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Detailed below is a (non-exhaustive) checklist of what we would
expect to see from a best of breed organisation in respect of international
freight management.
- Negotiated group-wide freight rates
for
all trade lanes served. Not only does global leveraged
purchasing reduce shipping/logistics
costs but it also dramatically reduces
the supplier base whilst improving supply chain
co-ordination.
- Metrics and internal cycle analysis. The
ability to measure operational efficiencies
is known as metricing. Metrics are
essential because they allow organisations
to monitor internal and external practices. The ability to gauge any
system allows companies to utilise best practices and monitor red flags. Metrics
are also useful in providinginformation
to gauge actual vendor service levels against promised service levels. The
ability to track shipments throughout the supply chain allows a company to
verify that they are receiving the best overall
service possible, at the
best price.Results of these measurements,
metrics, can be on a cycle time or cost basis. For metrics to be useful
to an organisation it must contain four characteristics:
- Validity - concepts
that are intended to be measured are actually
being measured
- Reliability - the metric
is constant. If circumstances do not change results
should stay the same
- Practicality - results
are relevant to processes of the
organisation
- Salience - measurements
must have a meaning to those
who will be implementing change and have importance
to overall systems.
- Minimised, and regularly reviewed supplier
base. In negotiating freight rates on a global basis
the supplier base can be vastly
reduced to a core of specialist service
providers, consequently this enables
a considerably greater degree of control and management
of
these vendors.
- Continuous review and benchmarking. To maintain
a firm grip on overall shipping/logistics
efficiencies and expenditure it is essential that logistics processes and
costs are reviewed regularly not
only to ensure best practice is being
achieved but also to keep a tight
reign on freight expenditure which
can often increase dramatically before anyone
really notices.
- Global infrastructure. Developing and maintaining
a global shipping/logistics infrastructure to
support the entire business is very important if you are to be successful in
managing the global
sourcing, transportation and distribution
of goods, anywhere in the world. There has to be an organised methodology
on how the global logistics function is managed, clearly defining each
individual’s
remit and responsibilities.
- Information Technology. Today’s
best of breed organisations cannot
survive efficiently without
utilising the latest technology available. The accessibility of the internet
has changed the way the freight forwarding and logistics industries have conducted
their business. Today’s IT solutions can dramatically
accelerate the velocity of a supply
chain. Whether you’re
supplying, buying or facilitating
the movement of goods worldwide, you can
now have complete electronic connectivity
to your existing systems, internal
and external customers and transportation partners – international
and domestic, across all modes.
- Commercial. In order
to minimise the risk of commercial
exposure it is essential that all
members of the global logistics team are trained logisticians
with detailed working knowledge
of international
trade, in particular Incoterms 2000,
International Letters of Credit, Marine Insurance, Hazardous Goods, and Export & Import
Compliance. It
is also essential that the best use
of trade terms are used when negotiating
contracts to eliminate unnecessary costs.
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