As we head deeper into the calendar year, one trend has remained constant: the need for companies to find a way to do more with their existing resources. Organizations are always seeking out ways to optimize and streamline company-wide activities to minimize their bottom line.
Historically, the primary responsibilities of a company’s CFO revolved around financial reporting, compliance, and allocation. In today’s environment, however, CFOs are becoming more and more proactive in guiding business decisions. This has come to mean being in charge of reviewing all business functions and finding ways to improve the company’s bottom line – both immediately and long-term.
Having already addressed other headline areas of the company—from workforce and benefit costs, to sales and marketing departments—recent reports indicate that the supply chain and logistics operations at a company are now in the crosshairs of CFOs. Traditionally, these areas were viewed as an area “where the cost is the cost,” meaning there were little or no ways to improve the cost structure, or even the efficiency with which they were run.
Because of improvements in data and analysis technology across the board, an organization is likely to have more detailed information about these functions—much more than it had even 5-10 years ago. Analyzing the functions across the board uncovers areas where cost reduction and efficiency improvement strategies make sense. This change also reflects a growing recognition among CFOs of the pivotal role these functions play in an organization’s overall performance and profitability.
Why Supply Chain & Logistics – and Why Now?
There are several factors driving CFOs to scrutinize their supply chain and logistics operations more so than ever before:
- Cost Pressures: Due to the recent economic volatility and heightened competition that many organizations face, cost containment is paramount. Organizations – and by association, their CFOs, are under constant pressure to identify opportunities for cost reduction. And they need to do this while still maintaining – or even enhancing – expected service levels, to attract new and retain existing customers.
- Market Dynamics: Rapidly changing consumer preferences, global trade uncertainties, and disruptive technologies are reshaping supply chain dynamics. Customers have new expectations for faster, better, sooner service. Industry expenses fluctuate with global events. CFOs recognize the need to adapt to these shifts in order to reign in costs, and to remain competitive.
- Risk Mitigation: Supply chain disruptions, whether due to natural disasters, geopolitical events, or pandemics, can have severe financial implications. CFOs have been tasked these past couple of years with prioritizing risk management and mitigation strategies that can safeguard against any such future disruptions.
- Technology Advancements: Innovations such as AI (artificial intelligence), data collection and analysis, and predictive analytics are revolutionizing all aspects of logistics and supply chain management. CFOs are leveraging these technologies to drive efficiencies and unlock cost-saving opportunities.
Reducing Costs and Improving Efficiencies
Attacking supply chain and logistics processes and creating expense and productivity gains means addressing the problem from many angles. CFOs have already begun adopting a multi-faceted approach that incorporates reviews of:
- Process: procurement, fulfillment, and distribution – and eliminating any redundancies
- Suppliers: renegotiations with vendors, consolidation, and alternatives to work with
- Inventory: optimize inventory practices, review SKUs
- Transportation: route planning, reviews of service levels
One area where many organizations have already realized improved productivity and saved money is better managing their shipping operations. To optimize the process, you have to immerse yourself in it and understand:
- Where dollars are being invested and to what end
- What customer needs truly are versus the service levels delivered
- What carrier agreements actually say, and how many negotiated discounts you’re actually receiving
Without insight into the complete shipping function, improvement is impossible. The problem is that, traditionally, gaining that level of insight means hours of time spent reviewing contracts and testing out different scenarios.
Optimizing Parcel Shipping Management
This is exactly where Reveel has been able to help its customers. Our Parcel Shipping Management 2.0 Platform leverages advanced analytics, modeling and simulation, statistical analysis, and real-time insights to transform complex shipping data into simple ways to save money. This platform also guides an organization to optimize processes, spending, and service levels to improve the bottom line and establish a more efficient way of doing things—all without impacting the service customers have come to expect.
Reveel’s solution takes complex shipping invoice data, cleanses and normalizes it, and then presents it in an easy-to-use application. Advanced analytics comb through mountains of data to find changes that can save an organization money. But the solution doesn’t stop there – it also adds 24/7 monitoring of a carrier agreement to ensure discounts don’t expire unnoticed or that annual increases aren’t underestimated.
Accurately determining cost allocation is vital for financial clarity and strategic planning. With Reveel, organizations can create digital twins of their carrier agreements and use actual company shipment data to run simulations of different scenarios, automatically finding the best, most cost-effective way for the shipping organization to run.
So, if you’re a CFO taking on your organization’s supply chain and logistics operations for the first time, give us a call. By reviewing and analyzing your parcel shipping process, we can help you get a solid head start on your supply chain and logistics improvement project. We can unlock substantial cost savings and lasting operational efficiency while establishing a new shipping management process that ensures cost and efficiency optimization is continued year after year.
