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on Monday, July 11, 2022 0
Organizations that have utilized traditional procure-to-pay (P2P) solutions are experiencing the need to monitor spend efficiency more closely. The same holds true for businesses that have deployed a combination of disparate systems, alongside enterprise resource planning (ERP) software. Leaders are prompted to seek more robust solutions—while lowering costs—and find that a comprehensive source-to-pay (S2P) platform is the answer. 

sourcing cycle with multiple considerations
Automate Source-to-Pay Workflow

Increase Workflow Automation
When S2P solutions are implemented, organizations can increase the automation of their workflow and reduce critical cycle times. The ease of use, simple implementation, and visibility across robust procurement workflows are unmatched with end-to-end platforms. Meanwhile, organizations that rely on general ERP applications, may require supplemental tools to manage their complete sourcing to payables process.

Seamless Integration
The best fit S2P will offer a plug and play install and seamlessly integrate with all ERPs. This eliminates the need to migrate data from existing tools or worry about costly downtime. When multiple solutions or “extra” modules must be deployed to extend to end-to-end coverage, customers encounter added cost. This is more painful when teams refuse to adopt the individual ERP or niche solution because it does not meet their needs or otherwise lacks flexibility. 

Tech-Enabled Solutions
When S2P solutions are enabled with the latest technology, features like artificial intelligence support advanced capabilities through process automation and document processing. This is demonstrated in Intelligent AP Automation by eliminating inefficiencies associated with manual processing and boosting compliance. The capabilities of complex document recognition, sorting and classification accessible through a simple, customizable user interface are transformative to the way purchasing is managed. 

Image displays bar chart to demonstrate growth
Monitor spending while reducing costs with your S2P

Intelligent Assistants and other proactive technology are further differentiators seen in S2P platforms. These features add an expanded element of convenience by enabling users to access documents and workflow details, through conversational or text prompts while on the go and outside of the platform interface, using recognized communication tools. 

End-to-End Processing
S2P solutions are designed with the full sourcing process in mind, extending capabilities and workflow visibility.  




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on Tuesday, December 22, 2020 0


This guest blog comes to us from Megan Ray Nichols of Schooled by Science.

Over the past few years, supply chains everywhere have embraced digital technologies. This trend isn’t unique to the logistics industry, but this sector has developed a particular interest in digitization. Analysts and research firms have talked about the digital supply chain repeatedly, but does it really matter that much?

A lot of people have made lofty claims about what digital transformation in the supply chain can do. These grand predictions can understandably make some professionals question their authenticity. While some of these claims may be overly optimistic, digital supply chains are a significant movement that no company should ignore.

Here’s why businesses should care about supply chain digitization.

Traditional Supply Chains Are Inefficient

Disruption for disruption’s sake isn’t something companies should pursue. Substantial changes should always serve a purpose, and supply chain digitization does. The fact of the matter is that traditional supply chains aren’t efficient. In 2018, more than half of supply chains around the world experienced disruption.

Digitization won’t fix all supply chain disruptions and inefficiencies, but it can substantially improve them. For example, 54% of truck drivers wait between three and five hours at a shipper’s dock, costing companies more than $1 billion annually. Transparency and efficiency gains through digital tools like fleet tracking software and automation can dramatically reduce those wait times.

Digitization makes information like package location, product quality and consumer trends accessible, often immediately so. Traditional methods can’t offer that, so they come with barriers to efficiency.

Digital Supply Chains Expand What’s Possible

The digital supply chain doesn’t just fix historical issues. It provides tools and resources that companies may not have even imagined a few years prior. With new technologies and processes emerging almost every day, the possibilities keep expanding.

Take smart glasses, for example, which can project visuals like picking orders or item locations in front of workers’ eyes. These hands-free technologies were once little more than science-fiction, and now they lead to 15% improvements in efficiency for companies that use them.

Technology like self-driving trucks seems futuristic now but will one day be standard. Already, 16% of logistics companies are investing in it. If supply chains wait too long to prepare for new digital technologies, they’ll quickly fall behind.

Modern Companies and Customers Expect Digital Services

If nothing else, the digital supply chain is significant because the rest of the world expects it and is becoming increasingly digitized. If supply chains don’t follow suit, they’ll become obsolete.

A 2017 McKinsey study found that supply chain digitization had the most potential for boosting revenue of any business area. Despite that potential, only 2% of surveyed companies focused on supply chains in their digitization efforts. That’s a tremendous oversight.

Today’s companies and consumers expect services that match their already digital lifestyle. For example, 79.3% of customers expect free two-day shipping, which is either impossible or impractical to offer without digitization. If supply chains want to be competitive, they too must embrace the digital. 

Supply Chain Digitization Is Becoming Standard

At this point, most supply chains have adopted digitization to some extent. As the years go on, the benchmark for digitization will rise higher. Digital supply chains won’t be an advantage in the future, but a necessity.

Supply chain digitization is inevitable. Embracing this trend can lead to success in this brand new world.

Thanks, Megan!

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on Tuesday, October 20, 2020 0

This guest blog comes to us from Megan Ray Nichols of Schooled by Science.

Even logistics professionals with years of experience in the supply chain may face new challenges when working with construction companies that need heavy equipment. 

Finding the best equipment for the job can often be a challenge — especially if you're working with a construction company that faces difficult site conditions or a limited budget. It can also be difficult to make decisions about equipment — like whether to lease or buy outright. 

These best practices will help any logistics professional ensure they provide the end user with the construction equipment they need — even if they face unique obstacles or project conditions. 

1. Start With Project Specs 

Not every construction job is the same. Challenges posed by certain job sites — like uneven terrain or excessive dust — may require specific equipment or safety features. 

If possible, get a sense of the job site conditions this equipment will be up against. Information from investigations and condition reports on future projects can give you a sense of what your end user will need to handle. Fielding potential concerns from a customer can also help you source the right equipment for them. 

2. Consider Length of Use 

Some construction companies may only need a piece of equipment briefly — just long enough to cover a few projects or seasons. If your customer doesn't need a machine for long-term use, leasing or renting may be a better option than buying. 

3. Prepare for Transportation 

Heavy machinery, once purchased, will need to be hauled to the job site. When selecting a dealer, make sure the equipment or location won't result in prohibitive transportation costs. 

Some vendors will help you find local dealers to minimize travel distance. 

Depending on the equipment your end user has available, you may need to work with a third party to haul it from the dealer to the intended location. 

4. Consider Buying Used 

Not every piece of heavy equipment needs to be new. Often, used heavy equipment may be significantly more affordable and typically won't need extensive maintenance or repairs compared to new equipment. 

Used equipment also doesn't lose as much value as new machinery over time. Most market depreciation is seen in the first year of use. Because preowned items are typically older, you won't have to worry nearly as much about that lost value. 

5. Take Depreciation Into Account 

When buying used equipment, it can sometimes be hard to know if you're getting a good deal — especially if you're unfamiliar with the particular niche or industry that uses the tool or machine you are looking to buy. 

Estimating market depreciation can give you a ballpark idea of how much money you should be spending, based on the wear and tear the equipment has likely seen. 

6. Source From Reputable Dealers 

If you decide to purchase used equipment, be sure you're working with a reputable dealer. Asking for testimonials and reviews will help you identify trustworthy vendors, even if you don't have strong industry knowledge. 

If you buy used machinery, working with a reputable dealer will help ensure you don't invest heavily in equipment that's not worth the asking price. Factors that affect the cost include damage or extensive wear and tear. 

7. Vet New Sources 

In the construction industry, good sourcing practices can still help you identify if a source is trustworthy. For example, when buying from a new vendor, asking the dealer for proof of ownership can help you avoid purchasing stolen equipment or counterfeit parts. 

8. Don't Forget About Maintenance 

Unless you rent or lease a piece of equipment, the end user will need to regularly maintain it to keep the machine functional. 

Some machines are easier to repair than others. Manufacturers may not fabricate replacement parts for some models. The end user may also use third-party tech that isn't compatible with a certain piece of equipment. Factors like these can complicate repairs, making maintenance more expensive or difficult. 

9. Consider Testing Equipment 

A reputable dealer that's confident in the value of its products may be willing to let you test out a piece of equipment. 

A quick walk-through can let you know if the machine is in good working condition — though it may require assistance from a worker with certifications or training necessary to operate it. 

10. Plan for Additional Parts and Equipment 

The business you’re working with may have additional wants that you'll need to fulfill with outside solutions. For example, telematics systems — like those provided by equipment manufacturers — are becoming a popular choice for companies that want to track their equipment across a job site. Some RFID-based safety solutions can provide workers and heavy machine operators with some extra protection from backover incidents. 

Successful Sourcing of Heavy Equipment for Construction 

Even skilled logistics professionals may run into difficulties when sourcing and procuring equipment for a construction firm. Fortunately, foresight and the right planning can help keep you on track. Using these best practices — especially those that involve considering unique industry needs or potential job site hazards — will help you secure the best possible heavy machinery for a business in the construction industry.

Thanks, Megan!
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on Friday, August 07, 2020 0


This guest blog comes to us from Megan Ray Nichols of Schooled by Science.

Strong supplier relationships are key for businesses wanting to maintain growth and expand into new markets. If a supplier is essential to your business, your relationship with that entity can easily develop into a strategic alliance — the success of your business helps theirs, and vice versa. 

With a strong relationship, both businesses can move away from cost-cutting and profit-maximizing moves to a shared strategy of real mutual benefit. 

Regularly working with the same vendors can streamline the procurement process and eliminate the costs typical to establishing a new supplier relationship. Also, as knowledgeable as you and your team are about industry trends and developments, suppliers have access to a range of contacts and other information sources you may not be privy to. Suppliers — if they're invested in your business's growth — may be much quicker to talk with you about new avenues for expansion, market shake-ups or new goods and materials your company may benefit from. 

If you lean heavily on suppliers like just about any business, then building strong relationships with them will be crucial. Below, we'll cover four different techniques you can use to grow your relationship with your suppliers: 

1. Manage Critical Suppliers Individually 

A personalized approach rather than an algorithmic or systemic one will be essential for fostering good relationships with suppliers. Management approaches that work with less critical vendors in a crowded market — like the use of e-auction systems — can be used, but they won't help you build strong relationships. 

Instead, work directly and closely with your suppliers. You may even consider involving them directly in product development, risk management programs or initiatives to build out your business's overall supply chain. 

Soliciting advice and expertise from vendors can provide immediate benefits and build communication between you and your supplier. 

2. Establish a Supplier Relationship Management Program 

To build a strong relationship with critical suppliers, you'll need an action plan. Start by identifying the most essential suppliers for your business. Depending on your organization's needs and resources, you may want to go further and classify them based on potential profit impacts and risks. 

Once you've identified the entities that will help your organization most in the long run, you can start putting supplier management strategies into place. These strategies will help you build and structure your relationship with a vendor. They'll also help you manage any potential issues or miscommunications that may arise, which can prevent a relationship breakdown in case of an error. 

3. Keep Lead Times Reasonable 

In general, it's a good idea to be careful about lead times and demands with quick turnarounds. Whenever possible, give your suppliers enough time to source the goods and materials needed to fill your orders. 

Similarly, you should be sure to pay your suppliers on time. Prompt payment may seem like a low bar to clear, but it's not unusual for vendors to wait days, weeks or even longer for businesses to pay after an order is fulfilled. Good payment practices can solidify your business as a reliable partner. 

4. Communicate Consistently and Effectively 

Keep communication channels open with critical suppliers and make transparency a top priority. Similarly, focus your relationship-building efforts on suppliers who make similar moves toward strong, reliable communication. Maintaining open channels with your vendors will prevent communication breakdowns. Regular discussions will also help you understand how your supplier operates, as well as their internal language and business culture. 

Sharing information with your supplier can also encourage trust. In the same way that they have access to valuable contacts and knowledge that your business may not, your team also has useful and exclusive data. 

 Time will help here. Being a reliable, long-term customer is often enough for a major supplier to become invested in the success of your business. Sticking with the same companies and building a rapport with your contacts can go a long way in laying the foundation for strong supplier relationships. 

Your Business Can Cultivate Reliable Supplier Relationships 

A strong supplier relationship can be a massive boon for any business. It can make procurement of goods easier and offer value for a company in the form of expert advice and insights. 

When building a long-lasting supplier relationship, mutual communication and reliability will be foundational. Maintaining open communication channels, paying suppliers promptly and managing supplier relationships individually can all go a long way in nurturing these connections. 

In some cases, time may be enough to solidify a valuable connection. Paying promptly, communicating clearly and keeping demands reasonable over time can convince a supplier to further commit to a mutually beneficial relationship with your company.

Thanks, Megan!
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on Friday, June 19, 2020 0














The following article comes to the Strategic Sourceror courtesy of Naseem Malik and MRA Global 
Sourcing. 

 Part I of this article, I discussed some of the overarching supply chain topics that have been commanding most of the oxygen. Everything supply chain related from risk to resiliency and transparencies and how broad sectors of our economy were being impacted and the stern counsel being provided from experts help us never be caught short ever again. If you bought all that, I have some beachfront property to sell you in Kansas.

‘The Great Supply Chain Disentanglement’
As the current administration continues to harden their hawkish stance towards China, there is another issue fraught with peril that continues to alternatively simmer and somewhat boil over. This is what I like to call the coming ‘supply chain disentanglement’. As our relations fray with the Middle Kingdom, we must be ready to accept the significant cost to competitiveness at play here too. For clarity purposes, goal isn’t to diminish the potential security considerations at play with this key rival and trading partner of ours. When it comes to network equipment for national defense or critical medical supplies - we do share a certain level of interdependence that must be balanced.

From the US perspective, we are dependent on China for pharmaceutical ingredients and that requires us to solidify and diversify (hopefully soon) our pharmaceutical supply chain prior to worsening relations. According to the FDA, in 2019 an estimated 40% of finished medications and 80% of active pharmaceutical ingredients were manufactured overseas, with the bulk of those coming China and India. Lest we think they have all the power, China too is dependent on US drugs, particularly our cancer drugs. And yes, we are still the world’s leading source of pharma innovation, so we have that going for us too. From a strictly risk mitigation perspective, it’s all the more important for both partners to ensure there aren’t any supply disruptions for these critical drugs and treatments as we learn to co-exist with growing uneasiness while still being co-dependent. Sounds like a lot of fun for those eager negotiators out there.

This decoupling also affects educational linkages between the two nations. With the ensuing Chinese brain drain here, the US will have to invest more in STEM at home and let up on its immigration policies with other countries like India to bridge the gap. This will also require us to deepen our economic and political ties with friends and allies across the pond and the world. Of course, this too sounds like academician-speak as they’re good at touting these lofty ambitions worth pursuing, but in actuality much harder to implement in real life.

The Vaccinated Supply Chain
What really caught my fancy in the recent past relates to none other than the one and only Amazon. They have certainly earned some goodwill during the pandemic as the country was dependent on their supply chain infrastructure and by the massive hiring they undertook. Where they really stunned their shareholders was in their last quarterly earnings call when Bezos told them all that they may want to take a seat…because Amazon is now trying to create the first ever vaccinated supply chain. They will take the entirety of their $4B quarterly profit and dedicate it to this cause. Imagine any other CEO doing this and their stock and company would get skewered. But if there’s anyone that can back their big talk, it’s the biggest of them all.

This vaccinated supply chain will cover PPE/safety protocols, enhanced cleaning, hiring new workers and increasing compensation. Their goal is to have COVID-free supply chain that can handle all of their goods safely from supplier to customer. It’s a brilliantly audacious move because others can’t even come close to this. FedEx can’t do it as they don’t control the front end. Walmart can’t do it because they don’t control the last mile and still have to use 3rd party delivery firms. How powerful a narrative is it to tell your suppliers, customers, partners, and workers that we will have an interruption and COVID free supply chain and oh by the way, no one else can even come close. It helps them that they’re fully vertical and have access to cheap capital to pull off this very expensive feat.

The Hottest Product Around
And of course, the icing on the cake is that they are also feverishly working to develop what will probably make the world’s biggest consumer product – testing for the coronavirus. Coming soon to a delivery near you – fresh food and your own home testing kit. With apologies to all other successful supply chain companies and models out there, how soon before it’s just the Amazon supply chain and everybody else when we refer to continuous evolution/results when it comes to the ubiquities of the supply chain?

MRA Global Sourcing is a specialized recruiting solutions firm, placing top talent in the supply management arena including procurement, strategic sourcing, supply chain and logistics.
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on Wednesday, June 17, 2020 0




The following article comes to the Strategic Sourceror courtesy of Naseem Malik and MRA Global 
Sourcing. 

There has been no shortage of discussions, opinions, warnings, and recommendations around what was usually referred to as stodgy old supply chain. Post-pandemic, that surely won’t be the case as now it seems we can’t get enough news when it comes to all things supply chain.

From my vantage point, here are all major themes around supply chain that are being assessed and discussed:
  • Transparency 
  • Resiliency 
  • Agility 
  • Vulnerability 
  • Planning 
  • Disruption 
  • Efficiency 
  • Risk 
  • Exposure 
  • ...and probably a few more to really make things mind-numbing! 
We have experts from McKinsey, HBR, The Economist, ISM, WSJ, Supply Chain Review, etc. that are espousing all the things that companies should have done and should do now to prepare for an eventuality akin to what we are currently experiencing. Personally, I like to jest by saying that all supply chain risk professionals should be taken to task for their abject failure to predict this once in a hundred-year pandemic, but that’s just me.

While we can dwell over what appears to be fairly obvious advice for companies, I think there are more interesting developments worth keeping on the radar. Lest I give it too short a shrift, let’s cover some of the more compelling issues:

Risk & Resiliency 
When it comes to the risk and resiliency part, the pundits are advising to start thinking ahead to discontinuous shifts and the next normal as they move beyond the recovery phase. Some of these pedagogical assessments start with not so flowery depictions of how supply chain risk can be found at the corner of exposure and vulnerability. As heart-warming as that sounds, it doesn’t help us understand how exactly to deal with the phenomenon of risk experts underestimating the probability of such catastrophic events in the future. Needless to say, if you really want a world-class and risk-aware environment, all you need to do is build, implement and embed a strong culture of ownership within your organization that should be able to predict all types of doomsday scenarios.

Of course, you will be better served by utilizing their services as they help you figure out all these interconnected systems and navigate through global supply shocks. Since they all predict this will inevitably transpire again, best start preparing now. I know, genius.

Global & Local Sourcing
Another facet that’s been embedded in this discussion pertains to the supply crisis due to weak global and local sourcing strategies. An example cited is how almost a decade ago we had the chance to learn from the earthquake/tsunami that struck Japan. Expectation was that companies would learn and not be exposed to such weaknesses in their supply chain. Not just that, but they would also have a better plan in place for their second and third tier global suppliers. Instead, we’ve been reduced to handwringing over why we were so heavily invested in China and why the risk/benefit analysis of single sourcing didn’t help avoid this problem. Again, it wouldn’t be too much of a stretch to imagine that most of these contingencies were probably sacrificed at the altar of securing products and/or to meet competitive cost targets.

A particular example of sourcing and supplier extortion run amok came from one of our global clients, Ansell. In an interview with WSJ (4/29/2020), the CEO of this supplier of PPE described how their company will have very long memories once things subside in the next quarter or so. This Australian company was aghast to learn their supplier were marking up their regular product from 2,3 4 to all the way up to 500% in the middle of the pandemic While they immediately scrambled to find alternative sources, when they couldn’t, they had to swallow hard and reluctantly agreed. As if this wasn’t enough, they also had certain distributors they typically sold to that also added on a 100% markup to their products. That warrants them being cut off and business being diverted to their competitors. According to their info, there were 25K new companies in China producing masks. Good luck vetting that greenfield supply base – no, thanks.

Suppliers & Deliveries
There was some positive news in that the ISM Manufacturing Index had climbed slightly in May. It is noteworthy that there is a hint of distortion in the reported component delivery times. Usually this happens when suppliers are inundated with orders and cannot meet demand with business uptick. But in this case, the supply chain disruptions around the world are obviously Covid-19 related. And when it comes to inventories, instead of rising when manufacturing is hurting and orders are cratering, it did the opposite also because of the pandemic.

In Part II of this article, I’ll conclude with my favorite supply chain story of the past few months. Hint: it’s where healthcare meets the ultimate disruptor.

MRA Global Sourcing is a specialized recruiting solutions firm, placing top talent in the supply management arena including procurement, strategic sourcing, supply chain and logistics.
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on Tuesday, May 05, 2020 0


This guest blog comes to us from Megan Ray Nichols of Schooled by Science.

Procurement consultants are vital to the success of any supply chain. Top-notch procurement can have a substantial impact on a company's profits, but this high potential comes with a hefty responsibility for procurement professionals. If you're in charge of acquisition, your decisions can make or break a company's success.

You may be a good procurement professional, but are you a great one? With the right strategies, you can present an impressive return on investment to your company. Here are five steps to becoming a better procurement professional.

1. Build Relationships
The effectiveness of any acquisition effort hinges on the buyer's relationship with the seller. A stranger with robust industry knowledge may be able to negotiate a fair price, but an acquaintance will get an even better deal. If you hope to be a leading procurement professional, you'll need to build and maintain industry relationships.

The benefits of having strong relationships with suppliers don't end at smoother negotiations. Having connections with a variety of vendors and other professionals can give you insider knowledge. You'll hear about coming market shifts or price changes before other, less connected procurement specialists do.

If you work as a freelancing consultant, you should also build healthy relationships with your clients. The better you understand them, the more you'll be able to meet their specific vision.

2. Consider the Minute Details 
The best procurement professionals are those who understand the financial impact of every detail. Nearly countless factors play into a company's spending, many of which you probably don't initially consider. To improve your merit as a procurement professional, learn what small details you may be overlooking.

Seemingly insignificant factors can add up to a considerable amount of money over time. Nothing is too small for you to account for in your budgeting. Consider every instance of payment throughout the supply chain, not just the big-ticket items.

Some items or processes are likely more connected than you'd think. To further understand the extent of all influencing factors, you can turn to technology for help.

3. Take Advantage of Technology 
There are plenty of technological tools at your disposal nowadays. To be as effective as you can, you need to take advantage of these assets. Leveraging technology can help you streamline tasks and identify areas for improvement.

Using tools like project management software, you can offer more thorough and precise cost analytics. More advanced technology, like business intelligence tools, can help you gain a better understanding of the connections between all your processes. These services save you time and will likely highlight considerations you haven't thought of yet.

Becoming familiar with technology can also help you determine the best fit for your company's needs. The industrial world is moving toward advanced tech and automation, so it pays to understand these tools. Machines and software are often more cost-effective than traditional methods for most processes.

4. Recognize Industry Benchmarks 
The qualifications for what constitutes outstanding procurement invariably change. To stay competitive, you have to know where the competition is. You should always be aware of industry benchmarks and use them to guide your processes.

By benchmarking, you can see how your company's spending compares to industry standards, giving you a tangible goal. Whether a contract is a good deal or not depends on what other businesses are getting. Without benchmarking, you won't know how competitive your company is.

Benchmarking also applies to you, not just your company. As you're improving in your work as a procurement professional, so will the industry as a whole. You'll be able to develop a better plan for professional growth if you know what companies should expect from your work.

5. Know Your Impact
To be a competitive procurement specialist, you have to understand how all factors contribute to success. This concept applies to your work, as well. You should appreciate how your actions impact the company as a whole.

Know the costs of your operations, but also look ahead to the payoff if you excel in your role. If you understand the broader effects of your role, it won't just improve your performance, but it will help you market yourself. You'll offer a more convincing argument to both clients and suppliers if you know how exactly you can help them.

A good procurement professional understands the long-term impact of their purchases, but a great one also knows the advantages they bring to the table. If you don't consider yourself, you're not accounting for all influencing factors.

Exceptional Procurement 
There are no quick and easy tricks to make you an outstanding procurement professional. But there are measurable, knowable steps you can take to better your work. Most of these steps boil down to you developing a thorough understanding of how small details lead to major results.

An exceptional procurement expert knows how making the slightest adjustment will affect company profits. The path to gaining this knowledge is likewise full of making small, seemingly insignificant changes. Following market trends or fostering relationships with suppliers may seem like secondary tasks, but they're what separate good specialists from exceptional ones.

Competitive procurement is a complex, multi-layered process. If you overlook the importance of seemingly minor steps, you're not getting the full picture.

Thanks, Megan!
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on Wednesday, November 27, 2019 0

This guest blog comes to us from Megan Ray Nichols of Schooled by Science.

Procurement's evolution is occurring more quickly than ever as organizations in every industry move into a digital era. That's a blessing and a curse. On the one hand, digitization promises to make processes more efficient and insights much easier to generate. On the other, the promise of all those benefits sometimes gives Procurement's unrealistic expectations. Many teams forget that they'll  it requires adoption by all involved parties, including partners and vendors.

When making an argument for digitizing processes and systems, procurement specialists will almost always contend with a certain degree of resistance from other stakeholders. It's important to remind them that - after a digital transformation - data will become the new fuel of the organization, influencing every working facet of the business - not just Procurement.

Why Digitize Procurement?
Historically, the procurement field is behind the curve when it comes to adopting many newer, data-driven solutions and technologies. Lately, more organizations have begun to realize the value of digitization and now have some plan of action either prepared or already in motion. The majority of businesses expect they'll realize a full digital transformation within the next several years.

The swath of data that becomes available as a result of digitization means vastly improved opportunities and productivity. In a time when the competition is increasing exponentially, digitized and more informed spend management solutions could offer savings anywhere from 5-25%.

Data that was previously unavailable or unknown suddenly becomes transparent for all. Analytics tools can help parse and extract more in-depth insights to inform future operations. Plus, with the right solutions, an entire network of procurement platforms can be automated and simplified.

While digitization certainly sounds promising, it’s not an easy transition to make. Here are some essential things to keep in mind that will help during the digitization process.

1. Efficiency Is King
For the most part, innovative and technology-oriented upgrades will provide a series of productivity improvements that warrant the cost of adoption. These efficiency improvements signal the true value of digitization. Therefore, every plan, event and change must push the operation toward a faster market-to-cash cycle.

If those improvements aren’t happening, then the team needs to return to the drawing board. Digitization is highly beneficial, but there are a lot of moving parts, and things can go wrong. Some changes may not be worth the buy-in, depending on the value that’s returned — in this case, how much efficiency improves.

2. Improve What You Can
Before deploying a large-scale digitization strategy, it might be better to start small and experiment with existing processes. It not only helps you learn the ins and outs of technology, but also shows what customization options are available.

For example, procurement audits come with the territory and are necessary for smooth operations. Why not develop a system that ingests related data and performs a continuous, real-time review throughout the scope of a project? Big data technologies and machine learning are more than capable of handling such a thing. Review the audit process to see where you can implement new technologies to streamline the process.

3. Self-Service Will Improve Data Management
One fantastic element of data-driven and modern technologies is the opportunity to automate and simplify complex operations. Real-time data can inform a controls system the entire way and allow for more nuanced adaptations. With the help of machine learning and AI, procurement systems can be heavily automated.

Automated networks are more about simplifying tasks and opening up self-service opportunities. Buyers and suppliers want to see easily integrated systems, with comprehensive access, that guide them through the process without considerable input.
The solutions provide a single interface or platform for conducting business and also compile all interactions and relationships. This allows for a more organized and better-managed system.

4. Set Your Priorities
Digital procurement solutions are powerful tools, but they're also often overwhelming. The market is so broad, solutions o robust that you need to choose a focus as early as possible and stick with it. Select what processes and systems you’re looking to improve upon and know what kinds of tools you’re going to use to get there.

The general approach is to use massive amounts of data to inform operations, but there are so many tools and solutions on the market that will do this. It also means you should be looking at opportunities for improvement, as opposed to merely choosing a device based on its reputation or features. The items should always complement the upgrades you’re looking to make, not the other way around.

5. Give It Time
As you transform existing processes and apply new solutions or technologies, the organization will start to realize some change. However, not everything is going to happen overnight. It takes time to see an investment not only come to fruition but also to generate returns — and the same is true here. It will take some time to create value through digital and data-driven processes. Out of 91% of German manufacturers that have invested in digitization, only 6% consider their operations entirely digitized.

The downside to it is that it will also take time to see whether or not a strategy is lucrative. It may take even longer to make adjustments. That’s why planning out a digitization strategy well in advance is always necessary.

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on Tuesday, November 26, 2019 0



This guest blog comes to us from Megan Ray Nichols of Schooled by Science

Choosing the right procurement strategy is vital for completing construction projects. Every project, whether in the public or private sector, is different. What they all have in common is the desire to deliver outstanding results.

That means taking procurement strategy seriously is crucial for success in this industry. So what are some popular procurement strategies — and when does it make sense to use them? Here’s a closer look at where procurement stands today.

Why The Right Procurement Strategies Are Essential in Construction

According to research, as many as 90% of building projects undertaken in the public sector come in over budget or fail to meet their deadlines.

Why is it so critical to have a procurement strategy? For one, it means you have established processes in place for dealing with setbacks, such as kinks in the supply chain. For another, it helps avoid cost overruns and rework as the site takes shape. Last-minute procurement problems are costly. So are delays. Having a clear strategy allows you to manage risk more effectively.

Procurement managers have more options for strategizing and carrying out procurement than they might imagine. They also have considerable influence over the timeliness and cost-effectiveness of a project. Procurement skills and the right strategy are only going to get more crucial as every industry on earth grows more complex and competitive.
So, what are some procurement strategies and tips worth considering in construction? Here are five.

1. Employ the Design-Bid-Build Strategy

You might call this the “traditional” approach to procurement. Even so, it’s worth exploring why it endures and why it works for so many business relationships.

Design-bid-build is advantageous for the owner or owners because it clearly defines the project’s scope, budget and timeline. This approach brings in contractors who are qualified or believe they’re qualified to take on the work as outlined. There are some drawbacks, of course.

By and large, procurement managers instructed to operate this way will choose the lowest bid from the lineup. It is a positive thing for the builder, and it may not have any downsides in projects that are well-understood at every level, from land use and engineering to design. But it’s potentially not that great a match for more specialized projects where there may be surprises along the way that result in work or costs that weren’t specified beforehand.

2. Consider Pre-Qualifying Contractors

Owners who need construction services want to know their money is buying reliable and experienced contractors. Procurement managers know this, which is why the second procurement strategy worth mentioning is pre-qualifying contractors.

The goal with any procurement strategy is to find partners and vendors who can help keep costs and rework low. But if the procurement manager wants more control over the process than the design-build strategy allows or wants to be sure their specialized project gets committed, industry-specific attention and not just the lowest bidder, they can pre-qualify contractors.

Unlike in design-bid-build procurement, pre-qualifying means screening contractors for responsibility and quality before bidding begins — not after the project is underway. Only preferred and vetted contractors get invited to submit bids.

Procurement managers can use any of the usual criteria for pre-qualifying candidates, including their portfolios of relevant work and past performance. The result remains the same: less administrative time wasted and, potentially, less project disruption and rework due to contractors that turn out to be unreliable after securing the bid.

3. Use Job Order Contracting

What do public-sector procurement managers and property managers for apartment complexes have in common? Among other things, one of the tools they sometimes use is job order contracting.

This type of procurement has the benefit of streamlining construction and other types of jobs that are small, happen often and don’t change too radically in scope over time. Job order contracting is a relationship between an owner and contractor where the contractor remains “on call” to respond to job orders for a set of pre-determined work tasks at pre-determined markups for labor, parts and other overhead.

Again, job order contracting is a streamlined approach. Procurement managers enjoy predictable costs and potentially faster timelines, but they don’t necessarily get lower costs.

4. Seek Expertise on New Technologies and Approaches

By most standard definitions, procurement managers are experts at choosing cost-effective contractors, suppliers, business partners, equipment and industrial services.

They excel in the practical and business side of things, such as strategies for keeping costs low. But, 
unless they work at it or the organization encourages it, they are not necessarily well-versed in the latest construction technologies. “It’s always worked before” is a poor excuse to ignore modern construction technologies or opportunities to work with mold-breaking industry partners.
If you’re a procurement manager at a construction company and you need new equipment, it pays to explore new technologies and the benefits and tradeoffs they bring. For instance, some heavy electric equipment delivers higher upfront costs, but with zero emissions and a lower cost of ownership. But they might present a learning curve to management, labor or both.

On the other hand, if you’re a procurement manager looking to do business with a construction company, especially if the project is unusual, it helps to find one with subject matter expertise in cost-, time- and material-saving technologies like digital grade control systems, location awareness and tracking and assistive and remote capabilities.

5. Master It All With Multi-Prime Contracting

Multi-prime contracting is a modern procurement strategy that’s won favor because it can help fast-track projects. Here, the procurement manager draws up separate contracts for each process in the overall project. For instance, there might be separate contracts for electrical installers, plumbers, earth-moving, structural builds or repairs and any number of others.

As the name suggests, multi-prime contracting allows procurement managers to extract the best value from each process. In what is either an upside or a downside, it means they have much more control and responsibility over how the project plays out and how to coordinate everything. The same is true on the owner’s side of things, along with the added possibility of lower costs, thanks to reduced markups and overhead.

Procurement Paves the Way to Success

We imagine you already appreciated the challenge and the importance of procurement in construction. With any luck, you now have a renewed understanding of how central a role it plays and how much variety there is in how you can tackle the corresponding responsibilities and strategies.

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on Tuesday, October 29, 2019 0

This blog comes to us from Kelly Barner, the Owner and Managing Director of Buyers Meeting Point. It originally appeared on The Determine Blog.

We’ve all heard (or used) the expression that managing some groups of people is “like herding cats”. For cat people in the reading audience, this requires little explanation. Cats do what they want, when they want, only if they want. The expression wouldn’t have caught on if it weren’t true, which means there are plenty of feline humans out there too. If you’re in procurement, I’m sure you’ve met quite a few of them.

We put a contract in place, and the “cats” buy from someone else. We establish a process, and they do whatever they like. It can be infuriating. But, if we approach our internal cats with the right attitude, they also present us with unique opportunities to improve procurement’s performance, impact and influence.

Here is some advice for those days when you find yourself unavoidably herding cats:

Independence can cause friction or spark innovation.

The thing about cats is that, unlike horses, cows, sheep, or… well… lemmings, they aren’t hardwired to travel in herds. They naturally function as independent creatures. You may care for them, but you will never own them.

Similarly, in the world of corporate spend management, people who go against the grain rarely do so just to be difficult. Even when their efforts are misguided, they are acting in what they believe are the best interests of the organization (or at least their function).

These independent people are critical thinkers and often have a singular point of view that procurement can harness for their own objectives. It is important to identify and track “cats” and forge open relationships with them.

These are the people who will give us an honest opinion about a new program or provide an independent perspective on incumbent suppliers. In a world where requests for feedback and input are often met with unsettling silence, cats can be relied upon to help us focus on what is mission-critical for the organization. As long as they are widely recognized as having an objective voice, a word of public support from a cat is often worth more than a formal endorsement by someone who routinely follows the rules.

Cats keep procurement “honest” on enterprise alignment.

Procurement likes to think that we are doing the right things for the right reasons, but it is easy to lose perspective and start serving procurement’s needs first and the organization’s needs second. If this happens frequently, our performance metrics need to be revisited. If we can rely upon anyone to keep us on track, it is our cats.

Cats are indifferent to needs, desires, and priorities aside from their own. Buy from a new supplier to save less than a percent on an annual basis? That is unlikely to be worth the disruption to their routine. Endure a counter-intuitive approval process because it aligns better with the way our eProcurement solution works? You must be kidding. If cats are going to take a step, there has to be something in it for them – not just subjectively contributing to the greater good.

Feline humans are notoriously aloof, just like their animal counterparts. Non-compliance from them can be relied upon to spotlight existing problem areas in the procurement universe.

Even when procurement’s programs and recommendations are in the best interests of the enterprise as a whole, it can be immensely helpful to monitor the frustration level of cats. The potential consequences of their non-compliance remind us to communicate results and benefits in terms that carry meaning to internal stakeholders and people who will be affected by the change.

Working with cats (rather than natural herd animals) forces procurement to remember that we should be focused on sharing incentives and motivations rather than just insisting upon control. They may not make the job easier, but if you can win over a cat, you’ve really accomplished something.

Happy National Cat Day!

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on Friday, September 27, 2019 0

The following blog comes to us from Megan Ray Nichols of Schooled By Science.

Running a warehouse is never easy. Keeping everything moving is a major logistical task that requires good planning, foresight and skill managing people. Some warehouses run more efficiently than others. It may be how the floor is planned or how the operation is managed, but there is always room for improvement when it comes to efficiency.

Here are nine tips you need to know to make your warehouse as efficient as possible.

1. Schedule Regular Upkeep and Counts

If you're not already, you should be scheduling regular counts of the goods you have and inspect for damage.

Partial-count techniques like cycle counting can also be used if it's not possible or practical to count your entire inventory at regular intervals. You should also perform additional tallies of high-value and high-risk stock.

2. Optimize Your Layout

Maximize the square footage you have. Consider how products will flow through the warehouse floor. Go vertical if there is enough ceiling clearance. If possible, you can also bring in professionals to help you make your use of space more efficient. Another set of eyes on the floor will always be helpful. Their experience may pick out some unoptimized section of the warehouse where traffic isn't flowing as well as it could.

3. Regulate Floor Traffic

Even if your warehouse's floor layout is already optimized for the flow of goods, traffic can still be interrupted if you don't plan correctly.

Try to keep people who don't need to be on the floor off it. When organizing the traffic flow and layout of the warehouse, make sure you're not sending anyone out that doesn't need to be there. From receiving to shipping, keep business transactions and staff away from the flow of goods through the warehouse.

4. Use a Warehouse Management System (WMS)

You don't need to be the only one figuring out how to make your warehouse as efficient as it can be. Use technology like a warehouse management system (or WMS) to help you manage internal logistics. A WMS can help you with floor layout, analyze current stocks, and demand and assist with inter-facility communication.

If you're not currently using a WMS, integrating one may take some time. The benefits, however, are almost certain to outweigh the short-term adjustments.

5. Go Digital

Paper counts work well enough, but require reproduction and bulky physical storage. A lot of time you're just going to be scanning them in anyway. Switch from paper to digital. Making this process paperless will save on record space and make the analysis easier. Without paper records to digitize, a lot less data entry and scanning will be required.

6. Label Everything

One of the easiest ways to streamline the picking process is through meticulous labeling. Proper labels will help workers find and stock or deliver the correct items without having to ask supervisors or other workers for directions or help. A good labeling system will also make counting easier — no mystery items to account for. To get the most out of your labels with the least increase in labor, include tag checks in regular counts. This will help weed out any mislabeled or unlabeled items.

7. Stock Based on Demand

Avoid overstocking certain items by stocking based on current demands, rather than hoarding inventory or guessing what you'll need in the future. Back up any intuition about how much to stock a given item with hard numbers. You can also implement demand planning so you can adjust your stocks based on patterns in demand.

8. Implement Better Safety Standards

Mistakes and injuries are costly, require work stoppages and make employees feel less safe. According to OSHA, injuries are more common in warehouses than other facilities. Relaxing safety standards may seem more efficient in the moment, but it won't benefit you in the long run. It can even be a violation of OSHA guidelines. Better safety standards and training comes with short-term costs, but preventing mistakes is much cheaper than paying for them.

9. Add Quality Control Measures

A good way to avoid having to double back and fix your errors is to catch them in the process. Adding additional quality control steps to your warehouse workflow will prevent costly mistakes and do-overs. You don't want to be in a situation where you're on the hook for a damaged or incorrectly picked item. Quality control can prevent that.

Warehouse Management for Better Efficiency

Running a warehouse is always going to be a major logistical task. Good management requires making things organized for both you and your workers. You can also optimize things further by adding technology like digital counting or a WMS. Even simple fixes to layout, or the addition of steps like quality control, can save huge amounts of time and resources at any warehouse.

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on Tuesday, September 17, 2019 0

This blog comes to us from Kelly Barner, Owner and Managing Director of Buyers Meeting Point. It originally appeared on All Things Supply Chain. 

“Some executives used to think of procurement as the place you send staff away in order to never see them again.” ~ Carlos Mena, Remko van Hoek, Martin Christopher, Leading Procurement Strategy: Driving Value Through the Supply Chain

In the past, and as the quote opening this post suggests, it was not uncommon for a career in procurement to be an assignment rather than a choice. I didn’t choose a career in procurement, and the same is true of many of my colleagues all the world over. But things have changed.

Procurement has engaged in a multi-year journey to ‘transform’ into bigger, smarter, faster, better version of ourselves. Procurement has received constructive criticism in droves: “You’re too slow.” “You’re too strict.” “You don’t understand what the business needs.” At times it was crushing or infuriating to remain open to this (often unsolicited) feedback. One thing we can’t say, however, is that procurement was paralyzed by it.

We streamlined our processes. We upgraded our technology. We developed category expertise or found consultants that could deliver it quickly and cost effectively. In some cases, we even provided the business with direct access to procurement solutions so they could make their own sourcing decisions. We’ve been a flurry of activity, branching out in new directions and boldly facing new challenges.

And a funny thing happened while we were making all of these changes; transformed procurement became an identity, one that we own and are proud of because we built it ourselves. Bright, energetic young professionals are choosing procurement for themselves, and those of us who have been around for a while are seizing the opportunity to be more innovative and value oriented.

But what about our skills? Most of what you read about procurement transformation suggests that part of making the transformation possible is formal training and development. It might even include recruiting new team members who are better suited to this brave new world than existing employees. I disagree. I believe that the very skills required to stage a transformation are the same ones that procurement needs to thrive afterwards.

Multi-form Communication

Selling the executive team on the need for a transformation is no easy feat. For procurement to pull this off, we need to excel in speaking, listening and reading others’ body language. We must be able to interact well in person and virtually with different levels of internal colleagues as well as strategic supply partners.

Influence & Execution

Before you can become influential you have to get things done, but the inverse is true as well. It is very hard to get things done without influence. Procurement has been slowly but steadily climbing through the ranks, especially since the Great Recession of 2008-2009. We’ve held on to the improved reputation we earned as a result of our cost containment efforts, and have used it to open doors and sway enterprise opinions on increasingly important decisions.

Strategy & Vision

It is one thing to be strategic, but it is another to dream up your own visionary plan to work towards. This requires creativity and an appreciation for the true potential value that procurement and supply chain can offer. As our vision for transformed procurement has become clearer, we’ve been able to put various strategies in place to make it a reality… sooner rather than later.

Closing Thoughts

Many of the traditional skills required to work in procurement (i.e. sourcing, analysis, negotiation, supplier performance management) are easy to learn or have been automated. Not having them is no longer a barrier to earning a strategic position in the function, nor is having them a guarantee of a job. Instead, broadly capable candidates, ones who chose to apply their many talents to procurement, are transforming the talent landscape with their presence. As long as procurement can stay hungry and keep the transformational mindset central to our efforts, we will continue to attract the best and brightest because we are their equals.

Which returns us to our focal question: can a tactical procurement team transform itself or does strategic talent need to be in place first?
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on Monday, September 09, 2019 0

This guest blog comes to us from David Madden of Exchanger Hub.

With rapid e-commerce growth and more packages on the road than ever before, more companies are outsourcing their shipping services to third-party logistics companies in order to save money, improve customer service and streamline their supply chains. The global 3PL market is expected to be worth $935.31B by 2020 and shows no signs of slowing down.

If your company is thinking of investing in 3PL, there are plenty of factors to keep in mind. This company will be responsible for delivering packages to your customers and, ultimately, will become the face of your business. Use these tips when searching for a 3PL provider, so you can find the right partner for your business.

1. When Should You Invest in 3PL?

Before you start searching for a 3PL provider, you need to make sure this investment is the right choice for your business. Many companies lack the assets necessary to deliver their own products to customers. Investing in 3PL simplifies the shipping process, helping these companies focus on improving their products and services.

Ultimately, investing in 3PL should save your company money and increase your bottom line. You should compare the cost of delivering these goods yourself with the cost of investing in 3PL. If you decide that investing in 3PL is the right choice for your business, your 3PL provider should have a track record of helping clients reach their business goals, usually by improving customer service and increasing the number of sales.

If you’re new to the world of shipping and supply chain management, you’ll probably be better off hiring a 3PL provider. Keep these considerations in mind when comparing different providers.

2. Is Your 3PL Financially Stable?

 Your 3PL provider should have a solid business model that guarantees their long-term success. Nothing could be worse than having a 3PL fall apart on you, completely derailing your ability to deliver packages and meet your customers’ needs. It’s not uncommon for new clients to ask 3PL providers for a financial statement or a list of current and previous clients. You can use this information to make sure the company will be around for the foreseeable future.

You can also find out how the company tends to deal with its partners. Do they have trouble making payments to the 3PL provider or do they regularly dispute compensation? Look for providers with a strong financial portfolio and lasting partner relationships.

3. Does Your 3PL Have a Good Reputation?

 Talk to some of the providers’ partners to find out if they can deliver on their promises. Does the company have a long history of fulfilling orders on time? If they occasionally run into trouble delivering packages, what was the reason for the delay? How does the company respond to delays, so they don’t happen again in the future? The company should keep their warehouse organized to make sure they can deliver goods on time.

They should also pack their shipping containers carefully, so they arrive at their destination in mint condition. Research the history of the company to make sure they can meet your needs.

4. Does Your 3PL Have a Central Location?

Choosing a 3PL provider with a central location or multiple distribution centers is key to a successful supply chain strategy. Learn about the kinds of assets the company uses to make deliveries, where your products will be stored as they make their way through the supply chain and how quickly they can reach their destination. Ideally, the company’s warehouses and distribution centers will be close to major highways, airports, ports and railways to speed up the fulfillment process.

5. Can Your 3PL Scale with Your Operations?

Hopefully, your company will grow in the future, so you need to find a 3PL provider that can scale with your business. If your company suddenly takes on a slew of new customers and orders, launches new products or wants to offer faster delivery options to compete against the likes of Amazon, will your 3PL provider be able to keep up? Talk with executives from the company to learn more about how quickly they’ll be able to scale with your operations. Use big data and predictive analysis to better anticipate your needs and share them with your 3PL provider.

6. Does Your 3PL Have the Latest Tracking and Supply Chain Equipment?

Think twice before investing in a 3PL provider that doesn’t use the latest supply chain technology, including automatic pickers and stockers, supply chain management software, GPS trackers and the IoT. These devices are designed to create more transparency and reliability in the supply chain, so you and your customers know exactly where your products are at all times. 

If your 3PL provider doesn’t offer services such as real-time tracking or expedited shipping, you will likely have trouble meeting your customers’ needs, especially if your competitors and their 3PL providers offer these services. 

7. How Will You Monitor Your 3PL?

You also need to figure out how you’re going to audit your 3PL provider. Set up an internal team that’s responsible for monitoring the company, including their ability to deliver packages on time. Ideally, you should have regular access to this data, so you can hold the company accountable if they regularly lose packages or run into unexpected delays. 

You should also be able to track the success of your investment in 3PL, including the impact on sales. Over time, you should see a noticeable uptick in sales and customer service rates as your 3PL provider expands your company’s ability to service your customers. 

You’ll also need to reach representatives from the company on a regular basis to make sure everything is going smoothly. You’re bound to have questions along the way, so reliable communication is essential to a successful partnership. In fact, 73 percent of shippers interact with their 3PL on a daily or hourly basis. Come up with a game plan for keeping in touch with your 3PL provider, so you can stay in the know every step of the way.

Stay Competitive

More companies are investing in 3PL than ever before. Compare different providers to make sure your company is investing in a reliable shipping partner that can help you accomplish your goals, so you can stay ahead in an increasingly competitive industry. 

Author Bio: David Madden is an efficiency expert, as well as being the Founder and President of Container Exchanger. His passion and business is to save companies money through the use of used reusable and repurposed industrial packaging such as plastic and metal bulk containers, gaylord boxes, bulk bags, pallets, IBC totes, and industrial racks. He holds an MBA as well as a certificate from Daimler Chrysler Quality Institute for completion of six-sigma black belt training.
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on Tuesday, September 03, 2019 0



This guest blog comes to us from David Madden of Exchanger Hub.

Got something to ship? Whether you’re a major ecommerce store shipping packages to consumers all over the world or you’re trying to send an urgent package to a colleague across the country, you’ll have to choose between air freight and ground shipping. From a business perspective, choosing one shipping method over another can have serious implications for your bottom line and your company’s reputation. Both methods come with their fair share of pros and cons, including cost considerations, travel time and safety concerns. If you’re trying to decide between these two shipping methods, learn more now about the benefits and drawbacks of each so you can make the right decision for your business.

Air Freight – Pros 

Sending a package using air freight shipping will be much faster than using ground shipping. Packages can fly across the country in just a matter of hours, while it can take a freight truck several days or a week to get from one side of the country to the other.

You also don’t have to worry about dealing with as many unexpected delays with air freight shipping compared to ground shipping. Just like boarding a passenger plane at your local airport, planes run on a tight schedule with clearly-marked departure and arrival times. You can expect your package to arrive on time with minimal interruptions. This makes it a great option for urgent orders and perishable items like produce and meat.

The chances of your shipping crate being stolen or tampered with are also much lower when you choose air freight shipping. Security is an integral part of the air transportation process as every checkpoint is tightly managed by airport personnel.

Businesses and consumers alike have embraced the benefits of air freight shipping. According to the International Air Transportation Association, demand for global air freight shipping grew by 9 percent in 2017 and, in North America, demand increased by 5.4 percent.

Air Freight – Cons 

Air freight shipping usually costs quite a bit more than ground shipping, considering this is usually the fastest delivery option. Airlines spend a fortune on fuel, airport personnel and tight security measures, so your business can expect to pay a higher price than you would normally pay for ground shipping.

There’s also a chance that the occasional tropical storm or blizzard will push back your delivery date. But these kinds of delays tend to be less frequent and more predictable than the kinds of delays that come with ground shipping. Driving across the country means having to deal with construction, road closures and frequent stops. A flight usually only lasts several hours, so the window for weather delays is much shorter.

Your package will also face some size and weight limitations. A plane can’t carry nearly as much weight as a truck. When you look at the total weight of shipments per transportation mode, you see that ground shipping easily surpasses air freight shipping year after year. In 2015, the total weight of the shipments that traveled by ground was over 10,000 million tons, while air freight shipping saw a total shipping weight of just 10 million tons. 

The airline may also prohibit certain chemicals and hazardous materials, or you may need to pay special handling fees for these substances. You can take a look at the Dangerous Goods Regulations for more information on whether you can ship a certain item using an air freighter and how to properly ship these kinds of items. Shipping one of these substances may require you to buy a shipping container that’s specially designed to keep these substances safe and intact. Traditional gaylord boxes or plastic shipping crates may not offer enough protection for these materials.

Ground Shipping - Pros

There are fewer package limitations when you choose ground shipping as opposed to air freight shipping, which makes it a good choice if you’re looking to ship heavy, large or hazardous materials. 

You’ll also save a lot of money if you choose ground shipping. The rates tend to be a fraction of those associated with air freight shipping services. All you’re paying for is gasoline for the vehicle, maintenance fees and the driver’s time, instead of costly airline fuel, dozens of airline employees and increased security measures.

Ground Shipping - Cons

Of course, ground shipping will take longer than air freight shipping. But it’s a good option, if not the only option, if your destination is close by. It could take anywhere from several days or an extra week for your package to arrive if you’re shipping long distance. The driver will need to make several stops along the way, which can hold up the transportation process considerably. 

Traffic, road closures and the weather can also complicate matters. Flight delays tend to be easier to predict considering it’s only a few hours long, so you’ll quickly know how long these delays might affect your delivery time. But when the package is traveling on the road for days or weeks at a time, all kinds of unexpected interruptions and weather delays can easily impact travel time, making the final arrival date difficult to predict in some situations.

There’s also a greater risk of having your package tampered with or stolen along the way. Ground shipping comes with fewer security checkpoints and less package surveillance than air freight shipping. Packages may sit on the truck or van unsupervised while the driver completes a delivery. 

Choosing the Right Shipping Method

Choosing between these two methods all depends on your shipping needs. If speed is of the utmost importance, you're better off with air freight shipping. Ground shipping will save you money - which may be important for a business that ships hundreds or thousands of packages a month. Maybe you need to ship a sensitive item. In these instances, you'll benefit from the additional security provided by air freight shipping. It's essential to consider every variable and seriously reflect on your organization's priorities. The right level of effort and strategic planning will ensure you select the right method and enjoy successful deliveries every time.


Author Bio: David Madden is an efficiency expert, as well as being the Founder and President of Container Exchanger. His passion and business is to save companies money through the use of used reusable and repurposed industrial packaging such as plastic and metal bulk containers, gaylord boxes, bulk bags, pallets, IBC totes, and industrial racks. He holds an MBA as well as a certificate from Daimler Chrysler Quality Institute for completion of six-sigma black belt training.
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