Supply Chain Supply Chain
Supply Chain
Supply Chain
Supply Chain
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Aptitude4 Library

Aptitude4 a company that understands your supply chain, especially in today's economic environment. We provide solutions to solve challenges and improve your bottom line. Our consulting team members have many years of experience with the core competency and knowledge to help with supply chain strategy, leadership, process improvement and cost reduction. We are a solution provider with excellent project management skills that can help your company's competitive advantage.
Services Menu
Sharing the Load, Collaborative Transportation
Rate and Wrong, Consumption Based Fuel Surcharge
Finding The Win Win Deal, Freight Negotiations
Fuelling Your Supply Chain, Inbound Freight Programs
Green Your Logistics, Reducing Emissions
Out Of The Woods, Lean Logistics
Putting Out the Call, Request for Proposals
Affordable Supply Chain Technology, Transportion Management Systems
The primary change which occurs in an IFP is taking the vendor's LTL (less than truckload) shipments which originate in the same area/zone & combining them into a TL (truckload) shipment. The LTL shipments which are likely handled by a number of different carriers are consolidated with one (1) carrier creating leverage/buying power to negotiate a better rate. This changes the payment terms for the freight from prepaid to collect meaning that the vendors are no longer responsible for the payment of the transportation costs which has been built into the line item cost. The IFP company negotiates a discount/refund for the transportation portion of the line item cost which will be used in part to pay the carrier. But this is only a small part of the savings derived from an IFP.

Sharing the Load

Collaborative Transportation

With today's focus on reducing costs and protecting the environment, the time for collaborative transportation management may be here.
Canada, the second largest country in the world - about 5,000 km from Vancouver to Conception Bay - is one of the most challenging, high-cost countries in which to distribute goods.
Forty-two percent of the population inhabit five urban areas where manufacturing and distribution facilities face common transportation challenges. Meanwhile, disproportionate shares of transportation resources are required to service the balance of the population, scattered over 10 million square kilometers. The situation dictates a high use of less-than-truckload delivery, and all-too-frequently, pick-up and delivery trucks simply aren't full.

Rate and Wrong

Consumption Based Fuel Surcharge

Fuel needs to be a flow-through consumption-based charge - a system that would fair for everyone.
Fuel costs are the largest ongoing financial concern for both carriers and shippers. Fluctuating fuel costs create challenges for companies to remain on budget, which ultimately impacts bottom lines.
The current recession has tempered the volatility we've seen creating chaos in previous years. Rack fuel prices this year have been trending between $0.692/litre and $0.792/litre, according to Freight Carriers Association (FCA) data. The truckload rate for fuel surcharges ranges from 16% to a recent high of 21.4%. Compare this to July 2008 when fuel peaked at a rack price of $1.33/litre with the truckloads surcharged at 49.9%.

Finding The Win Win Deal

Freight Negotiations

Freight negotiations don't need to be like poker games, where only one side can win the pot.
Negotiation is something logistics professionals will be called upon to conduct many times throughout their careers. It comes with the territory. Successful negotiation is essential in business - especially when the economy is struggling. Everyone strives for the best value and the lowest costs when obtaining the best service possible.
Unfortunately, however, when it comes to freight negotiations, many companies specialize in the "win-lose" approach - a positional or distributive negotiation whereby one party's gain is another party's loss.

Inbound Freight Programs

Fuelling Your Supply Chain

When purchasing and transportation come together they are not only helping to improve operations, they are also contributing to the bottom line.
One of the hottest trends in business by large corporations is Inbound Freight Programs. Most perceive this program as a means to reduce costs by capturing the transportation component included in the line item price by receiving a discount or refund from the vendor which creates a revenue stream. The revenue stream is then applied to the costs of transportation for the goods which returns a margin due to their buying power with their carrier(s) of choice. At Aptitude4 our perception of an "Inbound Freight Program" has more opportunities then the transportation savings.
With today's environmental concerns, many companies are adding GREEN programs to their corporate initiatives. IFP's are very beneficial to reducing your green footprint. Consider the distance travelled for eight (8) orders/ individual shipments from the same area to the same destination versus one (1) shipment of eight (8) consolidated orders. A reduction in greenhouse emissions of 87.875%. Expand this further to long distance shipments being consolidated & moved using alternative modes of transportation which allow for greater weights such as ocean, rail or heavier class trailers & the percentage of reduction will increase exponentially.
Although the environmental benefits are well worth considering an IFP, the main objective is to reduce costs & improve the bottom line performance for the company. Many of the cost benefits are not as visible as the direct savings in transportation. The costs that are impacted by an IFP can range from administration to insurance premiums. As an example, by reducing the number of trailers required to transport the goods the IFP company has reduced the amount of yard traffic in & out of the receiving location. With less traffic in the yard the cost of errors or incidents will be greatly reduced which could add further savings through a reduction in insurance premiums. The following is a short list of other areas that could be impacted by an IFP:
1) reduction in yard personnel required for shunting the trailers to & from the receiving doors
2) reduction in receiving personnel required for unloading the trailers
3) less requirement for/better usage of square footage demands inside the receiving facility
4) reduction in administrative personnel/time to manage the number of appointments
The list above demonstrates that an IFP really falls under the roles and/or responsibilities of the Supply Chain Management group. Taking this further the IFP company can gain additional efficiencies & savings by planning their inbound freight within the movement of their outbound freight. By adding pickups to their deliveries an IFP company shares the cost of the inbound and outbound freight. The cost of a round trip is substantially less then the cost of each as an individual by removing the empty mileage component. In rough terms the current cost for delivering the goods to market would be halved or, in other words, virtually free as the inbound freight for which the company is receiving a benefit from the vendor would be sufficient to pay the bill. Round trips will also add benefit to your green emission reduction by utilizing the same mileage travelled for both pickups & deliveries.
Currently business requires companies to be data savvy. Many companies have become very good at managing the data that they are responsible for, outbound. Since they are not required to pay the bill for the inbound freight the information that should be managed today is treated with the same regard, not our responsibility. Finance departments need to be aware of the company's revenues (in) & expenses (out) in order to present realistic numbers for their executives to make educated decisions. It only makes sense that the Supply Chain Department needs to monitor both sides equally as well & a properly executed IFP will create an environment that balances the information between inbound & outbound freight movement. By becoming more data/ information savvy the Supply Chain Management group will have better control & understanding of inventory lead times & levels which leads to better planning & improved bottom line performance
One of the concerns with an IFP is the impact it has on vendor relations. Many vendors perceive an IFP as a negative as it will reduce the amount of freight they have to negotiate competitive rates with their carriers & reduced revenue in the amount of the freight allowance. Vendors will also derive benefits from the IFP which in many cases will outweigh their concerns. Administrative costs will be reduced by the amount of time it takes to plan for, contact & expedite the shipping of the orders plus the costs associated with verifying the charges, processing & payment of the carrier's invoices. In some cases the need for a transportation department of their own may be reduced or eliminated. Some additional costs that will also be reduced are late delivery charges, waiting times by the carrier & damaged goods in transit to mention a few. The reduced revenue is not a valid concern as the negotiated freight allowance should be a direct ratio of 1:1 with the current transportation cost being paid by the vendor today.
Most of us are aware of Customer Service but what about Vendor Service. Creating a proper IFP will foster an environment that will grow your relationship with your vendor. To optimize your IFP purchasing will need to adjust stock replenishment based on the best mode, method & cost. The best information source for understanding the product lead-times & optimal packaging is the vendor. Working more closely with the vendor in the planning stage will enable the IFP company to reduce inventory levels creating more turns & increase working capital, reduce transit times & improved appointments for pickups, in other words, Vendor Service.
These are a few of the points which are important to Aptitude4 for you to consider & why we feel confident in providing you with a successful Inbound Freight Program!!!

Green Your Logistics

Reducing Emissions

GHG emission reductions must be tackled the same way you achieve safety in the workplace. You need to implement a strategic plan and stick to it.
10 ways to reduce your environmental footprint and improve profitability.
Many companies talk about reducing greenhouse gas (GHG) emissions, but too often there's a large gap between words and action. Most companies seem to be holding off on taking any real steps to reduce their environmental footprint because they believe the investment cost is too high.

Out Of The Woods

Lean Logistics

Lean logistics will help any company - during hard times and hay-days alike.
Recent business reports indicate that the recession is over. This may be the case for some leading companies, but not all. Many businesses are still just barely holding their own. Others are in obvious distress. They'd take great exception to overstated optimism.
The true sign that we've come out of the recession is when businesses begin adding full-time jobs again. This will restore consumer confidence and spending. But even then, we will have to continue applying lean principles to our logistics operations.

Putting Out the Call

Request for Proposals

Requests for proposals and quotations show suppliers that you're organized, impartial. and growing.
Generally speaking, logisticians at small- to mid-size logistics firms make too little use of standard Requests for Proposals (RFPs) and Requests for Quotations (RFQs).
Both are important parts of the logistics buying process, allowing potential suppliers to join the competition to provide a business with goods or services. The issuer makes available the specifications and requirements to several candidates, and then waits for the competitive responses to be submitted.

Affordable Supply Chain Technology

Transportion Management Systems

Transportation Management Systems (TMS) over the internet allows any company, regardless of size, to obtain the benefits of a good transportation management system.
Not long ago the high cost of Transportation Management Systems meant they were used almost exclusively by large shippers and carriers.
Well, things have certainly changed - especially with the advent of "software as a service" or SaaS as it is commonly called.
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