10 things that make your procurement process terrible and less effective

January 30, 2017 Ken Klaver

In this blog, we examine areas of improvement inside the Logistics Procurement process. It is obvious that the industry is making rapid steps and therefore we shine our light on developments within the logistics tender process. 

International Transport and Freight E-procurement

 

According to many experts, procurement is at an inflection point. For many leading companies, procurement has been transformed into a linchpin of enterprise strategy. Yet, many enterprises remain trapped by outdated paradigms and struggle for influence within their companies. For a very long time, procurement was a back office function focused on processing transactions. The selection of suppliers and the negotiation of supplier agreements was highly fragmented, unsystematic and non-rigorous. That began to change in the 1990s with the advent of strategic sourcing. Over the past several decades, this simple but powerful discipline has delivered enormous savings at countless companies and earned procurement groups a substantial degree of respect and influence.

Freight E-Procurement solutions

 

So Freight Procurement has made great steps in 2016, but the shipping industry remains a complex. With multiple modes, varying freight rate structures and conditions, and volatility in the market, both in terms of providers and capacity, shippers must arm themselves with solid solutions, designed specifically for freight procurement. Isn’t strange that so many shippers have their own unique customized process to freight tendering with special excels, consultants, different tools and instructions while at the same time they view transportation as pure commodity?

Thanks to affordable cloud-based solutions, the old way of sourcing in the transportation industry is dinosaur dead and the only thing strange about it…why did it took us so long! I mean, Isn’t strange that so many shippers have their own unique customized process to freight tendering with special excels, consultants, different tools and instructions while at the same time they view transportation as pure commodity?

 

Optimized freight e-sourcing / tendering

 

Freight tendering (sometimes called freight RFQ)) is the external process inside the logistics procurement environment, where you put your request to the market to receive bids and negotiate with your (potential) suppliers. You can manage a freight RFQ process manually or automatically. The tender manager or operator sends out a freight RFQ to one or more suppliers. The carrier either accepts or rejects the freight tender invitation. In case the supplier accepts, the responsible person on the supplier’s side send back a freight quotation (FQ). Theoretically an easy and comprehensive process, but things can complicate fast. For instance, data management, communication flows and analysis are common paint point for LSP’s and tender managers. Why? Well, a common stain on the wall is the good old excel-based approach, that many in the logistics industry still rely on. Next to that, a dedicated communication protocol is often not in place. The result…is a high workload tender process, where tender managers (responsible person inside organization) are focussed abundantly on data management and inefficient communication with suppliers.

At TenderTool are now over one year live with our cloud-based E-procurement solutions. during our development, we understood perfectly that logistics procurement was in desperate need of innovation. Not only in terms of effectiveness but primarily in areas such as user handling, cost and time management.

e-procurement solutions

 

Why your freight tendering process is wearing you down

 

  1. You are still making use of an Excel-based approach
  2. You are still manually creating Rate cards
  3. You are still managing documentation and data in your mailbox
  4. You are still communicating with suppliers via your mailbox
  5. You are making use of complicated tools that only a handful consultants understand
  6. You are still running analysis in Excel (you love to build Excel formulas and macros)
  7. You are still inviting your suppliers manually (by phone or email)
  8. You are overpaying for your current freight procurement software
  9. You are making use of generic tender software  instead of dedicated transportation tender software 
  10. You are not willing the adapt to modern, cost reductive technology

 

Why you should upgrade to E-procurement solutions

 

  1. Save efforts
  2. Reduce time and resources (set-up, communication, data validation)
  3. Improve quality and compliance of tender process
  4. Analytic capabilities

Join the tender revolution!

 

We are very pleased to introduce TenderTool.com, the fastest growing,  cloud-based freight tendering platform that makes freight sourcing simple and efficient. TenderTool is the easiest to use platform and takes the frustration and enormous time spend out of the tendering process. We facilitate LTL, FTL, Ocean and Air tenders. Already many consultancy organizations, carriers and multinationals are using TenderTool and are happy that they have left excel based tendering behind.TenderTool changes the way freight sourcing is being done and it is rapidly growing to become the standard in the logistics industry.

If you want to learn more about us follow us on Linkedin or check our website: https://www.tendertool.com/freight-procurement/ or ask us for a demo or trial.

TenderTool’s  E-procurement solutions include the following features

 

  • Automated Rate Card and lane creation
  • Online reporting and Analysis builder
  • Online questionnaire creator
  • Online communication workflow
  • Impact tree
  • Customizable widgets
  • Tender Manager dashboard
  • Dedicated business rules features
  • Real-time visibility and control inside the process

 

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About the Author

Ken Klaver

Ken Klaver governs ControlPay’s social media strategy, while developing brand awareness, generating inbound traffic and encouraging product adoption. On a daily basis, Klaver manages all social channels of CP, writes blogs, creates infographics and maintains a daily news page regarding the most relevant logistics and supply chain topics.

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