Last time, we tackled the topic of technology as a major cause of supply chain overspend. Here’s the second spot costing companies billions this year.
You will recall the mammoth $415 billion price tag U.S. companies paid this year due to supply chain mismanagement, according to spend management experts at NPI.
And while there are any number of places things can go off track, there are several specific areas where the majority of organizations spend more than they have to.
The first vulnerable area was technology. This go-around we’re highlighting the second of the three biggies: transportation.
Area #2: Transportation
No matter how your company delivers its goods to customers (or how you receive your supplies from your own vendors), there are a myriad of ways companies are charged — and are paying — more than they should.
Here are four areas you want to check first:
Fuel surcharges. Have your Accounts Payable department scour those bills – many organizations of all sizes overpay here. There are serious savings to be had: Estimates range from 12%-15%.
Overnight air. Does that shipment really have to go this most expensive shipping option? That’s one question every company needs to be asking. Encouraging employees to think twice could save you 25%-30%.
Refund recovery. Another task for the folks in A/P: Have them follow up on the refunds your organization is due based on billing errors or service shortcomings. It could nab you an extra 3%-4%.
Address corrections. This “little” adjustment is coming with a bigger and bigger price tag these days. The surcharge for address changes is 40% higher than just two years ago. Lower rates can be negotiated here.
Stay tuned – next time we’ll highlight the third and final area for supply chain overspending.