Logistics Planning: 4 Phases of Sustainable Freight Management that Mirror Marketing
This month, as a company, Cerasis challenged our team to write a piece of content every business day in June. Today marks the successful completion of that goal with this blog post. I co-founded Cerasis almost 16 years ago with my business partners, Steve Ludvigson and Robert Johnson, and for the first time in our history last October, we decided to invest in marketing by bringing on Adam Robinson our Marketing Manger. Despite no marketing, prior to bringing on Adam, our company has grown each year since our founding. This is in part to having a great and scalable business model, but also because we survived on old fashioned cold calling and referrals from our current customer base. Doing business that way can be scary if you don't have a great company, but our philosophy is and always will be to have a great company who is focused on continuous improvement and providing value to our customers, vendors, partners, and employees.
We hired Adam because he was directly in line with our beliefs of not simply doing things just to do it. For sustainability and long term ROI in any service provided, whether it be marketing or freight management, there must be (Key performance indicators) KPIs set into place to allow you to track the performance of any segment of your business in order to attribute a tangible ROI on those activities. As he begun to roll out our marketing plans, I noticed the way in which he took great care to take specific steps in informing us in the way in which he goes about marketing. He planned and researched, he created and explained a strategy, then set out specific project plans with tasks, started executing, and then each month began to report on the data. I thought to myself, this is not much different than the way in which a outsourced logistics provider goes about taking over freight management for a freight shipper. I came to realize, there are 4 unique elements to sustainable and bottom line savings freight management that mirror the marketing plans Adam set forth.
Front End Research and Analysis
Any marketer, when establishing or refining marketing plans, must conduct market research. This includes understanding who the target audience is you are trying to reach, what is the message and tone you are wanting to express in your marketing, what's the competitive landscape look like, and what can historical activities and data provide to benchmark various data points to start building KPIs. Much like this, when first establishing a relationship with a freight shipper, a third party logistics company or outsourced logistics service provider must do a freight activity and data analysis. The reason this is done is to intimately understand shipping rates, patterns, and everything related to the shipper's freight, such as auditing old invoices, claims, and customer service issues due to late shipments or inefficient shipping modes. This allows the logistics company to then know what kind of plan to put together that will drive the most value for you. If your logistics provider is not asking for this information from the get go, then the provider will not ever be able to create a strategy focused on results and savings.
Strategy and Plans
Now, after the marketer has understood the lay of the land and where the company stand with historical marketing, the marketing person can create a strategy in order to best reach the right audience to increase brand awareness, leads, and ultimately sales. At this stage goals and specific KPIs are determined. Similarly, the freight logistics service provider should create a custom logistics plan or strategy for your business driven by the previous research and analysis of your freight data and activity. This strategy, based off the data, can yield better freight rates because you can say you do volume in specific lanes giving the logistics provider leverage in fair negotiations with freight carriers. Additionally, the provider can better understand how to mitigate freight claims due to having more knowledge on what causes higher freight damage. Finally, by putting the time into the research phase, the logistics service provider can optimize the way in which you ship freight by putting together pool point distribution programs and more. The key is to have a strategy and specific KPIs set in place BEFORE you start shipping your freight with the systems and services of the logistics provider.
Execution and Processing
With marketing, there then comes the execution phase of the strategy. In today's fast moving world of social media and content marketing, there are many complex tasks and activities that occur every single day in order to reach the goals set out for the plan. In logistics, there are a myriad of tasks, such as processing freight shipment, freight accounting, and of course communication with all parties involved with the freight shipment. These days, a great logistics provider should provide a system or form of technology, such as a Transportation Management System, that increases the ability to scale as you ship more freight by decreasing the time spent on entering the details of your freight shipment, such as the address and name of common receivers of your freight. Integration into your address book and ERP will further drive this efficiency. If you are shipping by LTL freight carrier, the system should also allow you to make the choice between many carriers with rates which were negotiated in the strategy phase. Again, this adds value in the fact that you are not spending countless hours contacting many shippers to get, hopefully, the best rate for your shipment, long term. Finally, a great logistics provider will also provide integrated freight management services such as freight claims management, dedicated customer service to get to know your patterns and activity over time, and of course freight payment and audit services.
Data Analysis and Business Decisions
Finally, any good marketer is data driven. Data is gold when it comes to making decisions that continue to yield the highest ROI. For example, Adam shows us that certain channels of our marketing may bring more traffic to our website, but it doesn't generate any leads. This may be due to messaging being slightly off or perhaps the area in which we are pushing our marketing doesn't contain our desired target audience. Regardless of what it is, the data and reporting allows us to make those types of decisions for our business. Mirroring that thought, a logistics provider who gives you meaningful data and then explains how it's affecting your operations and bottom line will empower you to make better decisions on things like carriers, your commodity choices, or how you package your freight. At the end of the day, if you can't measure it, why do it. This is true in almost any business environment.
I hope the above four elements provide value to you. The above points are valuable on any complex project, but when it comes to the complex world of transporation and logistics, your freight needs to have the attention it deserves by either you as the shipper or your logistics provider.
Let me know your thoughts in the comments below!