Leverage: Adding Value by Reducing Costs Part 1 (6 Part Series)
In Job Logistics, Logistics, distribution jobs
Many private fleets have expanded over the years from one or two trucks to a formidable collection of tractors and trailers. But an increase in the size of the fleet does not mean that the operation is a successful one.The ultimate goal of any well-run fleet is to add value to the company. Fleets do this by providing the required level of service at the lowest possible operating cost. But the fleet’s cost structure has to be validated before the fleet manager can identify that “lowest possible cost.” Once validated, the fleet manager can implement cost reduction opportunities where possible.The first task in any transportation cost reduction undertaking is getting an accurate accounting of a shipper’s current fleet costs. This challenge is more difficult when executives count on information produced by internal traffic departments that may fail to provide accurate fleet cost data. Costs may be omitted, incorrectly allocated, based on outdated information and not reconciled with source documentation like invoices and labor contracts.Executives should resist accepting information at “face value,” challenge data and know where it comes from. Driver pay should be matched with work performed. Mathematical relationships of expense components is useful in assessing cost structures.Continue to Part 2
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admin @ February 19, 2009
[…] Click here for part 1 of this 6 part series. […]
[…] Click here for part 1 of this 6 part series. […]
[…] Click here for part 1 of this 6 part series. […]
[…] Click here for part 1 of this 6 part series. […]