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Federal Acquisition Service
U.S. General Services Administration
Procurement Best PracticesOptimizing Your Small Parcel Program
GSA Transportation Forum
March 22, 2012
Federal Acquisition Service
Today’s Topics
Small Parcel Best Practices & Agency Considerations
GSA PayPort Express – Maximizing Value for Federal Agencies
Brief Demonstration
Federal Acquisition Service
Small ParcelBest Practices & Agency Considerations
Federal Acquisition Service
Questions to Ask Yourself About Your Small Parcel Program
How do you know how you are doing/ what opportunities exist?
How do you measure it?
What are the largest opportunities/ elements you key in on?
Where and how do I get the information?
Federal Acquisition Service
Managing Small Parcel Shipments is Increasingly Challenging
Cumbersome, complex contracts
Over 85 + billable accessorial charges
Some shippers do not (cannot) audit. “It’s such a small piece of my overall freight spend that it is not worth my time”.
Downward movement in Tier levels
Identification of “Landed Costs”.
What was a simple service has become an extremely difficult mathematical exercise
Federal Acquisition Service
Information Provides a Better Approach
Break Transportation into least common denominators/ elements
Benchmark each element
Develop strategy/ tactics to capture costs-set goals
Tie goals to business plan
Implementation of strategy/ tactics
Periodic review of results internally and with carriers
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Agencies Can Realize 3%-10%+ Cost Reduction in their Small Parcel Program
Process improvement:
order processing, optimization
Contract Management: information management,
financial workflow
Sourcing: assessment of current contract economics and
implications
Cost Reduction
2%-10% Reduction
2%-6% Reduction
3%-30% Reduction
Federal Acquisition Service
3 Important Factors to Optimizing Your Small Parcel Program
Analytics and Contract Assessment
– Rate analyses– Terms and conditions– Contract structure
Measurement– Data Management and Formatting– Budget Level Measurement– Scenario Modeling
Current relevant market knowledge
– Carrier pricing trends– Negotiation success– Key Market cost advantages
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Five Pillars that Reduce Agency Risk and Cost
Decision Management
• Contract Governance
• Mode Optimization
• Rate Optimization
• Network Rules
• User Authority/Rights
Audit
• Contract Terms• Rates• Rate Application• Logic/Rules
• Thresholds
• Alerts
Finance Validation
• Cost Allocation• GL Coding• Margin
Management• SKU Level Cost
Assignment
• Accounts Payable• Invoice Tracking • Account
management
• Accounts Receivable• Rebates• Credits
Interface
• Standard• EDI• PeopleSoft• Oracle
• Custom
• Data at the “base element” level
Data Warehouse
• Standard• Format• Archive Period• Reporting• Diagnostics
• Custom• Format• Archive period
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Multiple billing events effect each transaction… creating “cost gaps” that effect the ability to determine true landed cost
• Partially Visible• Partially Predictable• Manually Administered
and error prone
• Unpredictable• Spans multiple invoice
cycles• Manual, employee
dependent, error prone
•WMS/TMS dependent•Static Table Driven• Contract dependent and
variable
• Net pay after credit• Pay in full and credit• Credit across multiple
invoice periods• Reconcile to original
order Billing Period Adjustments and Credits Pre-
Shipment Cost
Estimate
In transit Adjustments
and Accessorial
Post Delivery Adjustments
and Accessorial
Landed Cost
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PayPort Express – Small ParcelMaximizing Value for Federal Agencies
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GSA PayPort Express Automates Small Parcel Audit and Payment
Web based system designed specifically for the unique needs of auditing and reporting small parcel transactions
Comprehensive rate/service audit, detailed reporting, prompt and accurate settlement functionality
Actionable data that allows shippers to take full advantage of cost recovery and cost reduction opportunities
All processes are systemic and automatic – no user intervention is required
Federal Acquisition Service
GSA PayPort Express Small Parcel
Prepares and Organizes invoices for Payment
Visibility to Accounts, Companies, Divisions, Customers
Contract Performance Auditing
Recovery of disputed charges
Financial: custom cost allocation, GL/ AR coding, matching
Information Management/ Data Warehouse
“You can’t Manage What You Can’t Measure”
Federal Acquisition Service
PayPort Express Small Parcel Feature Benefit to Agency
Audit Exception Credit Requests
Systematic request for credit/re-invoicing of packages Reporting on credits received Reports on outstanding requests Systematic application of credits
Accounting, General Ledger Coding
Visibility to all fields present on a freight bill General Ledger can be assigned at the detail or summary level All payments are settled and GL assigned at the summary in
Syncada
Information Mangement
Enhanced Reporting 100 + Standard reports web accessible, developed “real time”. Can be systematically created and emailed Financial, Customer Service, Engineering based. Ad-Hoc Reporting Capabilities Global reports or location specific shipping reports/ ability to
build custom hierarchy.Financial Trend Analysis 13 months of rolling history Individual shipping location or global organization Cost Savings opportunities Forecasting and Budgeting
Payport Express Small Parcel Feature & Benefits to agency
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Maximizing the Value: Reporting Examples
Report: Air to Ground Shipment Opportunities Air Service that could have shipped via Ground Service and still made the
same delivery date.
Report: Shipment Consolidation opportunities Savings associated with over packing/ banding.
Report : Allocation of Fully Landed Cost Provides breakdown of expenses comprising Fully Allocated Cost Per Package.
Report: Service Utilization Review summary or detail information of service used for a select period of
time.
Report: Accessorial Costs Review summary or detail information of accessorial expenses by category.
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Contract Management: Six Ways You Save Money
Time to Process Invoices Small package invoice processing, accruals, information
Audit and Recovery Contract terms and conditions are met
Financial Validation Proper assignment of landed costs/ unit costs for profitability analysis
Decision Management/ Contract Governance
Information/ analytics for engineering opportunities
Customer Service Revenue tier management, mode optimizationImproved visibility – proactive response
Carrier management Tools for formal carrier review process
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Brief Demonstration
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Simple Administration
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Quickly View Invoice Level Data
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Quickly View Waybill Level Data
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Quickly View Exception Causes
• Refunds are automatically corrected on invoice payment (FedEx), or contested for refund on future invoice (UPS)
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GL Coding and Quick Corrections
• GL corrections are easily made at the waybill or invoice level
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Query Tool
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Small Parcel Reporting
• Delivery Reporting• Financial Reporting• Package Detail
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Reporting- Trancode Summary
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Reporting- Air to Ground
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Manifested Not Shipped
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Reporting- Summary By Service & Zone
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Business Intelligence- Transportation Summary
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Conclusion
Adam Jackson
Citi Global Transaction Services, Public Sector North America
703.234.7306
Adam.W.Jackson@Citi.com