Collaborative Transportation Management

7.1 Possible CTM Benefits

Table of Contents

Surprisingly, very little capital investment is required for Collaborative Transportation Management. While a sufficient level of information system capability is required to capture and process needed information, physical assets are generally not required to bring about the results of CTM. Rather, the primary forms of investment involve people and time. In summary, the returns of CTM far outweigh the investments required.

Comments

• CTM enables improved service levels and on-shelf availability across the board
• Suppliers and carriers with CTM capabilities become "go-to" parties for major retailer events
• Opportunities exist to minimize/eliminate costs associated with miscommunications across the extended supply chain, e.g.:
  • Expediting/last-minute shipping
  • Poor truck utilization
  • Freight bill and shipment administration
  • Poor management of cost of inbound goods
• Collaboration facilitates better use of transportation and warehousing assets for all participants, e.g.:
  • Continuous moves
  • Shared warehousing
  • Fewer fixed assets
• The ability for participants to take a system-wide view of supply and demand minimizes unnecessary inventory
• Better communication between partners creates the opportunity to reduce days' sales oustanding

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