Expanding your Parcel TMS Across the Organization
You have invested in a Parcel Transportation Management System (PTMS) to serve your Direct to Customer (DTC) needs, but are you using it across your organization to optimize intracompany shipping, Ship from Store, or drop shipping?
An investment in a PTMS has proven to improve on-time delivery while reducing costs by up to 50%. In addition, the PTMS improves shipping efficiency, visibility, control and agility. Often when a shipper implements a PTMS they even configure the system to meet the needs of their specific business, product, and customer needs. The return on investment is positive in these areas, but for many companies, the benefit is only realized for the mainstream DTC shipping process from Distribution Centers - the full value of the PTMS is missed in other areas of the business.
Even the most sophisticated and successful industry leaders are often failing to use this powerful tool when they ship intracompany, ship from store, or use drop-ship vendors. Not leveraging this investment results in a loss of data, visibility, and control. Given the power of the PTMS, one should ask, "Are there other places in my organization where I could benefit from extending my PTMS investment?"
Following are three scenarios a fulfillment pro may want to explore to fully leverage their PTMS within the organization.
At first glance one may dismiss the intracompany shipping as an edge case with limited volume and therefore not worthy of consideration for utilization of a PTMS. However, if one were to audit the intracompany spend, they might be surprised by the volume of parcels sent between retail stores, from corporate to employees, and between corporate offices. In addition, this audit may show potential savings in shipping costs since many of these shipments are handled by novice shippers using retail rates, and often expediting with no understanding of the cost options.
When implementing a PTMS for Intracompany shipping the benefits can be threefold:
Utilization of Negotiated Rates
Utilization of Multi-Carrier Rate Shopping within one user experience (eliminating the need to shop across each carrier's website).
Centralized data collection with the same power of the reporting available for your DTC shipments
In many cases (even for the largest retailers and B2B shippers), drop-ship vendors are given the preferred carrier, ship method, and often account numbers. At times this information is provided with the individual order, and others it is provided on a quarterly basis. In most cases the only information provided back from the drop-ship vendor is a tracking number.
The challenges with this process are:
Ship methods are fairly rigid and the power of the rate shopping used in DTC is not leveraged. Even if a rate shop was used for the original order when it was sent to the drop-ship vendor, situations like delayed or expedited shipping do not allow for a re-rating that may alter the ship method. (Examples include expediting to meet promise date, or downgrading to save shipping cost when the order is processed faster than expected.)
In most cases, receiving only the tracking information back and storing it separate from the DTC data results in original rating data blindness until the invoice is received. One only has the carrier’s invoice information to know what the rate, dimensions, and accessorial charges were for the shipment, so there is limited ability to audit the invoice.
Limited aggregate views of drop-ship vendor orders across vendors can be troublesome particularly when dealing with hundreds and potentially thousands of vendors. Gaining an aggregate view of current issues and overall performance is often manual and requires a significant data manipulation and analytics exercise that cannot be realistically expected to be real-time.
Ship from Store
In many cases, the Ship from Store process is similar to the drop-ship vendor scenario where orders are sent to a store system that has specific carrier, ship method, and account number instructions. While this system should be better suited to return more robust data than the tracking number, often rate shopping is not available at the store level, and once again this data is often not stored in a manner that allows for the data to be aggregated with the shipping data.
While many PTMS solutions are not enabled to handle these scenarios, many like ScanData can. Often these systems could be used in parallel with the current PTMS used for DTC. When selecting a system to handle these types of situations, one should consider if the user experience is designed specifically for the scenario and if the system architecture can handle these remote locations (i.e., not located in a Distribution Center). In addition, the user experience should be simple and intuitive since users are not likely to be frequent shippers and will need to be able to ship with limited training. Finally, data is power, so every step possible should be taken to consolidate the data from these scenarios in a manner where aggregate monitoring and reporting is possible.
We outlined a few scenarios where a PTMS could be used within an organization outside of the DTC process, and the potential value of using the PTMS for each scenario. This exploration is just a start since every organization has distinct needs and processes to address; there are certainly many more scenarios where a PTMS could be of service depending upon an organization’s unique situation. The key is to leverage the PTMS to its full potential.
We realize this piece is very high-level, and if you’d like to drill down on any of our recommendations, reach out to us with questions or comments. We also welcome opportunities to deliberate or dispute our insights and recommendations. No conversation is off limits.
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