BY ERIC JOHNSON | AMERICAN SHIPPER | Successful transportation benchmarking depends on proper alignment with a company’s strategy goals.
Harding said Chainalytics’ benchmarking proposition is tied to a few key pillars: that there is information available that can enable companies to change the way they have done things; that it’s key to use tools that accelerate the process; that transportation buyers must be able to communicate what they’ve learned internally and externally; and that benchmarking allows a transportation buyer to aggregate industry expertise from across the group.
“The first area of focus is giving you the information you need to transform your business,” Harding said. “As a manager of transportation, I can change aspects of what we do. I can change carriers, how I compensate for fuel, what accessorials we’re charged. There are half a dozen levers to transform the business.
“Big data is a noun. It’s stuff. It’s not action. That’s where big data gets lost. The piece that’s missing is, what are those business levers, and under what conditions would you change them? Maybe I have a critical partner giving us critical service and I’m over benchmark on the rate, but maybe I don’t do anything different. Maybe if I’m below benchmark, I invest more with them,” he explained. The second issue is the speed with which companies can use the information they have at their disposal to make informed decisions about transportation procurement. “Companies only have a finite amount of attention they can take away from running their business to focus on analytics,” Harding said.
“The idea is to give the transportation buyer more time to make decisions.” The third area Harding noted was communication. “You have to be able to communicate to everyone from marketing in your company to the carriers you work with,” he said. “When you manage $100 million in spend, there is a huge requirement to explain your decisions. If you do that within your four walls, there will always be skepticism.
For example, if you have the sense that rates are going up, your carriers are not going to tell you otherwise.” Finally, Harding emphasized the benefit of learning from a group of practitioners with similar objectives and pressures. “The notion of a consortium where you are within a group of buyers, is that consortium in itself has centuries of business
