At the recent Purchasing Management Association of Canada (PMAC) Conference in Quebec City, Kurt Ritcey, a Partner with Deloitte in Toronto, delivered an excellent presentation on how to gain executive support for a procurement exercise. Since his message is so relevant to shippers, I will attempt to adapt some of the key themes of his presentation to Transportation Managers who are contemplating launching a Freight RFP.

1. Enhance Executive Support

Many freight RFP’s ultimately result in changes - - new carriers with new dispatchers, new drivers and new customer service personnel. These changes can disrupt the status quo and have impacts throughout the organization. Since for hire truck drivers can be viewed as an extension of a manufacturer’s service, a change can unsettle existing patterns of interaction with customers. They can upset existing relationships with vendors. In other words, they can have far reaching effects in other functional areas of the company.

To maximize the success of your freight procurement undertaking, it pays to collaborate with your colleagues in other departments and obtain their buy-in and support. This can include identifying weaknesses among your current carrier base (e.g. service failures in certain locations, high freight costs that are adversely affecting margins and/or uncooperative customer service personnel who are difficult to deal with). By addressing the concerns of your fellow stakeholders and obtaining their buy-in, particularly at the executive level, you enhance the chances of gaining their acceptance when it comes time to implement the results of your bid process.

2. Stand on the Shoulders of Giants

In his presentation, Kurt emphasized the importance of being “organization savvy.” This includes being aware of the key decision-makers in your organization and the KPI’s that drive their decisions, aligning your work and your objectives with these key players, forming a working group with people who have a vested interest in the outcome and building a reliable delivery team to ensure that you are able to effectively achieve the desired outcomes when it comes time to implement your new routing guide.

3. Be an Evangelist

Since many freight procurement exercises result in change or the expectation of change, it is important to obtain and maintain executive support. This can include an employee video or even a letter from the President outlining his support for the undertaking. It is important to maintain this support since some employees may question the company’s commitment to change if there are no visible signs after the initial letter.

Kurt also recommended finding leaders in other sectors of the business who support the initiative and who are prepared to communicate this support in their respective functional areas. This clearly ties in with the notion of being organization “savvy.”

4. Escape Death Valley

I have personally seen companies execute freight RFP’s and then sit on the results, even though significant cost savings were available. To escape “death valley,” Kurt recommends developing the business case to demonstrate to the organization the financial and non-financial benefits of implementing the results of the freight procurement exercise. He also suggested a “Decouple and Accelerate” strategy. By this he means decoupling certain elements and executing them on their own to accelerate the implementation of the project. Kurt also proposed spending time on risk management by identifying those elements that can go wrong.

For freight RFP’s, this often means conducting meetings with the operations personnel in your new trucking firms to make sure the trailer drop, pick-up and delivery requirements are understood at the outset. Internally it means ensuring that company dispatchers are aware of the new routing guide and of the order in which carriers are to be selected. It may also mean communicating to management any load refusals or broken commitments that could result in less than optimum results and undermine the support from other departments.

Conducting a freight RFP exercise can take time, money and energy, both on the part of the company executing the bid process and on the part of the transport companies responding to the bid. Following Kurt’s suggestions can help you obtain the support of your executive and management team in both the execution of the RFP process and the subsequent implementation of the results.