Category Archives: Vendor Review

Need a Truck? BuyTruckLoad.com!

Believe it or not, counter to every nerve in your body, you should be buying a portion of your freight business on the spot market! Take a minute, get those gasps out, and SI will explain why.

Simply put, for the vast majority of product-based companies, freight is the one category that is inefficient from a contract perspective. At first thought, this might not make sense as efficiencies and cost savings typically come from good planning, but this is precisely why you can often get significantly better rates spot-buying your freight than contracting it.

To see this, you have to look at the situation from your carrier’s viewpoint. It is most efficient, and most profitable, when it’s trucks are kept full. Your contracts keep your carrier’s trucks full at most half the time. Specifically, your contracts keep your carrier’s trucks full from point A to point B. Maybe it has a few pallets to take back to point A, but that doesn’t fill the truck, and it’s only efficient (from your point of view) if the carrier waits until the truck is full to take the pallets back. In order to maximize efficiency and profitability, the carrier needs business from point B back to point A. The chances of the carrier getting precisely this business when competing against 70,000 other carriers and only getting called to the bid on one of every 10,000 or 20,000 freight contracts being tendered are probably 40,000 to 1. Not good odds.

Plus, even if the carrier’s lucky enough to get business that geographically fills, say, 80% of the route from B back to A, chances are the timing doesn’t line up right and the truck ends up sitting idle for a few days on a regular basis, which also takes away from efficiency or profitability.

Because of this, and because of the fact that the carriers have to hedge their bets when you ask them to contract three, six, and twelve months out, you end up paying, on average 14%-15% more for contracted freight than you do freight purchased efficiently on the spot market (if you know what you are doing or use a good freight brokerage). In particular, even if you’ve done a great job on your contract, you’re probably paying, on average, over $1,400 for a load that you could get for $1,300 or less on the spot market.

That’s why Sean Devine and John Labrie, each with over a decade of transportation sourcing and optimization (at CombineNet, Emptoris, and Con-Way), built BuyTruckload.com — the first automated truckload brokerage service. This service, built on an advanced real-time truckload optimization model, takes your requirements, searches their database of over 70,000 carriers (and current spot market prices) across the United States (each with an average of 4 trucks), and gets you a quote that is, on average, $100 less than you would expect to get otherwise (buying yourself with a limited selection of carriers), and $200 less than you would if you were contracting months in advance (based on an average truckload price of $1,400+ and an average savings of 15%).

It’s quick, simple, and almost obvious — and that’s what makes it so useful. As a buyer, all you have to do is define the acceptable authority types (contract, common, broker), the acceptable / required equipment types (bus, van, flatbed, refrigerated, dry van, etc. — they allow for 16 different types), the cargo authorities (private, property, etc.), the safety alerts you will (not) accept (unsafe driving, driver fitness, etc.), the required number of power units, and where you need the trucks and the system will identify the relevant carriers. Define your shipping requirements, and it will generate binding quotes. It’s that simple, and if you use the right mix of contract and spot-buy freight, it could save you a lot of money.

Please note that the right mix is key! Even if the 15% savings are there for you, it’s probably not a good idea to put all of your freight on the spot market. You need to know you have enough reserved freight for critical products (at critical times) and carriers need to know they have enough baseline business to sustain themselves. the doctor‘s gut is that you probably want a 2 to 1 ratio between contract and spot market, on average. In some industries and/or categories, this ratio will be higher (because, let’s face it, you don’t care if you get those office supplies a day late), and in others it will be lower. But a 2 to 1 ratio is probably a good starting point.

Decideware: An End-to-End Agency Lifecycle Management Solution Part III

In our first post, we re-introduced you to Decideware, global providers of an end-to-end Agency Lifecycle Management (ALM) solution, with offices on three continents (in Sydney, San Francisco, and London) and quickly overviewed the five core modules of the integrated ALM solution that they offer. Then, in our last post, we dived into the Capability and Scope of Work modules and quickly touched on the briefing module. Today, we are going to dive into the Evaluation and Dashboard Modules.

Evaluation

When it comes to cost, most Marketing agencies have a terrible grip on this issue. Generally speaking, they know what they were budgeted at the start of the year, and what they spent at the end of the year when the Controller or CFO tells them. They do a terrible job of tracking costs by project, and if you asked them budget vs spend vs results for any one Agency, you’ll get a blank stare as if you asked them to explain why the tentative confirmation of the Higgs particle by the Large Hadron Collider is important when it comes to the validation of the Standard Model. It’s not a good state of affairs.

However, if they had a proper Agency Lifecycle Management solution where they could enter all cost information at the desired level of detail, or force the Agency to (if the Agency wants to get paid), the state of affairs is completely different. After every phase, they can find out where they are vs. where they should have been and, possibly with Supply Management’s help, take corrective action.  In addition, they could track feedback and get an overview of the supplier’s running (balanced) scorecard (as this module grew out of their initial Supplier Performance Management offering).

The evaluation module, combined with the reconciliation sub-module (that is tied to the scope of work and collects the quoted cost data) allows an Agency (Relationship) Manager to dive into actuals vs. cost for any time period, at any level of detail, at any time and determine how spending is tracking according to budget. If costs are high, they can drill down into the primary components, and go right down to the resource level and, possibly, determine that Joe, the highly paid creative resource, who was budgeted to work 10 hours, worked 100 hours. They can then determine if this was a data entry error or a grossly inaccurate estimation on the part of the Agency, and use this data in the post-mortem Agency evaluation.

In addition, they can bring up the Agency’s (balanced) scorecard (history) and see (and compare) the Agency’s performance on each phase, for the project, and across all projects.  They can even compare Agency scorecard to see if an Agency is performing average, better, or worse than the other approved agencies.

Dashboard

As noted in our first post, the dashboard, another new module from Decideware, provides a unified interface to all of the modules and functionality contained in the system. From the dashboard, which is designed to work like the user interface to a web-based cube-based spend analysis system, the user can search all of the Agency data, retrieve lists of agencies by geographies, capability, scope of work, and other relevant criteria, and drill down into any data category until they retrieve the (fine-grained) data they are looking for. The best thing about it is, unlike the dashboard offerings of many spend analysis or Supplier Information Management (SIM) providers, it’s almost devoid of fancy graphs and charts. Decideware understands it’s the data that matters and focussed on building an easy-to-use, yet powerful, search, and saved the real estate to display the requested data in an easy-to-understand tabular view with as much drill-down support as you will need.

In addition, from the dashboard, the user can quickly get to all of the reporting functionality embedded in the system, which includes scope analysis reports that summarize resource and fee schedules; organizational analysis reports that summarize costs and actuals; comparison reports that allow the user to compare agencies, fees, capabilities, and functions; and contract generation reports that can generate scopes of work and supporting contracts. (The platform has embedded contract management functionality just like it has embedded SIM functionality.) All of the data can be exported to Excel, and the system can automatically generate work-grids and rate cards.

Overall the system is well-designed and so easy to use that even a Marketer can do it. 😉 So if you want a solution to bring to the Marketing table, make sure Decideware is on your short-list.

Decideware: An End-to-End Agency Lifecycle Management Solution Part II

In our last post, we re-introduced you to Decideware, global providers of an end-to-end Agency Lifecycle Management (ALM) solution, with offices on three continents (in Sydney, San Francisco, and London). We quickly overviewed the five core modules of the integrated ALM solution that they offer, and indicated that we would dive into them in the next two posts. So without further ado, here we go.

Capability

The capability module walks you through the six-step process of gathering appropriate information and approving the Agency as a potential supplier to the organization.

  1. Entity
    The first step is to gather the firmographic data, including the geography, the number of employees, the administrative and legal contacts, the revenues, the primary office locations, and vendor status information
  2. Type
    The next step is to determine the primary, secondary, and tertiary type of the agency. Is it creative, digital/interactive/social media, planning, relationship marketing, public relations, branding, investor relations, etc? An agency can only have one primary focus, and that focus must contribute to 50% or more of revenues to be primary. Similarly, it can only have one secondary focus, and that focus should contribute to 25% or more of revenues. Any additional focii are tertiary.
  3. Specialties
    In this step, a more complete picture of the Agency capability is created through the gathering of supporting data related to market segments, experience, media creation, etc. to fill in a more complete picture of the suitableness of the Agency for the company.
  4. Conflicts
    The next step is to determine if there are any potential categories of conflict for the company. If you’re in Pharma, and they are currently working on a campaign for a new heart disease prevention drug for your competitor, then you don’t want them working on a campaign for your heart disease prevention drug.
  5. Engagements
    What engagements for your company has the Agency worked on, and what engagements is the Agency currently working on? (It’s not uncommon to find out that another Marketing division in another geography is already using another office of the Agency for their campaign!)
  6. Approval
    Once all of the data has been gathered, and an individual with decision authority has decided that the Agency is qualified to work on (select) marketing campaigns for the organization (subject to no conflict), the Agency is approved as a potential vendor.

Scope of Work

The scope of work module walks you through the six-step process of creating a scope of work and approving the scope of work for execution by the Agency.

  • Scope
    Defines the scope of the project being undertaken – duration, geography, contractual details, and summary.
  • Objectives
    What are the objectives? More visibility? Market share? Better brand ratings? And how will they be measured.
  • Work
    The specific deliverables – tv commercial, print advertising, radio segments, etc.
  • Staffing
    The staff available to work on the projects.
  • Costs
    The costs, according to the costing model specified. This is one of the highlights of the Decideware Scope of Work solution. With a custom Excel-like spreadsheet interface, costs can be captured by resource, by function, by campaign, or by deliverable to the desired degree of detail. This not only lets the organization get a grip on what the main cost components are, but how one agency compares in fees and rates to another.
  • Approval
    Once all of the data has been gathered, and an individual with decision authority has decided that the scope of work is complete, a contract is cut and the work can begin.

Briefing

One of Decideware‘s newest Agency Lifecycle Management module, this module is designed to capture the day-to-day interactions with the Agency. It’s like a Community Communications Management and Balanced Scorecard rolled into one. Since this is still in beta with select customers, we’ll cover it at a later time once the first version is finalized and we’ve dived deeper into the nuances of Agency Relationship Management.

Tomorrow we’ll cover the Evaluation and Dashboard modules and talk about some unique capabilities of the Decideware platform.

Decideware: An End-to-End Agency Lifecycle Management Solution Part I

In our last two posts we discussed Agency Lifecycle Management (ALM), the criticality of such to Marketing, and the need for Supply Management to support (ALM) end-to-end if Supply Management wants to get the sacred cow Marketing spend under management. We also outlined the four fundamental phases of Agency Lifecycle Management, key requirements of each phase, and the capabilities that Supply Management has to bring to the table to get a seat at the table. We concluded the post by noting that if Supply Management doesn’t have the requisite processes and technologies at its disposal, it should get them and that there were solutions out there.

One of the leading solutions in Agency Lifecycle Management is Decideware. Decideware, which was first covered on Sourcing Innovation back in 2010 (in this post), started out with the goal of building a SaaS Supplier Performance Management system to allow organizations to get a grip on strategic supplier management. However, in the process, they discovered that Marketing, in particular, was significantly underserved. So they started to build specific features, and then modules, for Agency Performance Management. However, the deeper they went down the rabbit hole, the darker they found it to be. Marketing desperately needed an end-to-end Agency Lifecycle Management solution, but at the time, no one was offering it. So they built one. Then they discovered, now that they had a light to guide their way, that they rabbit hole was far deeper and far darker than anyone thought. So now they are extending their ALM solution, considerably. And Marketers are doing the dance of joy*.

Currently, the Decideware solution has one module for each of the core phases of Agency Lifecycle Management plus a dashboard. The core modules are:

  • Capability
    which acts as the main interface to the underlying AIM (Agency Information Management) system that underlies all of the modules and allows information on Agencies to be entered, maintained, and searched
  • Scope of Work
    which is used to capture the complete scope of work in a methodical process that can support multiple workflows depending on the fee type (function, resource, deliverable, or agency) and project
  • Briefing
    which is used to capture the interactions with the Agency during each phase of the relationship
  • Evaluation
    which is used to record actuals, cost details, and approvals

and

  • Dashboard
    which provides a unified interface to all of the modules and functionality contained in the system; from the dashboard, the user can search all of the Agency data and retrieve lists of agencies by geographies, capability, scope of work, and other relevant criteria

The system is tightly integrated and fits together quite nicely. From any point in the SaaS solution, a user can drill into the information at hand and quickly get to the information she needs. And if she doesn’t know what to do next, each module has a well-defined step-by-step workflow that will guide the user to optimal results. In the next two posts, we will dive into the Decideware solution in more detail.

* and I’m told it’s a sight to see 😉

Lavante Connect – Streamlined Supplier Self Management

Lavante, a provider of Supplier Information Management (SIM) and SIM-based Recovery, has just released a new version of Lavante Connect, their supplier self-management solution.

Lavante Connect is one of the more powerful, and more streamlined, supplier information self-management solutions on the market. In the Lavante Connect solution, the supplier is walked-through the 3 to 5-step process of completing their profile and is updated with respect to their progress, and percentage of work remaining, after each step. In the Lavante system, the supplier goes through the following easy to follow process:

  1. Company Profile
  2. Legal Identification
  3. Certifications
  4. Payment Information (may be optional)
  5. Specific Information (may be optional)

Profile information walks the supplier through the definition of headquarters information, address information (notices, payment, warehouse, etc.), references, ownership, diversity, business structure, and contacts.

Legal ID walks the supplier through entry of business numbers, tax numbers, and other government identification in the countries that the supplier operates in. It also makes sure that the supplier uploads the appropriate documentation required by the customer, such as W9s in the US.

Certifications walks the supplier through the insurance and certification requirements of the customer and makes sure that the supplier specifies all of the relevant information and uploads the appropriate documents.

Payment walks the supplier through the specification of the payment types they accept (pCard, check, EFT, wire, etc.) and the specifications for each payment type.

Specific Information, of which there can be more than one tab, walks the supplier through the specific information requests unique to the client, such as required product and service information, sustainability information, etc. and the documentation that needs to be supplied.

The ease of use comes not only in the easy to follow registration, and profile completion process, but the fact that the system:

  • validates everything that can be validated,
  • eliminates duplication of data entry whenever possible, and
  • forces e-signatures and verification for all legal documents.

Not only does the system validate that all data entered is in a valid format, but it integrates with as many third party systems as possible to verify that the entered data is correct. Business numbers and tax numbers are automatically verified against government databases, address information is validated against address databases, bank and p-card information is verified through penny-transactions, etc. The system makes it hard for a supplier to make a mistake and harder for any errors to persist for more than a few days. It also alerts the supplier as soon as certifications or registrations are about to expire or information has to be re-verified (according to the customer’s schedule, where such customer may require re-verification of contact information every six months).

All address, contact, and similar data is automatically indexed and can be mapped to any other information requirement that makes sense. So, if headquarters also happens to be the payment and legal notice address, it only has to be entered once. Same for contact information.

For the most part, SIM isn’t complex, and neither are supplier portals, but few master the usability and simplicity required to onboard even the technology unsophisticated supplier quickly and easily with complete profiles, no errors in critical information, and fresh profile data. Lavante Connect is in this group.