freight cost improvements

How Business Intelligence Reports track Freight Cost Improvements

How Parker Hannifin uses our Business Intelligence Reports to track Freight Cost Improvements for their business

According to Junior Pumipi, the National Warehouse Manager of Parker Hannifin Australia, Freight Controller’s Microsoft Power BI dashboard for Freight Activity and Cost is a great tool to track freight cost improvements and for providing visibility on their freight activity.

This dashboard shows Junior how they are performing by tracking six major KPI’s which are:

  1. Number of consignment notes dispatched
  2. Total dollars spent
  3. Number of charge weight kilos shipped
  4. Average cost per kilo shipped
  5. Average charge weight per kilo
  6. Average consignment charge

These six KPIs can be tracked and analysed by:

  1. Branch location
  2. Carrier and Carrier Service
  3. Receiver
  4. Australian geographic zone
  5. In trend over time

In consultation with Freight Controller, Junior has been able to see for himself how the cost per kg is directly related to the average charge weight per consignment, i.e., the greater the charge weight the lower the per kg cost of transport. This may seem a simple concept, however when the data over time, shows how strong that correlation is, it enables Parker Hannifin to clearly develop strategies like the consolidation of consignments and orders and have an informed conversations with their clients to clear the way for new productivity, win-win based tactics and techniques.

What is even more gratifying to Parker Hannifin is that they now can see the fruits of their labour and how following through on these strategies and techniques will consolidate even further transport savings.

Because Parker Hannifin have now used this dashboard for two consecutive financial years, Junior and his colleagues can show senior management how the costs and activity for their freight in Australia has improved over the last two years.  Without this tool, (and in many other businesses), the freight costs from year to year are tracked via the financial accounts, however this is method is flawed and does not provide the comparative data that is required to truly understand and control your freight costs. It cannot break down all the parameters involved in compiling freight costs and analyse the correlations between them, for example; only view them from a macro level.

Junior can now show that, even though total freight costs have gone up from one year to the next, the costs per kg has gone down by 10 percent when you take into account the number of con notes sent and the number of kg’s shipped.  Beyond those macro considerations Freight Controller’s dashboard can show how much Parker Hannifin is spending on freight to supply its customers.  It now has complete transparency when discussing their Free Into Store (FIS) and Freight Recovery policy options with customers, as well as salespeople within their organisation.

If other sales or operational policies change within their business, which leads to a freight expenditure blow out in a particular area of the country, or for a particular customer, Junior can quickly and easily see exactly what is going on and why the change as occurred.  He can even predict what may happen if his management asks him to model what the impact of policy change might be before it occurs.

If your business is still budgeting freight expenditure via a percentage of sales using financial accounts, then its time to look at a more modern and superior system to track freight costs improvements.  Once you start looking at what detailed, interactive analysis is available and how effective this tool can be for driving down costs and improving efficiency you will be delighted. Take that step and give us a call and ask for a demonstration and what insights we may be able to offer.

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