suddenly realized we had over 230 carriers but no idea if that was the right mix,” said Beach. Bringing a technology solution on-board that removed the manual processing and created online visibility was a catalyst for change.

With lengthy planning times for their projects, getting quotes from carriers was difficult and required carriers to estimate extremely volatile costs. “Our timelines were lengthy and required a lot of collaboration between us and the carrier. Now we can provide better visibility on our schedules and get more reliable commitments and rates from the carriers, creating a win-win for both of us,” says Beach.

Northwest Pipe has been running their solution some time and after only four months they’ve already seen tremendous improvement in the transportation spend management process. Utilizing the technology and services available to them from their spend management solution provider, their RFP events are more strategic and have uncovered savings they would not have been able to leverage in the past. “We’ve already seen a 30% drop in total freight spend and our ROI dropped from 18 months to four months. We are finally leveraging transportation as a differentiator and not a cost bucket,” concluded Beach.

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Aberdeen Insights — Technology

The adoption of technology to support the transportation spend management process has grown steadily year-over-year. Because there's been an increase in the awareness of the true cost of transportation and more direction from the top down to do something about it, companies are turning to vendors to help manage the complexity.

At the same time, if you break down the details of where the increase in automation has occurred and where the focus has been, most companies are directly engaged in analyzing key spend data and using it as part of a more collaborative and dynamic bidding process, as well stressing collaboration during the audit and payment process for improved root cause analysis. To address these key areas many are looking to best-of-breed solutions to fill these needs.

Best-of-breed solutions may be tailored for the needs of a particular industry, or offer specialize features that fill a unique requirement. Companies choosing this route should be aware that they will need to take greater responsibility for application integration. Conversely, Transportation Management Software Suites may offer all of the required capabilities from a single vendor, but may not have certain best-of-breed features. There is no right or wrong approach - but companies should understand the trade-offs with each method and be comfortable with them.

A company with limited resources might consider working with a vendor that also offers managed services, one that has the ability manage the day-to-day processes initially or can help run the first carrier bid. Then, if it is desired, the shipper can wean itself off of the services and bring the processes in-house. Still others have found success in outsourcing both procurement and payment. The options are varied and successes are found in each technology/management solution.

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Chapter Three: Required Actions

Laggard Reasons for Not Investing in Technology:

√ 36% software integration is too difficult / expensive

√ 33% upfront costs of changing processes are too high

√ 27% up-front costs of solution too high

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:

Laggard Steps to Success • Integrate and automate. Over 45% of Laggard companies rely

on spreadsheets to manage the procurement and payment processes. The delay in decision making and error rate associated with managing a manual paper trail can increase the underlying costs of managing transportation spend.

• Focus on value-add instead of punching the clock. The manual labor needed to manage paper processing of invoices is driving up the cost of managing spend and Laggard companies are expending the most at almost $24 per invoice. By automating or outsourcing the audit and payment process, resources can be utilized for more valuable activities like root cause analysis and bid optimization.

• Incorporate a global view. Working to get control of transportation spend data is the end-goal, however it's more important to get visibility and organizational control across the entire organization and remove the silos. Only 24% of Laggards have data visibility at a global level, and only 6% can share that data with external partners. Combining data into a global view will greatly increase spend analysis value-add opportunities and sharing with external partners will drive better performance.

Industry Average Steps to Success • Continue to leverage technology investments. The adoption

of procurement and payment related solutions has increased by roughly 50% in the last 12 months for the Industry Average and there are new SaaS options out there. Continuing to rollout process automation to free up resources and decrease the cost of managing spend is the next crucial step for executives.

• Data analysis: the next frontier. Less than a third of Industry Average companies are leveraging spend data visibility at a global level. Automating the processing of spend data is less than half the battle. Only 43% of Industry Average companies currently benchmark rates against community/peer data to track key trends. Leveraging transportation spend data and technology to automate the RFP process can greatly reduce year-over-year contract spend.

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• Is outsourcing right for you? The argument continues as to whether or not outsourcing is the best process improvement when it comes to managing freight audit and payment. With more complexity being associated with compliance guidelines and the lack of time and resources available to manually audit and process thousands of bills per month, outsourcing should be considered a viable option. Only 35% of Industry Average companies are outsourcing today.

Best-in-Class Steps to Success “A key reason for our success has been that senior management has allowed us to select the right tools for the job at hand.”

~ Ann Deming, Transportation Manager for Dry Truckload

Freight, Unilever

• Create closer partnerships with strategic carriers. Utilizing data to improve collaboration with carriers can increase savings and improve contract rates. Less than 10% of the Best-in-Class are leveraging spend data visibility and sharing with external partners, especially carriers. Sharing critical data can increase the collaboration during the bidding process and provide carriers with the opportunity to suggest alternative routes or negotiate rate options, lowering overall costs for both parties.

• Implement scorecards to guide sourcing decisions. Once the true costs of freight spend are uncovered, score carding at a higher level can help drive further cost reductions. Rather than getting too lost in the individual charges, placing a score on each route and working to reduce the overall average cost per route can greatly improve savings and overall spend management. Currently less than 30% of the Best-in-Class are attempting to negotiate all-in rates for freight options.

• Enforce compliance measures that benefit strategic goals. The Best-in-Class are utilizing more guidelines to measure carrier compliance, and also tracking their own compliance levels. With improved automation and data visibility there is an opportunity to put more strategic measures in place (on-top of common measures like on-time delivery or payment) to drive per-route scores and balance transportation spend across all routes in an effort to drive strategic business decisions. Currently, on-time delivery (92%) and invoice accuracy (88%) are the top measures in place - others can be advanced to these levels.

Aberdeen Insights — Summary

The volatility and complexity in the world of transportation will continue to grow exponentially and every company is looking for ways to sustain costs. With this the case companies are continuing to gain transportation spend control.

continued

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Aberdeen Insights — Summary

Closed loop transportation spend management is no small undertaking, but it is an important concept that should be the end goal of any company struggling to contain logistics costs. In order to avoid tunnel-vision, and focusing on only one link in the loop, it is necessary to have an executive level sponsor to tie disparate departments and processes together. Two very viable technology approaches are available (best-of-breed and application suite) and companies should evaluate both routes before deciding on the solution that is the best fit for their needs. Additionally these capabilities are available through Logistics Service Providers (LSPs). The benefits to having a closed loop process range from reduced freight spend to lower administrative costs in the accounts payable department - key accomplishments for any supply chain executive. While their peers focus on cost cutting in more traditional areas of logistics like load planning and routing guide compliance, innovative companies can achieve Best-in-Class status by focusing on transportation procurement and payment and tying these processes together in an efficient closed-loop process.

The grace-period we're enjoying now will provide organizations around the world with the opportunity to step back and ask the critical questions about their own ability to fully understand supply chain costs and whether they're still operating a fragmented or a strategic closed loop transportation spend model. Many organizations want to think their supply chain is strategic and that the cost of producing and / or delivering products to their customers is in control and operating as efficiently and cost-effectively as possible. Many of these same organizations were caught off guard during the economic downturn and were not prepared to answer the question on what was "actually" spent on transportation.

Supply chain executives want to be strategic and drive value. Getting costs under control has always been a goal. Understanding and managing transportation costs will be a significant competitive advantage going forward; it will separate companies that survive from companies that cease to exist.

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Appendix A: Research Methodology

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.

Between January and February 2010, Aberdeen examined the use, the experiences, and the intentions of more than 230 enterprises using transportation procurement and payment solutions in a diverse set of enterprises

Aberdeen supplemented this online survey effort with interviews with select survey respondents, gathering additional information on transportation procurement and freight audit and payment strategies, experiences, and results. Responding enterprises included the following:

Responding enterprises included the following:

• Job title: The research sample included respondents with the following job titles: CEO / President EVP / SVP (16%)

• VP (8%); Director (20%); Manager (37%); Engineer/staff (6%); and other (12%).

• Department / function: The research sample included respondents from the following departments or functions: procurement, supply chain, or logistics manager (70%); IT manager or staff (7%); sales and marketing staff other (12%); and senior management (7%).

• Industry: The research sample included respondents from; Consumer Packaged Goods (CPG) (24%); OEM Equipment Manufacturers (19%); Wholesale Distribution (18%); Retail (11%); Services (5%); and other (5%).

• Geography: The majority of respondents (68%) were from North America; Europe (16%) Asia-Pacific region (12%) and others (3%).

• Company size: Twenty-two percent (22%) of respondents were from very large enterprises (annual revenues above US $5 billion); 25% of respondents were from large enterprises (annual revenues above US $1 billion); 34% were from midsize enterprises (annual revenues between $50 million and $1 billion); and 19% of respondents were from small businesses (annual revenues of $50 million or less).

• Headcount: Twenty-six percent (26%) of respondents were from very large enterprises (headcount greater than 10,001 employees); 25% of respondents were from large enterprises (headcount between 2,501-10,000 employees); 35% were from midsize enterprises (headcount between 101 and 1001 employees); and 14% of respondents were from small businesses (headcount between 1 and 100 employees).

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Table 5: 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, February 2010

Table 6: 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, February 2010

Table 7: 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, February 2010

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Appendix B: Related Aberdeen Research

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

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

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

• Achieving Closed-Loop Transportation Spend Management, January 2008

• The International Transportation Management Benchmark Report, October 2007

• Integrated Transportation Management—How Best-in-Class Companies View the World Differently, June 2007

• Winning Strategies for Transportation Procurement & Payment, February 2007

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])

Since 1988, 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 2.2 million readers in over 40 countries, 90% of the Fortune 1,000, and 93% of the Technology 500.

As a Harte-Hanks Company, Aberdeen plays a key role of putting content in context for the global direct and targeted marketing company. Aberdeen's analytical and independent view of the "customer optimization" process of Harte-Hanks (Information – Opportunity – Insight – Engagement – Interaction) extends the client value and accentuates the strategic role Harte-Hanks brings to the market. For additional information, visit Aberdeen http://www.aberdeen.com or call (617) 723-7890, 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. (071309b)

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Featured Underwriters This research report was made possible, in part, with the financial support of our underwriters. These individuals and organizations share Aberdeen’s vision of bringing fact based research to corporations worldwide at little or no cost. Underwriters have no editorial or research rights, and the facts and analysis of this report remain an exclusive production and product of Aberdeen Group. Solution providers recognized as underwriters were solicited after the fact and had no substantive influence on the direction of this report. Their sponsorship has made it possible for Aberdeen Group to make these findings available to readers at no charge.

TMW Systems offers a uniquely capable and cost-effective platform for the delivery of tailored TMS solutions to shippers and 3PLs that want to control their costs and improve visibility to their domestic surface transportation execution. TMW Enterprise Transportation Software (ETS) and Optimization Software are designed to address the detailed planning and execution processes for shippers primarily concerned with domestic surface transportation activities—especially in combination with private fleets—and for 3PLs managing commercial carriers and assets of their own.

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Email: [email protected]

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U.S. Bank, a leader in corporate payments, is the world’s leading freight payment provider. Through Syncada by Visa (formerly PowerTrack), a business-to-business payment network offered by U.S. Bank, clients benefit from a comprehensive global invoice processing and payment solution. Integrated supply chain finance allows carriers to get paid sooner, while shippers pay later. Robust pre-pay audits on 100% of invoices ensure accuracy. On-line, real-time, collaborative exception resolution further reduces cost and waste. The resulting data provides unmatched visibility to cost and performance to optimize your supply chain. Improve cash flow, eliminate paper invoices and checks, and streamline your process today.

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Company URL: www.powertrackglobal.com

[email protected]:

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