At the Heart of… Logistics Sourcing and Procurement
Logistics sourcing as well as procurement have changed a lot over time. Back in the day, it consisted of going through a list of different carriers and their prices in search for the best option for your freight transportation. Today, these long lists are gone (and if they’re not then you should continue reading and consider throwing them away), and have been replaced by a strategic set of tasks that will allow you to find the right carrier, at the right price and at the right time, on the shortest route, for the specific type of merchandise you have, with the least possible carbon emissions, along with the assurance that your goods will arrive at the appropriate time to ensure your customers satisfaction and retain their loyalty.
Sounds tricky right? It is indeed, unless you have someone or something sorting all this information out and selecting the winner for you.
Why is transportation sourcing and procurement increasing in complexity?
As you are aware, global markets and trends have changed considerably, and continue to change, sometimes overnight. All past events and conflicts, worldwide, have led to alterations to the way of doing business and have affected every part of global supply chains.
To stick to the not-so-distant past, the pandemic and the political conflicts have contributed immensely to the change in consumer demand and behavior, in price and routes options for transportation, in availability of drivers, and in the prices of goods, gas and oil, among many others.
Further, consumers nowadays want less but faster; their loyalty is not a sure thing, and one wrong move can make them turn their backs and go to the next best option. In addition to the pressure of delivering the right product on time, you need to do it at the most competitive price and with an eye on sustainability that is now, more than ever, a decisive criterion.
Circular economy, the volatility of the markets, sustainability and customers’ expectations also had a pronounced effect on supply chains and more directly on transportation processes. And all these factors, along with the previously noted ones, intertwine in a giant web that men alone cannot untangle.
The choice is yours
When it comes to shippers and carriers, the options are numerous. Whether by sea, land, or air freight, you can have your pick, but you need to be certain that your logistics procurement is the right one. So how do you determine your choice?
When time is not your friend and you have to take a decision fast, relying mostly on your past experiences and knowledge, how can you be sure that you made the right deal and that you couldn’t have found better elsewhere? The answer is simple, you can’t… unless you take a proactive approach to procurement and use technology. Chose the right procurement software for your freight procurement..
Diving into the digital era with freight procurement software
Sure, freight sourcing and procurement are responsible for acquiring carriers and transportation services for an organization, but they are also responsible for building and maintaining an effective supply chain to enable this organization to consistently deliver goods and services to its customers while remaining competitive and making a profit.
Effective freight procurement management is extremely important as it lowers your overall operational costs by purchasing the best option of services you need at the best available price. This level of efficiency is characterized by complete automation of your operational tasks and can only be achieved with the use of the right technology. A Transportation Management System will grant you visibility into all your transportation activities and streamline your processes, giving you control from inbound to supplier, in one single platform.
Alpega TMS is a collaborative and modular platform that offers transportation management solutions, among which a sourcing software that puts an end to the tedious tasks that make the sourcing and procurement processes. It enables smart decisions to help organizations leverage their supply chain excellence by standardizing sourcing requirements, evaluating the data, and sharing information with the different stakeholders.
TMS optimizes the carrier procurement process by defining the most efficient transport schemes in relation to given parameters. Through the prioritization of parameters such as cost, number of stops, percentage of on-time delivery etc., TMS automates the procurement process while revisiting past shipments so as to quickly and competently match similar loads to the appropriate carriers.
For larger projects and strategic freight procurement, TenderEasy from Alpega TMS can run exercises such as spot bidding for single shipments, all the way to complex tender events for long-term contracts, supporting the complete tendering process with RFQs, repetitive bidding, and full scenario analyses. Alpega TMS contributes to the competitiveness of a business’ supply chain by analyzing data and previous procurement activities to identify the best carriers for each lane, taking into account several aspects from the lifecycle of the goods to the corporate strategy, including customer needs and the relationships with suppliers and carriers.
Long story short: strategic sourcing is a challenging and usually long process, filled with time-consuming tasks like emails, calls, and data collection from several sources, but with the right system it becomes an asset to business growth and development. So, if this doesn’t make you shred your excel sheets what will? Bid your manual tasks farewell and automate your processes to gain time and efficiency, in addition to a significant competitive advantage while keeping your customers satisfied!
If all this resonated, discover our sourcing and procurement solutions now or contact us, one of our experts will gladly assist you.