Does this sound familiar? Your company makes a strategic change in its distribution network. Sales and profits increase as a result, but transportation spending also increases. Even though the change was a smart move overall, you still have to explain why transportation spending is way over budget—and you have to deliver that message to someone who doesn't have a transportation background.
It's a common scenario, one that logistics and transportation managers may not be sure how to handle. That's where CSCMP Explores... How to Talk Transportation Budgets to Non-Transportation Professionals can help. The report, the latest edition of the Council of Supply Chain Management Professionals' series of research publications, is designed to serve as a starting point for discussions about the tradeoff between the expected benefits of a business decision and potential transportation cost increases—before the decision is made.
Critical to any discussion about transportation budgets is an understanding of the factors that drive transportation costs, including fuel prices, customer order profiles, and changes in carriers' capacity availability. The report covers metrics and software tools that help to identify the drivers of transportation spending, and explains how a transportation management system (TMS) can assist in managing business processes, data capture, execution, and analysis.
The CSCMP Explores... series is free to CSCMP members. Each issue is written by a leading expert and summarizes recent supply chain management research, trends, and best practices. For information about the series, go to cscmp.org/member-benefits/explores. More information about CSCMP can be found at cscmp.org.