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When Can Simplified Logistics Add the Greatest Value to Your Business?

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Simplified Logistics has been helping companies find hidden value in their logistics operations for nearly 15 years. Our combination of consulting, technology, leverage, and relationships enables manufacturers and distributors to reduce freight costs and improve freight‐related process efficiency with minimal risk and no up‐front investment—thus, positively influencing business valuation, EBITDA and cash flow.

When is the right time for a company to engage Simplified Logistics?  There are a number of different scenarios in which Simplified Logistics’ approach could generate significant value.

When the company’s master operating plan calls for accelerated and sustainable cost reductions or service improvements

If a company knows where it wants to go but doesn’t know where it currently is, that’s a problem.  If it knows where it is and where it wants to go, but doesn’t have a way to get there, that’s also a problem.  For instance, the C-suite may say the company needs to reduce costs or improve service, but executives don't necessarily know which specific actions will achieve those desired outcomes.  From a transportation perspective, Simplified Logistics’ approach provides a road between the company’s current situation and where it needs to be to attain its goals.

When a company changes its go-to-market and transportation strategy

Changes in the markets a company serves and how it serves them can have a massive impact on transportation. Perhaps the new types of customers a company is pursuing will have different order frequency sizes. Maybe the company is looking at different geographies it hasn’t tackled before.  Or the company could be contemplating a stronger emphasis on e-commerce.  Transportation plays a major role in making sure such strategic shifts are successful.

Consider, for instance, if a company wants to open a new DC on the West Coast to better serve customers there.  Simplified Logistics’ tools can rerate the company’s existing shipping history to customers in those states as if shipments were originating from the proposed DC to quantify the change in service and costs.  This, in turn, helps the company decide how to price its product and devise a pricing policy on transportation expenses (i.e., whether it wants to subsidize by equalizing freight across the country or wants each region to pay its own way). Many other changes could be similarly simulated and analyzed.

When a company is expecting or experiencing rapid growth (organically or through acquisition)

Oftentimes, when experiencing rapid growth, companies take their eyes off the cost ball.  Eventually, costs get out of control.  Simplified Logistics’ tools can help fast-growing companies put the right transportation strategy and capabilities in place to support it in a way that keeps service levels high and costs as low as possible.  In fact, Simplified Logistics has become the administrative backbone for many fast-growing companies, which has enabled them to avoid adding fixed costs to their freight operations.

When a company seeks accelerated margin expansion or protection against margin deterioration.

If a company’s margins begin eroding or tightening and it’s becoming more difficult to generate additional business, it’s time to start focusing on cost reduction and customer profitability opportunities. Simplified Logistics can play an important role.

Here’s an example:  An analysis Simplified Logistics conducted for a customer showed Simplified Logistics could save the company $200,000 in transportation expenses. The company’s CEO indicated that was the equivalent of $5 million in additional business growth. So in other words, it would take an additional $5 million in new business—something that would have been difficult for the company to achieve at the time—to generate that same $200,000 in margin improvement that could be generated by reducing transportation costs.

In short, Simplified Logistics can put people in a position to understand where freight can contribute to or hurt their margin, and help them implement processes to alleviate imbalances in freight cost to positively influence margin.

When a company needs to improve its performance while using existing internal talent.

In many companies, logistics departments are resource-constrained.  They often lack enough people as well as the tools and processes to operate logistics more effectively.  A company’s current talent can use Simplified Logistics’ tools to help take their organization to the next level—with virtually no upfront investment needed.  Simplified Logistics works with existing employees—becomes an extension of them—rather than replaces them or augments them with other external professionals.

When a company lacks meaningful and relevant logistics metrics that demonstrate the function’s impact on the bottom line.

As a major cost center as well as a key to customer service, logistics can have a massive impact on an organization’s operational and financial health.  That’s why measuring logistics activities is so critical.  The right logistics metrics help identify and quantify logistics’ value—the impact it has on an enterprise’s profitability and competitiveness.  The most effective metrics also can uncover what it really costs to serve customers and pinpoint ways to reduce the cost and minimize the complexity of customer relationships. A third party like Simplified Logistics can bring such metrics to the table and use them to “keep score.”  This, in turn, enables a company’s senior management to objectively evaluate the performance of its logistics organization and, where necessary, enact specific changes to improve performance and keep them on track to achieve their goals.

When a company needs to use logistics as a differentiator in a tightening competitive landscape.

For years, it’s been well documented how business-to-consumer companies use logistics as a competitive differentiator.  Walmart and Amazon are among the first that come to mind.  But logistics can play the same important role in a business-to-business setting.  Business customers not only want to be confident their orders will arrive when and how promised, but also want to understand their true costs of doing business with a particular vendor.

The real-time visibility into transportation that Simplified Logistics’ solution provides is critical to meeting these customer demands.  It enables a shipper to know where all its orders are at any point in time, and quickly and proactively respond to address any issues before they become big problems.  It allows customers to do their own tracking of their shipments, which increases their comfort level and reduces calls to customer service. 

When a company needs insights on the impact that logistics issues, legislation, trends, and events will have on their business’s future growth potential.

The world is inarguably becoming much more complex.  Shippers have the daunting task of sifting through literally thousands of carriers, hundreds of thousands of pages of legislation, volatile fuel prices, and myriad other trends that affect transportation and distribution. Few, if any, logistics departments in midsize companies will have access to everything they need to know on their own. 

Having a close relationship with Simplified Logistics gives shippers access to knowledgeable industry experts who are immersed in the market.  It’s their job to keep tabs on the state of the market and identify emerging developments that might affect shippers’ business.  Such intelligence can be a valuable input into company leaders’ short- and long-term decision making. 

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These are not the only business scenarios that are right for Simplified Logistics.  But they are the most common ones in which Simplified Logistics has helped shippers generate significant improvements in the company’s financial and operational performance.

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