As a leading manufacturer and marketer of products for the healthcare industry, Encompass Group faces daily challenges with freight management.  These challenges are faced on both the inbound and outbound sides of the supply chain.  We have to insure that raw materials are being transported to the factories, finished goods are being moved to the correct distribution centers and that our customers are receiving their orders.  At the end of the day these obstacles break out into one of three areas:  cost, service or availability.  Our goal is to balance all three.

We are all painfully aware of how erratic diesel prices have been.  In the last ten years the cost of a gallon of diesel has been as low as $1.09 to a high of $4.76.  It is imperative that someone within your organization owns this line.  Encompass has found great success in partnering with a 3PL.  By working with a 3PL you can extend your own talent and experience quickly and easily and at a bottom line cost savings.  These experts act much like a GPO in being able to drive excellent rates and discounts.  Another critical factor on the cost side is auditing the invoices.  Again, a 3PL can assist in eliminating improper charges to both you and your customer.

Service from the parcel, LTL and TL carriers have improved tremendously.  The transit days have dropped as the entire supply chain has gotten smarter.  This has been driven by the cost to do business as well as pressure from suppliers and customers wanting, needing and expecting faster turns.  We rarely face not being able to get products where they are needed, when they are needed.  The challenge is can we, or the customer, afford the bill.

The balancing point to the cost and service pieces of the freight triangle is availability.  Today we have two strong providers in the parcel arena.  We have scheduled pickups and can depend upon them to hit their commitments.  This is also true with our LTL carriers.  Again, a 3PL can provide excellent support when dealing with the carriers.  If a carrier is not performing or their costs rise, there is always someone else ready to take the load.  The capacity for TL’s has been up and down based on the cost to operate.  There are TL dedicated 3PL’s to assist in this arena and we have had success here as well.

As the connectivity between customers, suppliers and carriers continues to improve and expand, the next level of freight management is TMS.  TMS connects all of the moving parts to optimize cost, service and availability.  This process will continue to grow as the supply chain matures and more suppliers and customers adopt the program.  Even though TMS might create a localized increase in cost, the overall cost of the system goes down as efficiencies are realized globally.  These efficiencies then result in lower costs whether they come as reduced inventory levels, higher fill rates, or lower rates for transportation.

Products will always have to be moved from suppliers to customers.  Because of this fact freight management will continue to be a focal point for Encompass Group.  We will continue to explore new avenues of logistic partnerships, software and creative solutions for our supply chain.  The result of this attention will be an optimal balance of cost, service and availability.