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In the era of growing technological advancements, the landscape of parcel spend management has undergone astonishing transformations. The concurrency of global trade, e-commerce, and innovative logistics solutions has given rise to a complex web of small parcel carriers, each contending for a share of the parcel shipping market.  

Effective parcel spend management is no longer an option but a critical requirement for businesses of all sizes. Providing timely delivery while controlling costs is essential to remain profitable in today’s dynamic market. Companies that fail to implement efficient and cost-effective ways of managing parcel spend will undoubtedly fall behind. 

Advanced data analytics, rapid software solutions, and real-time tracking capabilities have allowed businesses to gain critical insights into their shipping expenses, the performance of their carriers, and what their customers want. The information is easy to understand and helps companies make rational decisions. 

Effective parcel spend management that utilizes these technological advancements can prove to be a differentiator in the upcoming holiday season. With major celebrations knocking on the door, the market always experiences a surge in online shopping, resulting in greatly increased parcel shipping volumes. Lack of proper parcel spend optimization during peak periods can increase shipping costs and result in delivery challenges. 

A vital question that haunts many businesses is: What is the preferable way to avoid deflating profits and potential customer loss due to shipping challenges? For starters, companies can navigate through erratic times using parcel spend optimization strategies. 

Parcel spend optimization is a vital aspect of parcel management that helps organizations reduce their small parcel shipping expenses. It enhances overall efficiency, improves productivity, and positively impacts your bottom line.  

This article delves into the factors that make parcel spend management strategies successful. So, hang tight — here we go. 

The critical success factors for effective parcel spend management are: 

Data transparency & analysis: Technological advancements have enabled companies to streamline parcel shipping operations by effectively utilizing shipping data. This includes analytics, rate optimization, and real-time tracking for informed decision-making. Essential data points such as shipping volumes, carriers, destinations, and costs are collected, consolidated, and analyzed for successful parcel spend management implementation. 

Shipping rate negotiation: Another factor for success lies in how well you negotiate (or renegotiate) your shipping contract with your carrier(s). A skillful negotiation is necessary to ensure favorable shipping rates and terms. Key elements of the negotiation process include conducting periodic agreement reviews, comparing and benchmarking current rates with industry standards, and employing modern technology such as data analytics to identify new cost-saving opportunities. 

Service level optimization: It’s crucial to strike the right balance between the cost and the level of service you’re receiving. To achieve this balance and optimize your parcel spend, you must carefully evaluate the available services and then select the most cost-effective options that will help you meet your customers’ expectations. It’s essential to avoid paying for speed or features that may not be required for your specific needs. 

Real-time tracking & visibility: This is a valuable tool for businesses to enhance the customer experience and streamline operations. Providing customers with up-to-date information on their shipments’ status empowers companies to improve transparency, build trust, and promptly resolve any address-related issues. Additionally, businesses can optimize delivery routes by analyzing the data collected through shipment tracking, thus reducing transit times and improving efficiency. 

Packaging optimization: Carriers use dimensional weight as a pricing factor for parcels, making the package’s size as crucial as its weight. Minimizing the shipment’s dimensional weight is the key to getting the most cost-effective shipping rate. Selecting the correct package size, using efficient packing techniques, and ensuring the parcel is securely packed to prevent damage during transit are all important. 

Invoice audits: Businesses must review carrier invoices regularly to detect and rectify billing errors or discrepancies. This ensures accuracy in billing and prevents the incurrence of unnecessary expenses. By auditing your carrier invoices, you confirm that you are paying only for the services you received, which helps maintain financial accountability and avoid unnecessary expenses. 

In the current dynamic market, where customer expectations and shipping volumes are changing rapidly, companies need to implement effective parcel spend management strategies in order to maintain profitability and deliver a positive customer experience. By embracing these strategies, companies can effectively manage their shipping expenses, optimize shipping processes, and enhance visibility across their supply chain.  

Parcel shipping has picked up the pace post-Covid, but with shipping becoming ever more expensive, you need to negotiate your carrier contracts as precisely as possible, because those costs could very well be the difference between profit and loss. For an effective negotiation, you need a technologically driven parcel contract negotiation service.

For most companies, shipping and delivery through external carriers occupies a substantial chunk of their annual budget. This is why businesses seek the assistance of the best parcel contract negotiators and their contract negotiation expertise.

TransImpact is the pioneer of the parcel contract negotiation industry and can assist you in parcel contract optimization. Via our proven negotiation process, proprietary technology, and, most importantly, the market expertise of our people, we find savings that no one else can. Our flawless winning record and guaranteed parcel cost reduction ensure that you get:

100% Savings – We find savings for every shipper.

Our expert team finds 15%–40% of meaningful savings for 85% of the businesses that seek our parcel contract negotiation services.

This year our average annual savings are 23.6%.

Weekly Report Card – We give you actual figures of optimized and real savings so you can hold us accountable.

Keep Your Carrier – Our coach and counsel method ensures that your relationship with your carrier is not jeopardized.

To give you an ace up your sleeve for your next parcel contract negotiation, here are a few important factors to know about:

Get a summary of your shipping profile – An in-depth picture of your shipping profile will provide vital insights like your shipping volume per annum, typical weights and dimensions of your packages, rate surcharges (if any) and how they affect shipping costs, and more. Every business has a distinct shipping profile, and you need to know yours in order to negotiate effectively with your carrier.

Do an in-depth analysis of your current contract – Take your time and dive deep into your current contract. Learn about your existing rates and your shipping needs. Understand how the carriers are pricing their services. The analysis will help you connect the dots, as it will portray a clear image of the critical areas that need to be adjusted in the negotiation so that you can save more.

Avoid making hasty decisions – Once you understand your contract and your shipping profile, do not rush into the negotiation. Parcel contract optimization does not happen with a snap of your fingers. It is a step-by-step process of analyzing your shipping data, inviting bids from multiple carriers, and waiting for the approval of your proposal. The process demands time; if you don’t have it, hire an experienced parcel negotiation expert like TransImpact. Our typical small parcel contract negotiation takes 4 to 6 weeks with minimal time commitment from you.

Never burn the bridge – Small parcel contract negotiation goes beyond “quid pro quo.” It is a chance to develop a robust positive relationship with your carrier. Avoid going into negotiations with the mind set of beating your opponent. Try to reach an agreement that is beneficial for all parties.

Avoid restricting focus solely to rates – It is evident that when you enter negotiations with carriers, your key focus is to reduce your shipping cost and minimize its impact on your overall revenue. However, you should also look beyond rates to less tangible factors such as technological superiority, customer service, and on-time delivery. You can make a list of the factors that are important to your business.

Employ the right technology and expertise – Parcel contract negotiation is a daunting task. You must be patient, learn highly technical shipping vocabulary, and collect as much information and insight as possible. Still, you will lag behind the expertise of the carrier reps. And you likely want to focus more on growing your business than negotiating shipping rates. That’s why we say leave it to the experts.

TransImpact pioneered and has led the parcel contract negotiation industry for more than 15 years. We know that negotiating contracts requires expertise and experience. Our experts have 800+ years of combined experience in the industry. We have a proven 5-step negotiation process from cost-free analysis to contract compliance. Our proprietary technology enables us to minutely analyze your shipping data and pinpoint the areas where you can reduce costs.

The most stubborn and expensive issue business leaders face is related to demand planning. 

Demand planners who rely on poorly researched demand planning disappoint customers, bleed profits, and lose market share to more efficient and tuned-in competitors.  

Gut instincts and spreadsheets cannot understand the sheer scale and complexity of the supply chain management operations. That is why, in order to thrive in this competitive market, industry leaders use technologically backed demand planning software to get consistently more accurate results. 

So, how can you meet these demand planning challenges and improve your profits and future sales? 

Before finding the solution to these challenges, we need to address them first. Let’s find out more about the challenges the demand planners face during the planning process: 

1. Gathering Information from Across Different Departments 

Creating a demand plan means gathering information across all the different departments in your business, which includes activities like sales reports or promotion information. So, what’s the problem? Most of these departments do not have a dedicated interest in providing you with comprehensive information reports on time. This activity takes time and adds extra pressure on your already delayed process. 

2. Making Sense of Contrasting Data 

Collecting information from various multidisciplinary departments in your organization means managing spreadsheets. Lots of differently formatted spreadsheets. How can you figure out what kinds of specific changes were made to the process if someone has already forgotten to update it in the spreadsheet? That’s why data automation with the help of demand planning tools is very crucial for your business. 

3. Creating the Demand Plan  

Once you have diligently gathered as much data as you can, you upload it into your demand planning systems and create your own demand plan. But once again – something just doesn’t feel right. Once you work up your magic, it feels like the problem is still unresolved. Department data and historical data manually updated in the spreadsheet are helpful at some point, but it's only giving you a two-dimensional forecast. If only your well-experienced demand planning skills were powered by real-time data and essential demand indicators to create an updated comprehensive forecast. 

4. Enabling Teams to Implement the Demand Plan  

Your demand plan is finally approved. Awesome! Once your demand plan is implemented, it will generate impressive results, right? We wish it could have been that simple. But as it turns out, the supply chain team from your organization didn’t even implement your plan because they were not able to see or understand any of the assumptions you put into it. Sooner or later, because of the lack of implementation, your business ends up with overstocked or understocked inventory. This is where you need a suitable demand planning tool to help you thrive. 

5. Getting Blamed for Unsatisfactory Forecasting Accuracy 

After overcoming all the silos-related hurdles and dealing with numerous technical delays, your management is still unsatisfied with your demand planning methods. And the worst part is you get all the blame for poor on-shelf availability or excess inventory. 

Whenever you raise an issue with the management, all you hear from them is their instance on results, not problems. As you have unquestionably realized, dealing with these challenges that you face on a day-to-day basis is going to take more than an agile methodology and a whiteboard cover. 

6. A Fragmented Approach to Demand Planning  

The digital transformation over the past few years has enabled customers to use various omnichannel platforms for their shopping needs. Be it your bricks and mortar store or the e-commerce websites, in this scenario, you cannot predict accurately on what platform the order will be placed by customers. This ultimately leaves you with overstocking at one inventory location and understocking at another. If your demand forecasting is backed with state-of-the-art and automated demand planning software, then you won't have to worry about what platform the customer is going to use for their order purchase. 

7. The Dynamic Nature of Your Business 

The only consistent thing in your business is its inconsistency. Its ever-changing format makes it difficult sometimes to create an accurate demand planning method. 

There is a host of factors that affects the demand planning process, like changing trends, customer behaviors, industry standards, and constantly evolving competitors' strategy. To deal with such problems, you need an automated dashboard to help you with all your demand planning requirements. 

Fortunately, There’s a Solution  

One efficient way to find a solution to this problem is to connect, with an expert data professional who can help you understand the complexity hidden in big data, such as market trends and performance. This better understanding will eventually help you make better decisions through actionable insights for reducing costs, increasing margins, and enhancing the overall quality of the product. 

Take a Deep Dive into the World of Supply Chain Management

In today's business environment, there’s a lot of mphasis on how firms can and should utilize cloud-based services to get more accurate insight from their data analytics and enhance their sales and operations planning. Excel spreadsheets may make it difficult for businesses to achieve proper quota setting, sales budgeting, and sales and operations planning. Most departments realize they waste too much time maintaining and organizing data instead of analyzing it. TransImpact offers you the best Sales and Operations Planning Software to integrate across your Supply Chain Management. 

The following are the advantages of integrating TransImpact S&OP Software with your business: 

1. Incorporate data from your CRM into your planning and forecasting process. 

More than 75% of the best-in-class solutions give enterprise-wide visibility on the size, timing, and phase of transactions, providing an on-demand perspective of where the company is headed. In turn, this aids stakeholders in their corporate budgeting, staffing, and project planning, which may lead to more precise sales and operations forecasting. 

2. Map out your sales data and adjust your strategy as needed. 

A centralized database with key metrics is essential for effective sales and operational planning. Each team will be able to answer the question "how am I doing?" by looking at their achievement against the plan and general performance in real time. Another factor that might improve your ability to forecast sales is the speed and ease with which you can see sales patterns and KPIs. 

3. Employ proper methods to establish a standardization process. 

For your financial team to effectively manage their pipelines and quotas, it is crucial to establish and use a standardized framework. This ensures that the company is making the most of its efforts and shifting its focus to the operation areas producing results. You should look for tools that let you combine the data from your CRM with your planning software so you may evaluate opportunities based on their likelihood. With this method, you may improve the precision of your sales and operations planning and your financial projections. 

You can streamline your supply and demand calculations with the help of TransImpact's Sales and Operations Planning software. Enabling planners to work together across company departments, comprehend financial implications via what-if scenarios, and readily alter planning models may speed up the development of your S&OP process. 

Why Choose TransImpact S&OP Software? 

TransImpact Sales and Operations Planning Software provides: 

Real-time aggregate or granular supply/demand balancing with clear business rules that display the effect on the whole statement of profit or loss 

Prepare for the unexpected by running "what-if" scenarios to figure out what to do. Compare situations even when supply chain master data changes. 

Have a system that ensures continuous feedback and improvement for plan integration across your finance, sales, and marketing departments. Get your whole supply chain, from manufacturers to retailers to consumers, working together in one convenient location. 

Maintain a record of everyone who has contributed to the S&OP procedure. Use key performance indicators (KPIs) and a custom workflow method to monitor your workflow's success. 

Features of TransImpact S&OP Software 

TransImpact's S&OP software streamlines the business's yearly planning cycle with its innovative features as follows: 

Empowers teamwork management 

Identifies potential obstacles and formulates strategies to overcome them 

Uses scenario planning to verify production plans will provide desired results. 

Using Microsoft's SQL technology, creating personalized reports is a breeze. 

Assess a company's performance's past, present, and projected future to guide its direction. 

Encourages involvement from the departments of sales, marketing, operations, planning, buying, and inventory 

Provides a snapshot of the business's top-level metrics, including sales, bookings, inventories, production, shipments, and backlogs for a quick examination. 

A full-featured enterprise resource planning system 

The three parts of TransImpact's sales and operations strategy are laid out for easy comparison. Planning for stock, operations, and revenue are all addressed here. 

The TransImpact S&OP software provides an efficient means of seeing and comparing the plans of several departments. 

Closing Thoughts 

Improve the efficiency and effectiveness of your S&OP process with TransImpact's Sales and Operations Planning software, which offers a real-time, collaborative solution to help you get there faster. Our S&OP software will help you bring your teams together and improve communication among them. If your sales, inventory, and operations departments have better access to information, they can share knowledge and make more informed decisions. 

Supply Chain Planning & Forecasting

How Can You Plan Your Demand Accurately? 

Demand Planning Software Company