Guest Column: Seven Critical Steps To Optimized Supply Chain Management

By Todd Ericksrud, vice president of Global Logistics Sales, Schneider Logistics, Inc.

Transportation is among the largest components of total supply chain costs. Surveys done by the Council of Supply Chain Management Professionals (CSCMP) have estimated that logistics expense represents about 10 percent of the United States gross domestic product, and that transportation spending, by itself represents six percent.

More than ever, effective transportation management requires a thorough understanding of volatile elements like fuel costs, capacity levels and increasing customer requests for tighter, and sometimes more frequent, delivery times. Few companies take the time to maximize efficiencies, yet the financial and operational benefits can be remarkable.

There are several variables when it comes to optimizing transportation spending, but the two main elements continue to be cost and service. Each company has its own requirements, competitive advantages and strategic intentions. The key is finding the proper balance. How does a company know if the time is right to make changes? How effective are its transportation practices?

One of the best places to start is with a transportation bid. Conducting a transportation bid is like running a marathon—success is determined by solid preparation and achieving clear, measurable milestones.