Trade Extensions, Director Europe, Philip Hunter, spoke at Supply Chain Magazine's Business Breakfast Conference in Paris identifying effective ways to reduce transport spend. The ability of TESS™ to handle complexity and optimise operational parameters such as load factors, empty mileage, waiting time were identified as significant factors.
The following article is an English translation that first appeared in Supply Chain Magazine. The original version can be read here.
Conference: Which levers to reduce transport costs?
On Thursday March the 20th, a conference was held in Paris on "How to optimize your transport procurement strategy?" co-organized by Diagma and Trade Extensions in partnership with Supply Chain Magazine.
The morning event was attended by over 90 participants and after a brief presentation of Diagma, Gil Yaniv and Jean Gonfreville, Partners, presented "4 levers to reduce transport costs” which included maximizing filling rate, purchasing, pooling and control systems (such as TMS, KPI, route optimization, pre-invoicing , invoice verification, ... ).
The next presentation by Philip Hunter, Director Europe Trade Extensions explained how its e-Sourcing platform (TESS) can combine service quality, environmental goals, prices, supplier risk, decision by BU ... "It is out of the question to simply choose the lowest bidder. Many parameters must be taken into account to select the best transport suppliers” he added.
This appreciation was widely shared by Luc Pringalle, director of operations of Cargill Transport and Logistics (CTL), who welcomed the use of this tool: "It is a choice we made after a benchmark among several providers. The criteria used were ease of use, multilingualism, data confidentiality and the ability to manage different types of tenders”.
Managing different tenders was vital for Amaury Mangin, transport buyer at Cargill CTL, and he described the nature of their tenders which specifically adapt to the various types of industry and the services required: "It may be full truckloads, solid or liquid bulk, refrigerated”. This high level of complexity can be managed seamlessly by the Trade Extensions tool and save valuable time for buyers.
A possible 5% savings on transport spend.
"While it is difficult to assess the gain with this tool, I would say it is around 5% of the transport budget," acknowledges Luc Pringalle.
A rough estimate that Antoine Pulcini, transport purchase director at Danone Waters, seemed to share. Danone, which uses no less than 400 to 500 vehicles a day in Europe and employs 385 suppliers (in road transport alone), estimates that saving opportunities are possible through better consideration of operating conditions. "When transport services costs are analysed we observe that these are hard to reduce. However a review on the operating conditions (load factors, empty millage, waiting time ...) can lead to significant savings," said Antoine Pulcini. “With this in mind, we are currently conducting an initiative to massify volumes and pool our resources with other companies, and why not with some competitors," says the purchasing manager who also explained the value of working closely with a "new generation" flow pilot (for example ID Logistics), which would be decision-making, multi-customer, asset independent and egalitarian, and oriented on value creation.
In conclusion, after the traditional questions and answers, participants agreed that while the Trade Extensions platform TESS was an excellent tool for decision support, it could not fully replace the relationship between contractors and their carriers, which remains an essential element for the mutual understanding of expectations and constraints. Rather reassuring, no?