A STRATEGIC IMPERATIVE FOR RETAILERS

Reduce Freight SpendHow to Manage Global Transportation Spend with a System that Increases Agility, Control, and Ability to Measure Performance

Today, it’s difficult to decide on the best allocation of

freight funds. It’s also a challenge to manage data from

each partner once they have been chosen. With so

many carriers and logistics providers involved in a

global supply chain, retailers struggle to form a single,

high-definition view of rates and other transportation

data. They must attempt to gather information from

each partner’s proprietary system or ERP software.

Traditional transportation management systems are not

up to the task of managing freight spend in global supply

chains. They come with a high cost of ownership and

long implementation times, with persistent visibility gaps

along the way. In an increasingly complex global trade

environment, retailers are having trouble lowering

transportation costs while still providing quality service.

DC / Warehouse

Plant Customers

With a complex transportation plan, retailers need a way to see

data from all of the parties involved.

Impact of Poor Freight Management

Without a system to bring transportation spending and

management to a single control layer, retailers have

limited ability to make sure the money they spend is

going to the right carriers and partners. They also have

little insight into how contracted rates and estimated

costs compare to the real thing. They experience:

• High costs due to expedited air freight

• Money wasted due to limited agility

• Poor ability to rate carriers and measure compliance

• Inability to measure KPIs — actual vs. plan

The Root of the Problem

Transportation providers charge varied rates in varied

scenarios, managing their operations on proprietary

systems. This, coupled with the need for many modes

of transportation in regions worldwide, makes it hard

for retailers to optimize their spending.

1. Rapidly changing global transportation market

Today, a major challenge in managing freight

spend is dealing with changes in the market. When

capacities, fuel costs, and new processes quickly

shift, costs must be allocated to reflect new carrier

abilities. These rapid changes cause:

• Increasing number of small shipments with tight

delivery timelines

• Disparity between processes of different carriers;

some manual processes, some in-house software,

some ERP

2. Growing number of carriers and service providers

in a single supply chain

As supply chains grow, so does the number of parties

involved in shipping a product from one place to

another. Each participant has its own way of operating,

and each stores data in its own system. This causes:

• Higher chance of miscommunication

• Greater landed cost accrual

• More data needed to compare rates and choose

the best allocation

The Challenge

Retailers must keep transportation costs as low as possible without sacrificing service levels.

Retailers can reduce freight spend by adopting a system

that provides both a platform and functional modules to

gain agility, control, and the ability to measure perfor-

mance. This solution provides a control layer that

connects to all of the separate TMS systems a retailer

might be using with their logistics providers, bringing

the isolated data into a single system. They can use

this data to compare rates and monitor performance,

adjusting freight spend accordingly and lowering costs.

Enterprise

Extended Enterprise Visibility and Control Infrastructure

TMS Control Layer

Supply Demand

TMS-3 TMS-4 TMS-1 TMS-2 TMS-5

In the cloud, all transportation data is brought to a single control layer.

Deploy a global transportation management system

that brings all data to a central location.

• Integrated transportation sourcing, planning, execution

and FP&A

• Control layer that includes native capabilities of

sourcing, rating, planning, tendering and freight

payment and audit

• Rapid implementation and flexible configuration

• Series of performance analytics to measure

compliance to plan

How to use it to reduce freight spend:

1. Reduce freight costs through improved sourcing

and execution process

2. Identify “at risk” orders and minimize modal/

service shifts

3. Use milestones to measure performance on

specified business rules

4. Run unlimited what-if scenarios to optimize spend

Value Propositions

By handling transportation in the cloud, retailers can

manage freight rates and spend on a single platform.

Benefits include:

1. Reduce transportation costs

• Lower rates through improved sourcing

• Reduce cost with optimal mode and carrier selection

• Eliminate overpayment via pre-audit of freight bills

2. Set consistent processes for all partners

• Eliminate inconsistencies by 3PLs

• Measure and report across all providers

3. Gain deployment flexibility

• Roll out functionality as desired, by business unit

or region or both

4. Collaborate for more effective planning

• Prioritize or postpone shipments based on demand

• Use multi-vendor/multi-port consolidation

• Increase equipment use

Reduced Freight Spend and the Networked

Company

To reduce and optimize freight spend, companies must

transform themselves from silo-based, inward-facing

corporate operators to interconnected, highly agile

business network orchestrators.

NetworkConnectivity

Agility

B

A

Sense more accurately

Operate more e�ciently

Respond faster

Make better decisions

The SolutionWhen information on rates and

service is isolated into separate silos,

there’s no clear picture of where the

money is going.

GT Nexus provides the cloud-based collaboration platform that leaders in nearly

every sector rely on to automate hundreds of supply chain processes on a global

scale, across entire trade communities.

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