Supply Chain Supply Chain
Supply Chain
Supply Chain
Supply Chain
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Introducing Aptitude4 Inc.

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

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.
In win-lose bargaining, both parties are in direct competition and there can be only one winner.
Understandably, many people look at win-lose as a kind of game. Indeed, it can be compared to poker in that it is adversarial in nature, with both side trying to win the pot through keen observance of an opponent's weaknesses, and a strategic use of bargaining chips. The big difference, of course, is that win-lose negotiations are not a game. And the stakes are very real.
Poker players like to play their cards "close to the vest," careful not to share information or reveal too much to their opponent. The same is true in win-lose negotiations, where there is minimal disclosures to the other party. Furthermore, buyers avoid giving any clues (or "tells") that would reveal their true position. In fact, good negotiators are known for their poker faces. They 'hold' and 'raise' as necessary with pressure tactics and they pressure their opponents through delays, walkouts, and threats.
How effective is this approach to negotiations? Not very. In fact, it is often counterproductive and does not have any long-term sustainability.
Even when you win in this confrontational style of business, you still lose because the relationship with your counterpart is irreparably damaged. If you win enough your opponent will eventually stop playing the game. No one likes to lose, and they certainly don't appreciate being bullied. As the relationship deteriorates, the winner can expect the tables to turn when their opponent gets even by providing substandard service at lower cost in an effort to recoup losses.
In win-lose negotiations, logistic professionals are taking a short-term view, potentially locking their companies into a narrow range of positive outcomes. Win-lose does not serve the long-term interests of the winner, even in if short-term objectives are achieved.
"Win-win" negotiations, on the other hand, involve integrative bargaining or interest-based bargaining, where the parties collaborate to find a mutually beneficial solution.
In the win-win approach to freight negotiations, both the shipper and carrier are engaged in finding the best solutions to move freight economically. It yields a freight agreement that each party is willing to fulfill.
Successful logistics buyers looking to achieve best outcomes use win-win techniques where both parties in the negotiation walk away with the sense they have accomplished their objectives. Relationships are developed that have a foundation of trust because they are mutually beneficial. At the heart of the negotiation is true cooperative problem solving, cost cutting, customer service, and mutual profit.
This kind of collaborative takes additional work on the part of the logistics buyer.
1. Preparation
This is the most important element in achieving an agreement. and it starts long before you sit down at the table. It involves a lot of data gathering.
First, understand the shipment. What is the size? The weight? The average cube per shipment? What kind of commodity is it? Is it dangerous? Does it have special requirements? Will it need temperature controls? Additional security? Dunnage?
Next, you have to know your customer's requirements. How much will be shipped? How often? What are the delivery locations? What about the dock-side requirements? Unloading equipment at consignee? Dock? Tailgate? Pallet? Hand bomb?
Now, what kind of equipment will be required? Dry van? Reefer? Heated service? Flat bed? Tridem? Tandem?
And finally, what is the service cycle time? What is the best mode of transportation?
Proper preparation will help you understand the implicit costs. Use benchmarking, historical data, industry associations, and the Internet to map out what you need. Based on this information, the shipper can set flexible objectives. They'll consider what would be the ideal situation, the very best that can be achieved. They'll also get a sense of the biggest challenges they'll face.
Preparation also involves finding the right transportation suppliers to negotiate with. Research and qualify the carriers that can provide the services you required. Find out as much about the companies as you can, the lanes they service, their service objectives, their response to damages, their reputation in the market place, the corporate culture they have fostered. anything that will help with the discussion.
2. Exchanging Information
At preliminary meetings with potential partners, a frank and open discussion is the best way to meet objectives. Shipment data is shared and service requirements are discussed. Where the sides differ, their expertise will be needed to improve the cost and service.
3. Making a Deal
When you're close to an agreement, have the carrier provide the full cost and service proposal electronically in advance of the meeting. This allows you to prepare for the meeting. Analyze the quote against current shipping data to understand the value proposition. The meeting agenda should consist of a discussion to understand services, rates, fuel surcharges and ancillary charges, and process improvements.
There is no room now for misconceptions. Don't be afraid to ask the carrier representative how rates can be lowered. Talk about what needs to be done. Never assume the amount quoted is the final price. Most carriers' rates have some "wiggle" room.
The steps you take to improve the transportation deal are important blocks to building a solid relationship. Some concessions may have to be provided, to get lower costs, but it is worth it. Problem solving must be done jointly.
Focus on the issues at hand, don't take positions, and be flexible, using fair business practices. Most important, use reason not control, pressure, or power. Listen to what is being said. Find ways to make your freight attractive to the carrier.
This is true win-win negotiating, and it ensures that in the long run, everyone wins.

Fuelling Your Supply Chain

Inbound Freight Programs

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.

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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