Targeted S&OP is key to forwarding success

"In the current economic environment, with business models and technologies changing rapidly, it is more critical than ever that companies carefully target and plan their sales, demand and supply efforts to reflect their long-term success and profitability strategies," says Borczon. "It is crucial to business success that logistics companies‘ sales and marketing efforts are strategically focused, carefully planned to achieve objectives, and the results accurately measured in order to meet management’s strategic goals."  

Borczon says that while the majority of companies utilise traditional S&OP strategies to align potential revenue, supply, demand, profit margins and opportunities, successful freight forwarders and LSPs are increasingly focusing on two key areas:

New product planning – targeting niche markets: As the forwarding industry changes, companies are carefully evaluating what market niches they plan to target. Management is appraising specific lane segments or customer types they have been successful with in the past; or identifying new market segments they can successfully target with new services or segment offerings. Business intelligence and data-mining tools help verify targets. If targeting a specific lane segment, for example, companies are making certain it’s a profitable segment. If focusing on a particular market, it is imperative to fully understand the makeup of companies in that marketplace.

Sales opportunity planning – customized campaigns:  Successful LSPs are creating targeted sales and marketing campaigns by using integrated CRM applications as a tool for communicating service offerings and promotions that are customised to specific markets. Clear, quick and concise messages explain LSP services offered, and they provide potential customers with a reason to call the service provider. The success (or failure) of marketing efforts is then measured by tracking and analysing how many leads a specific campaign produces, how many shipments were obtained and how much revenue was generated. If a campaign’s success can’t be accurately measured, one is left with no idea whether or not to repeat it.

Demand planning for operational requirements is not an exact science, especially with fluctuating business conditions and dynamic business models. Rarely do economic conditions or shipment volumes remain constant from month-to-month or year-to-year. While past performance can be a good guide, it is no guarantee of future business achievements.

The ability to report accurately and in detail is critical in planning for future operational needs. Companies must constantly analyse how the markets and their business are trending. If business typically spikes during a given month or at a particular time of the month, this can provide important data that can be critical to future operational planning and should be accounted for in strategic planning to manage risk.

Once an accurate forecast for the weeks and months ahead is generated, the question then becomes what to do with the data accumulated.

If a rise in business is projected, companies must then assess how to handle the increased workload, and with what resources and cost factors involved. More and more forwarders and LSPs today rely on technology instead of manpower to handle increasing workloads with existing resources, instead of adding personnel.

Many LSPs request that customers deliver their bookings electronically as one way of reducing the workload on staff. Whether it be an EDI transaction where the customer sends the file containing their shipment information, or the customer keys in the booking details on a website, the use of today’s technology provides a faster, more seamless and error-free process. Either scenario reduces time-consuming work for operational staff and shifts the responsibility to the customer. Statistics from forwarders suggest that more than 50% of today’s logistical data is now arriving via electronic means, greatly expediting the logistics process.

Delivery of sales and operations information to customers is another area where automation has replaced many of the manual methods of the past. Providing shipment status and PODs to customers is relatively easy to automate, and it saves an enormous amount of manpower as forwarding staff spend less time on the phone dictating information that can be delivered electronically. Automation can greatly reduce the time a company’s staff spends on routine transactions, and thus increase resources available for personal interaction with the customer on more critical issues and exception transactions.

If a company’s S&OP projections indicate that business will be slowing, an entirely different set of issues arise. No one likes to cut staff; but reallocation of resources is something seen frequently during tough times. This begs the question: how can a company use its extra manpower to generate new business? Do existing staff have sufficient skills to help sell new products and services? Consider allocating your best customer-facing employees into more of a business development role.

The key for companies is to always be alert to changing market trends so they can target their sales efforts to meet clearly focused business objectives that are the most likely to obtain maximum ROI in a hi-tech world through greater S&OP efficiencies with existing resources.

CargoWise delivers a single platform solution to improve customers‘ visibility, efficiency, quality of service and profitability, and provide dynamic and efficient solutions for logistics service providers focused on effortless supply chain execution capability in an integrated globally capable enterprise system.

Every day, 2,000 logistics service providers (50,000 users) in fifty countries, move goods through the global supply chain using CargoWise’s ediEnterprise system. CargoWise offers the only single platform supply chain logistics management system that provides integration across all departments and functionality for domestic, regional and global customers. CargoWise operates worldwide from offices across the US, Europe and Asia.

Quelle: eyefortransport
Portal:  www.logistik-express.com