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July 21 2006 12:24 PM

Everyone knows that gaining access to your parcel information is important, but knowing what to collect and how to act on it becomes the challenge. There are many tools and utilities available that can turn data upside down and sideways but doesn�t provide any value and just overwhelms you. You need to walk before you can run, so start off simple and build from there.
Building yourself a simple �dashboard� that identifies and captures the key indicators from a cost and shipping perspective will allow you to identify where you have issues within your delivery life cycle. You can then prioritize these issues, rectify them and make permanent changes. I have observed this dashboard concept work across many large and small companies across the US. This exercise becomes an eye-opening experience to many.
Building Your Dashboard
My first suggestion is to convert from a paper bill to an electronic bill immediately. There are few good reasons to stay on a paper bill and many great reasons to move to an electronic bill. All of the basic information you need is contained within this electronic bill. A discussion with your carrier representative can move this process along quickly and smoothly.
Whether you like a spreadsheet or a small database tool, it doesn�t matter; you need to utilize one or the other to set up your �dashboard.� Depending upon your sophistication, you can import the data from your electronic bill into the dashboard or simply type in the key pieces of information you�ll need.
There are a couple main components that will generate immediate and substantial benefits. These components are broken out into either cost or shipping aspects of your parcel activity. These are simple to capture from the electronic bill and should be accumulated each week. You can then produce your dashboard that looks something like the chart below.
Dashboard Benefits
The value of your �dashboard� becomes evident as you accumulate this data and allows you to migrate into a proactive state. You eliminate all speculation regarding your cost structure and overpayment of particular surcharges. You can begin to prioritize the issues that you�ve now identified and begin to act upon them. There may be inefficient shipping practices that become evident through this information. You can use this information to make changes within your operations or with your carrier.
Recent studies have indicated every one dollar saved is equivalent to $10 in sales. A major benefit of the dashboard comes in the form of cost savings. For example, you can immediately eliminate reoccurring address corrections, unnecessary weekly service charges, incorrect residential or commercial adjustments and many more. Moreover, you will obtain substantial cost savings during your carrier contract negotiations because of this information. You will have actual volume and package characteristics that you can leverage against your rates and discounts. I have observed companies that use this to negotiate discounts and caps on the assessorial charges they consistently incur, reducing a variable cost to control this expense.
As you mature with this �dashboard� concept, you�ll gain trending information about these key elements, allowing you to make strategic decisions that directly affect your customers. You can grow this into your own useful tool or integrate it with a more sophisticated system. 
Case in Point
Here are a few examples of companies that implemented this dashboard concept and took advantage of this information to their benefit.
A large global company had identified an abnormally large cost in weekly service charges. After investigation, it was determined that they were being charged a weekly pickup charge to all of their sales representatives across the country. They notified the sales reps to use a service location or drop box and eliminated this weekly surcharge.
A national retail company was experiencing over 20% of its total spending in assessorial charges, most of which were incorrect addresses. These incorrect addresses were reoccurring each week because its store locations were not in accordance with the carrier�s address. This was immediately reduced six percent by updating the addresses in its manifest system.
After setting up a �dashboard,� an e-retailer solidified its suspicion that its package costs were higher than expected. It also identified its average weight for certain service types were higher than expected. By drilling down into the details, it uncovered dim/weight. Not only did the company work through the immediate issue that yielded $500,000 in dim/weight corrections, it was able to align its package costs and constantly monitor it moving forward.
In a proactive state, a manufacturer used this data to work with its customers in an effort to reduce costs. For years, it had shipped a majority of its volume using air services. By making some changes in its distribution model, the manufacturer was able to migrate most of the air volume to ground services, significantly reducing this expense that passed through directly to its customers.
Gain the Correct Visibility
There is no doubt that visibility will provide you with knowledge, but it has to be the right visibility. There are many visibility tools available on the market, some of which even use this �dashboard� concept. If you have one of these tools or plan to implement one soon, ensure you are collecting the data you can act upon. You can easily get overwhelmed, so eliminate this risk and plan to crawl first � gather the most important cost and shipping elements of your data. Then begin to walk � begin to expand into the key elements you can act upon. Now you can run � create an action plan and drill down into more data as required.
As you collect this data, it produces useful information that helps you reduce costs while creating more efficient shipping options for your customers. By gaining this knowledge, you take more control of your shipping activity throughout the entire delivery life cycle, transitioning you from a reactive state to a proactive state. Short term, you can cut costs on overcharges, discrepancies and incorrect practices that equate to permanent cost savings. Long term, this control gives you the ability to make more strategic decisions that can result in better inventory control, distribution center management, customer satisfaction and the ability to negotiate a more favorable carrier contract.
Todd Bender is the CEO of PakHound Parcel Logistics, a parcel auditing and information management firm. Todd can be reached at or 585-343-6666.