1. Managing Inbound Freight Costs Loette D. King, CPSM, CPSD

2. Topics Why Consider Inbound Freight? Preparation The Outsource or In-House Decision Choosing a Partner Case Study – Emory University

3. Why Consider Inbound Freight? Too often, Inbound Freight Costs are not controlled Some suppliers utilize freight as a revenue center Some suppliers pass along the actual cost – but is the cost high or low? One of the most overlooked areas for significant cost reductions Any savings in inbound freight costs provides additional funds for research or operations

4. Preparation Review existing charges Evaluate your potential opportunity Determine which suppliers are best suited for the program Federal Grant Concerns Departmental Concerns Accounting Systems

5. The Outsource or In-House Decision Inbound Freight Management can require intensive administration, including – supplier setup and follow-up – ensuring correct billing – customer communication In-House freight management eliminates Provider fees, but requires significant internal resources Outsourcing removes the operational burden of program management

6. Choosing a Partner Determine your Expectations – System integrations (e-Procurement and ERP) – Assistance with communication – Interaction with the suppliers during enablement – Follow through with unmatched charges – Available reporting – Due diligence – Your level of control during implementation Check with your Preferred Carriers

7. Case Study – Emory University Implementing a freight management program needed to be simple and require a small investment of our time. We also had the following special requirements in order for us to commit to a specific Provider: – Process must work with our e-Procurement and financial platforms – Billing must be linked back to the accounting provided on the PO – Data must be provided in a manner which allows our customers to easily track their shipping costs – Reporting which allows for monitoring of the program as well as internal analysis Finding A Program To Meet Our Needs

8. Rollout began in Fall 2012. The first phase included 12 suppliers and lasted 4 months. Our Provider contacted the suppliers with the pre- approved communication tools Customer communication Monitoring of savings Case Study – Emory University Implementation Process

9. Our provider supplied recommended drafts of supplier and customer communication, which were tailored to meet our needs. Customer communication was further customized to include information on how customers could view their shipping charges for each PO. Communication was posted on our website and presented to various campus groups. Case Study – Emory University Communication

10. Following the initial success of the first phase of implementation, we expanded to include to suppliers with preexisting agreements with our provider. One year into the program, Emory had enabled 230 suppliers, capturing over $260k in savings. On March 7th, we began enabling our entire supplier base into the program. Case Study – Emory University Cautiously Widening Our Scope

11. Case Study – Emory University The Trends

12. Case Study – Emory University The Numbers

13. In March 2014, we began enabling our entire supplier base into the program. We needed to make some changes in our processes – Send a list of all of our suppliers to our provider – Send data related to every PO and invoice to our provider – Update shipping instructions associated with all of our POs Case Study – Emory University Moving Forward Into Full Implementation

14. If non-negotiated freight charges apply, ship via FedEx and bill third party to FedEx Account # XXXXXXX and insert PO# in Recipient 2nd Address field. For free freight and LTL shipments, please use your preferred carrier. Case Study – Emory University PO Shipping Instructions

15. Case Study – Emory University The Results Significant savings for the university – Emory has maintained a conservative estimate of $22 savings per PO. – The most conservative overall savings exceeds $260k for a very small portion of our supplier base. No negative feedback from customers Strong Strategic Partnership with our Provider and our Shipper Considering expanding to LTL shipments

16. Questions? Loette D. King 404-727-0909 loette.king@emory.edu