- Full cost control
- Stock visibility
- Invoice control management
The significant reduction in transport costs generated by the use of a TMS is not only beneficial to supply chain departments, but also to finance departments, thanks to the increased collaboration this use provides. Jérôme Bour, CEO of DDS Logistics, has identified three major levers to highlight this largely unexploited source of savings.
Full cost control
Generally speaking, finance departments have very little visibility over the transport component of the cost to serve or the full cost of a product. However, they could acquire the real and detailed view of transport costs in their cost accounting. First of all, a TMS can provide delivery costs for each customer. It is a valuable tool to ensure that negotiated delivery terms do not absorb the margin. In addition, a TMS can provide an analytical view of the transport cost per product delivered or purchased, to calculate the full cost of the product. This is particularly the case for international purchasing, for which transport is a significant part of the total cost. A TMS therefore provides the means to compare the pricing proposals of suppliers from different countries on a full cost basis and to set its sales prices as accurately as possible. Finance and supply chain departments can work hand in hand on a detailed cost vision, without ever losing sight of margin analysis.
Supply chains are becoming longer and more complex. Factors such as the internationalization of trade, multiplication of product references and players, and rapid product obsolescence have made it difficult to visualize stocks from end to end, in particular floating (or rolling!) stock. A TMS can provide this visibility through a tracking system that details the product quantities at each stage of transport. Once the stock has been correctly inventoried, the TMS also makes it possible to improve procurement and delivery lead time reliability. And so, at the factory or store, the lead time confidence acquired makes it possible to reduce safety inventory. And while the supply chain department works to optimize transport, the finance department can measure the impact it has had on reducing working capital requirements.
Invoice control management
A third improvement lever for finance departments is the automation of transport invoice control. Finance departments have a hard time controlling these invoices in detail, as they include many adjustments (diesel, BAF, CAF, penalties for late payment, etc.). With a TMS, invoice control is simply automated and made more reliable, with pre-invoicing controlled directly by carriers. It is now possible to take this management further: digitized invoices, automated control of service details and direct entries into the accounting system. And the benefits are there: lowered costs and increased productivity!
A TMS also makes it possible to carry out simulations, making budgetary work easier and more reliable. Finance departments are thus more efficient in setting up a reliable budget and checking transport invoices.