News & Views

April 7, 2009 from Supply Chain Digest – “Companies use all sorts of methods to manage parcel shipments strategies and execution. Some dedicate all, or nearly all, of their business with one carrier, and use the parcel system of that provider…”

180 View (written by Lawrence Young) – This article will help you identify if your company may be able to reduce its outbound freight costs.

If your company is a manufacturer or wholesale distributor, and is considering the installation of new ERP software, there is very affordable software that can not only reduce your outbound freight costs, but at the same time help improve your customer service level.

For example, if you use mainstream carriers like UPS, FedEx or Purolator to ship product to your customers, many ERP software products will seamlessly link your ERP system shipping and invoicing functions to the carrier consoles used in your shipping department to generate bills of lading and shipping labels. Once linked, the carrier’s console will upload the waybill number and freight cost to your ERP software, which can then send an order acknowledgement to your customer and post the freight cost to the invoice, all without any human intervention.

Some of the more robust ERP software available today can even link to Carrier Management Systems (CMS), available from software vendors such as Scancode Systems Inc. ( www.scancode.com ). This is when significant cost savings may be able to be realized. In addition to the benefits noted above, the CMS will also suggest which carrier is the least expensive for each of your shipments. It accomplishes this otherwise laborious task based on each shipment’s destination, weight and cube which is downloaded from the ERP system to the CMS, and using the up-to-date rate tables that it maintains for every leading carrier in the marketplace.

Here’s more good news-you likely can benefit from the above software even if you want to keep your existing back-office software. There may be some incremental integration costs to enable your existing software to be integrated to off-the-shelf CMS software, but the ROI identified by a professional well versed on this topic may more than justify the investment.

So if one or more of the 10 indicators discussed in this article describe where your company is at or where it’s heading, now may be the time to investigate how you can use out-of-the-box and affordable software to cut down on your freight costs.