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How to Select the Right Shipping System for your Business: Part 1

How can you be sure you’re selecting the right shipping system for your business?  It’s the number one question every manager faces when weighing the costs and benefits of replacing a legacy system.  There is, unfortunately, no easy answer.  Shipping operations – and shipping software requirements – are more complex than ever; and there is usually no “out of the box” solution that fills most shippers’ needs.  Selecting a solution requires a certain level of trust that the software will actually perform as planned once it is configured for your needs.

In this series of posts, How to Select the Right Shipping System for your Business, we’ll examine how to improve your odds for success.  And for this inaugural post, we’ll consider the first important step:

Create a Shipping Requirements Blueprint

The first step every buyer should take is to create a shipping requirements document or blueprint that defines both “must have” and “preferred but not required” operational requirements.  Ideally, this document should be drafted before you even begin speaking with potential vendors.  The document doesn’t have to be perfect, but it is important to have a general workflow document to guide any dialogue with vendors.  Shippers who do so without it can unwittingly turn the control of the conversation over to the software vendor.

ebook logistyx quadrant Choosing a TMS for Parcel ShippingCreating the requirements document may seem like a daunting task, but it doesn’t have to be.  One approach is to take the existing documentation for your current system and use it as a starting point.  Odds are that your system may have changed since the document was created, but this can be noted.

As a next step, invite operational team members to help you map the existing and future shipping workflow on a whiteboard.  As you go through this process, try to avoid thinking solely in terms of replacing the functionality of the current system.  This is the time to identify current and future shipping needs that can deliver significant value to your business.

For example:

  • Are certain shipments processed manually due to billing, labeling, or document tasks your current system can’t handle?
  • Can your order entry department access the shipping system to quote accurate shipping rates on customer orders?
  • Are other departments such as sales, marketing, and purchasing able to access your shipping system to process non-warehouse shipments?
  • Are there other carriers you’d like to add to your portfolio but are prevented by current system limitations?
  • Are you planning to expand your e-commerce operations? Can your current shipping system accommodate this?
  • Are you prepared to handle new international customer orders as your e-commerce business grows?

The goal is to define and prioritize the specific deliverables you expect from the new system and the metrics you need to measure results.  If your mandate is to reduce transportation costs by 10%, what specific functionality is required to arrive at that reduction?  If you want to reduce surcharges due to incorrect addresses, what is required in the new system and how will you measure results?  These are just a few ideas to consider as you develop your requirements document.

Organization-Wide Dialogue is Critical

To ensure the new system delivers all the value it can, invite input from every department needing shipping information to do its job.  Although shipping systems are traditionally located in the warehouse, accurate shipping information is routinely needed by employees in purchasing, sales, order entry, customer service, and finance.

How would these departments like to access shipping information?  What information do they typically use, how do they obtain it, and how could you improve this?  What additional information would they like to have?

Organization-wide dialogue may take time and generate more feedback than planned, but it may also uncover great cost-saving opportunities that would have otherwise been missed.  For example, following are some issues raised by shippers:

  • “We have a shipment request sheet that is manually completed with the ship-to address, etc., then sent with the parcel to the shipping department, where it is manually keyed into the shipping system. This process is error-prone and time-consuming.”
  • “The big box stores require specific data to populate carrier reference fields for transmission to the carrier. We do this today by having the shipping operator read and key-in free form notes on the pick slip.  If there is an error, we are fined by our customer.  We’d like to automate this process.”
  • “Customer routing guides mandate that shipments be processed freight collect and/or third-party billing. Too many times we’ve erroneously shipped these orders “prepaid and add” only to have the customer refuse to pay shipping as specified in the routing guide.  I’d think that this could be done programmatically to eliminate the manual intervention.  Can you help?”
  • “We’d like the system to identify and flag shipment consolidations for us – both on domestic and international shipments. How can we do this?”

These are just a few examples of areas of opportunities that, once discovered, can streamline the workflow and reduce costs in areas that may have been overlooked.

Contact us today to discuss how our technology can quickly take your parcel shipping initiatives to the next level and stay tuned for more posts in this series that provide recommendations on how to choose the right solution to navigate the growing complexities of parcel shipping.