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10 INNORoute Savings Strategies:
A Detailed Look
Dynamic Route Optimization Save 10 to 25 % using INNORoute's accurate
up-to-date rates and dynamic transportation planning. Find
out how...
Dynamic routing is a shipping strategy that allows companies to optimization mode
selection, carrier selection and routes at the latest possible moment so that the
most number of shipments can be considered and the most up-to-date rates and discounts
are utilized.
The strategy is motivated by a desire to respond to new transportation demands more
quickly and to avoid the trap of stale business rules. It requires the use of a
transportation optimization system - like INNORoute
- that looks at all the shipments, carriers, tariffs and business rules so that
maximum savings can be identified.
This strategy provides the greatest benefit when tightly integrated with a order
management or warehouse management system. Dynamic routing can improve customer
service by reducing the lead time between placing an order and pickup of the shipment,
thereby improving the chances of rapid delivery. It can also save operating costs
by making it unnecessary to dispatch an additional truck when an existing truck
can service the demand with perhaps only a small deviation in its current route.
A very profitable variation of dynamic routing supported by INNORoute expands the
time horizon by "looking ahead" and considering future shipments that
may be moved up 1 or 2 days to generate substantial savings.
Real-Time Rate Shopping Use real-time-tariffs to select the least-cost
carrier and easily save 10 to 25% . Find
out how...
In many ways, Rate Shopping is the most profitable - and easiest - optimization
strategies, particularly for companies with significant truckload expenditures.
It involves running basic order data - origin, destination, weight, ship date and
mode though the INNORate Rate Shopper to determine the least cost carrier for each
route.
As part of the optimization process, INNORoute rates LTL, TL and even fleet shipments
by carrier, freight class, destination zip code, and weight in order to identify
the least cost carrier for each shipment. INNORoute Rating expedites the processing
of shipments of all modes and sizes.
The INNORoute Rate shopping feature scans all of the carriers and tariffs that meet
all the requirements of the current shipment (destination zip code, class, weight,
etc.).
In interactive mode, the rate shopping utility will then compare and display the
rates for each of the valid carriers on one screen by price.
In optimization mode, all carriers are considered including fleet when building
routes for single-stop and multi-stop routes.
Multi-Stop Truckload Easily build Multi-stop routes for Full Truck and/or
Fleet that can save 40% or more Find
out how...
Multi-stop truckloads are another method of increasing the amount of weight for
a specific truckload movement. The key is to have a minimum number of shipments
so there's a chance of making a significant number of multi-stop truckloads.
Typically, before significant savings can be achieved, daily volume should be in
excess of 20 shipments a day in or out of a location, with the size of shipments
being between 750 and 500 pounds.
INNORoute analyzes millions of LTL and TL combinations to determine which shipments
can best be combined to create the most savings.
Creating multi-stop truckloads can result in estimated savings of from 5 to 90 percent
per shipment.
Mode Optimization Quickly optimize for all modes (LTL, Full Truckload, Multi-Modal
and Fleet) - save 20% plus Find
out how...
Many companies use less-than-effective rule-of-thumb methods such as a proximity
rules or same-direction rules to assign orders to modes. These methods easily overlook
combinations that can lower costs or maximize load weight or cube. Even harder to
exploit are truckload rates that differ based on the final destination. It may seem
obvious to ship Georgia-Arizona-California but the TL rates may actually be cheaper
if you ship Georgia-California-Arizona.
Using INNORoute optimization, the most cost efficient mode every time for the freight
and lane, and differences in destination TL Rates are fully exploited. There can
easily be a 15 percent savings potential on the total budget when the using the
right mode (and right rate) and as much as a 99% percent savings on individual shipments.
Companies that currently use rule of thumb routing rules or other rule based solutions
would be more likely to see the higher end savings.
Load planning - Truckload Weight, Skids and Cube Maximization Minimizing
wasted space on Full-truckload shipments can save 10 to 40% Find
out how...
Companies shipping full truckload can benefit from a weight and cube optimization,
which maximizes how much product can be loaded into a trailer before exceeding the
legal weight limit or before the product cubes out. The objective is to utilize
as much of the space and weight capacity of the trailer as possible on each route.
For example, a truck may be capable of carrying 45,000 pounds of freight, but your
company may average closer to 33,000 pounds per full truckload route. By increasing
the weight or cube on a truck, you not only save money, but also reduce the number
of trucks you need to hire - a real benefit during peak shipping seasons.
INNORoute completes the analisys quickly and easily using real-time order data such
as weight, skids and cube as well as vehicle capacity. It is not uncommon to increase
product on the truck by 40 percent with a corresponding reduction in cost. Generally
speaking, that level of savings will not be achievable through any other initiatives
presented here.
Routing Rules Enforcement (Automated Routing Guides) Enforcing Routing
Guide Compliance with INNORoute saves 5 to 15% Find
out how...
Indentifying savings via rate shopping represents the “low hanging fruit” of least-cost
optimization. Unless you optimize carrier load assignments based on cost and, mode
and capacity you're likely to miss out on profitable opportunities for cost
savings and fail to detect and act on increases in rates. Many times, easily obtained
savings are missed simply because employees are not shopping for the best rate.
INNORoute rate shopping shops across modes and looks at both regional and national
carriers to indentify the lowest rates available. The estimated savings you'll
receive by rate shopping ranges from 5 to 10 percent of the entire transportation
budget, depending on the number and diversity (regional versus national) carriers
you use.
Fleet versus Commercial Carrier Intelligently analyzing fleet vs. commercial
options for each shipment results in saving 5 to 10%. Find
out how...
Many companies ship both local (and regional) using in-house fleet and cross country
using commercial carriers. Typically companies use a mileage diameter rule or destination
specific rule to determine which is best – Fleet or Commercial. This results in
Fleet and Commercial being separated from each other which no possibility of combining
the two. Fleet shipments are then processed by a fleet routing tool and cross country
shipments are shipped by manual methods.
INNORoute uses “least-cost” optimization logic to easily analyze all shipments at
once and determine which mode is best. Many times a regional delivery can be combined
with a cross country full truckload shipment resulting in a nearly cost-free delivery,
except for stop-off charges.
Order Bundling (aka Order Aggregation) Bundling is easy and can save big… 5 to
10% on average Find
out how...
In Order Bundling, shipments from the same origin to the same destination are combined
when they have overlapping shipping and delivery windows. When orders are consolidated,
the result is larger average shipment sizes and in some cases, mode shifts. Those
who service the same customers on a regular basis and primarily ship less-than-truckload
(LTL) and small parcel, those with multiple divisions that ship to the same customer
or those that have many minimum charge shipments benefit most from this method.
INNORoute automatically bundles shipments as part of the optimization process.
Savings are estimated at 5 to 10 percent of the transportation budget. Individual
shipment savings can be as high as 99 percent in cases where two or more minimum
charge shipments are combined into a shipment that still is charged a minimum.
Pool Points or Cross Docking Bypass expensive LTL networks using INNORoute's powerful pooling and easily
save 50% Find
out how...
This involves bringing product to a central location, where it is segmented into
separate orders and delivered to multiple locations. When a high volume of shipments
weighing between 2,000 and 5,000 pounds is aggregated from or is delivered to a
relatively small geographical area, pooling and cross docking allows you to bypass
a relatively expensive long haul LTL network and replace it with truckload shipments
and cheaper regional LTL movements.
INNORoute offers the most thorough pooling engine available, analyzing hundreds
of pool-hub options then building full truckload to those hubs and LTL deliveries
from those hubs.
It may seem obvious to route multiple orders from Georgia to Southern California
via a California-based pooling hub. But it may actually be cheaper to pool via Salt
Lake City. Only INNORoute have the built-in intelligence to determine the best pool
hub and build the full truckloads required.
The estimated savings depend on the size of the average order and can be as much
as 50%.
Network Modeling Analyze – Plan – Execute. It's as easy as 1-2-3 with INNORoute. And it easily saves 10 to
50% Find
out how...
Without INNORoute, this can be the most difficult strategy to implement, requiring
more work, and time and more money. Still, it is the key tool for strategic savings,
since it makes a comprehensive assessment of current and historical transportation
decisions and identifies strategic models for optimizing the entire supply chain.
Larger companies with multiple distribution points that are looking for the next
level of growth or those that have acquired companies recently and haven't looked
at how the transportation networks overlap will benefit most.
It is not an insignificant effort to collect shipment history and rates and to understand
the capacity of various distribution centers. It becomes very complex if an organization
has acquired two or three other companies, each with its own challenges. When multiple
entities are involved, different data sources and different methodologies for accounting
for costs can be at play.
But INNORoute makes it easy. Orders can be imported via Excel and tariffs can be
easily obtained from carriers.
Simply going through the exercise of Network Modeling with INNORoute can result
in significant benefits and advantages. Without common data in a company, there
will be competing data and assumptions. Developing a network model using INNORoute
creates a shared understanding of how the network works and a shared set of assumptions
and data to be used by all teams involved in the transportation process.
For certain companies, network modeling can offer significant savings potential
(20-30 percent is not uncommon). This is huge and meaningful, not just to transportation
and distribution, but to the company's bottom line.
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