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Combination of two or more modes of movement of goods, such as air, road, rail, or sea. Also called combined transport.
Right Spend Optimization starts with the allocation of the sales orders, each with their destination(s) and cost(s). The costs represent the baseline – where Freight Spend Optimization starts. During allocation, the inventory positions are taken into account in the allocation strategy. This results in inventory sourcing decisions for the sales orders to optimize Freight costs. For example, during allocation, an optimum is found from which inventory position the customer will be delivered. This will result in Inter company transport between Distribution Centers to optimize Freight Spend before the sales orders will be transported to their customers. Once the allocation is finished, for every sales order you have an inventory source and delivery destination(s) with inter company transport orders.
The next step is planning calculations for delivery, based on all modes of transport. These calculations are based on the agreed rate cards for your major providers of transport. Planning also takes into account other variables such as traffic restrictions, shifts, routes, load capacity, CO2 or other sustainability parameters, etc. The outcome of the planning calculations is optimized Freight Spend delivery routes that represent real freight spend.
Once allocation and planning are complete, you can start to monitor your Supply Network real-time. Since the planning is accurate, this process is based on a Management by Exception principle. Event Management capabilities will alert the transport planner(s) when a delivery is not executed according to plan.
