By Venu Gadde | Senior Consultant, Transportation | Chainalytics
A typical transportation sourcing process involves the following: a bid tool or platform which collects rates from suppliers, data exportation into Excel for supplier analysis and feedback, and finally, the Negotiation and Awarding stages. However, this article will focus primarily on the tools aspect of the sourcing process.
While bid platforms have evolved by leaps and bounds by taking advantage of Web 2.0, the Excel piece remains intact. We certainly think Excel has its place in sourcing process; however, plugging in a platform, such as Tableau or a similar program, at the right junctures will provide sourcing managers with better insights to supplier behavior.
Transportation networks have become increasingly complex in the last few years because of secular changes in consumer behavior and M&A activity. Depending on mode of transportation and region, shippers are sourcing tens of thousands of lanes from hundreds of suppliers in a multi-round bidding exercise. If shippers want to finish the sourcing process efficiently and on time, they need a tool to better visualize supplier behavior; certainly more rows of data in Excel will not help.
After analyzing hundreds of sourcing events, we’ve found that developing an analytics dashboard that sourcing managers can use throughout the procurement process to monitor carrier behavior, incumbency and the impact various what-if scenarios have on spend is a critical component of the process. With minor tweaks, the dashboard can be adapted to any shipper from any industry. The examples below are geared towards a CPG client and Full Truck load mode.
Let’s say that you want to understand the split between Asset and Broker carriers of your inbound volume because you want to stay within an upper limit for brokers. There’s a chart for that! More importantly, you can scope this exercise to a particular site, city or overall network within your dashboard.
Let’s take another example, in which for the scenario you selected above, you want to understand the high level savings by region. You may be trying to make sure a particular location is not taking on a substantial cost increase. The platform allows you to drill down on locations and analyze the costs associated with them.
Another interesting example allows you to visualize all your high volume lanes. There are filters to help you narrow down the network based on lane owner, annual volume or distance or any other factor. This level of visualization allows you to quickly understand the scale of your transportation network.
For many of sourcing events we’ve been involved in, we have developed a full-fledged dashboard with 15 different screens like the ones shown above to help clients narrow down carriers during rounds, understand impact of various scenarios on spend and other parameters such as IM vs TL, Asset vs Broker etc. The dashboards are all interactive; clicking on a data element will refresh the entire worksheet, allowing you to drill down an interesting question. Developing the dashboard has been pivotal during the sourcing optimization event.
As logistics consultants, we have seen various technologies utilized during these events and have implemented new platforms or utilized a client’s existing software to garner the best results. Many of the platforms we have encountered are customizable to a specific client and industry. If your organization has a sourcing event scheduled on the horizon and seeks a platform to help you better understand what is happening in your network, you may want to consider supplementing your optimization strategy with the additional analytics made available through a data visualization platform.
Venu Gadde is a Senior Consultant of Chainalytics’ Transportation Competency and well-versed in conducting large international logistics sourcing events.
