Many companies use Excel to make complex logistics awards.
There are procurement professionals who have developed spreadsheets that can handle logistics awards but there are limitations and risks.
- Time – complex bids can often take a week or longer to analyze
- Vulnerability – standalone programs are prone to error because they are not subject to universal controls that are available with centralized platforms
- Documentation – spreadsheets are rarely documented properly and when the author leaves the company the knowledge goes with them – – if you have ever tried to understand a formula with 20 nested if statements, you understand the issue
- Less than Optimal Awards – as the number of constraints increases, the limitations inherent in spreadsheets will necessitate compromises in the award – often because it will take too much time to do a deeper dive
- You could create optimal logistics awards in hours not weeks?
- The investment was far less than you have been quoted in the past?
- It was intuitive to use?
- You can connect to your eSourcing platform to easily extract the data to be analyzed?
- You can quickly add data from other systems to the award project?
You are probably thinking – this can’t be possible.
It is and it won’t take months to install either.
Here is a small sample of what is you can do:
- Competitive – assign a minimum or maximum number of suppliers to a buyer-defined item or item group
- Supplier – define minimum or maximum awards to suppliers or supplier groups
- Qualitative – restrict awards, or portions of awards, by item or groups, to suppliers with certain requirements or minimums (i.e. incumbency, diversity, payment terms)
- Quantitative – leverage custom numeric attributes associated with a bid to assign awards (i.e. >50% of award requires lead time less than 4 days)
- Discount – define discounts when certain award levels to a supplier are hit
- Analysis – FTL or LTL mix based on operational demands per pound and distribution location
There are two huge advantages:
- Setting up the baseline normally takes an hour of two – as you add, delete or modify constraints the optimum award can be rerun in minutes
- The impact of each change will build your knowledge base and this information will be invaluable in negotiations and planning
One more important point:
The ability to optimize extends to all complex awards in your organization.
If you want to know more, please use the link below to set up a call. We should be able to determine in less than 30 minutes if this is a tool that can help you. If it is, we can discuss next steps.
Ask better questions, make changes and 2019 will be your best year ever.
Action Step: If you are uncertain where to start the process of change, a procurement professional like myself can provide guidance and expertise to help your organization achieve the results you want.
If you want to go explore this topic in greater detail, please contact me. I invite you to request 30-minute discovery conversation. In my experience the next step will be apparent at the end of the call. I never assume that what I have to offer will be right for everyone, so don’t expect a sales pitch. You can reach me at 973-936-9672.
If you would like to know more ways to reduce costs without changing the way you do business, simply give me a call or send me an email with your contact information and the best time to reach you.
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Until Next Time, I Wish You Great Success in Your Business and in Your Life