Have you ever had a transportation audit? Not unlike an IRS audit which is a hunt to find money and audit of your transportation network is also intended to find money. Unlike the IRS audit the money you find you get to keep!
But…unlike an IRS audit where you participate as little as possible. While a transportation audit requires all team players full participation. Most transportation touches every department in the manufacturing, agriculture, scrap and recycling, lumber, timber and poles, waste, minerals and mining, intermodal, wind energy, coal, grain, automobiles, and a whole host of like type industries. Take a look at your industry and see how many touch points transportation impacts. Manufacturing or industries where you take in one or many raw products and make something out of them are especially prone to transportations impact. Take for example scrap metal being gathered by truck, rail or barge and being sent by one of these modes of transportation to a rolled or coiled steel manufacturer converting scrap metal into automobile parts or refrigerators and the subsequent movement again by one of these modes of transportation to the final manufacturer. Gets complicated in a hurry, doesn’t it?
So why would anyone want to purposely implement an audit on what appears to be a large slice of the manufacturing or processing network? If you dig deep enough there’s always opportunities to make things better. The first step of a transportation audit is to identify problems, understand these problems and eventually make the pain of them go away.
Is there ever a good or better time to start your efforts towards a transportation audit? Now is the best time. Looking across the departments and people transportation touches can be overwhelming yet rewarding and that’s generally why there’s an opportunity to engage in a money saving process. When complex processes touch a significant number of departments and individuals there’s more handoffs which may cause deviation from the process intent. It’s finding these deviations that create the opportunity to garner monetary and process gains.
What does a transportation audit entail? Good question. The first basic step is to determine each touchpoint transportation has within your organization. This can include processes, people and items such as a loading or unloading crew members or supervisors, your IT person, computer systems you have in place, accounts payable team, fleet (rail, truck or barge) managers, shipping coordinators, traders or those people that buy and sell your product (someone has to buy the raw material and someone has to sell the finished product), your CEO, COO, and CFO since they’re probably most concerned about the money trail and the actual manufacturing worker that is responsible for turning the raw product into something saleable. You’ll quickly see this process runs deep and requires a good deal of organization and thought. Once you have identified the stakeholders the next steps are to find those pain points in each stakeholders’ domain. Selectively categorize these pain points as a cause of a particular process or of another up or downstream process. Remember we’re not out hunting someone to blame we’re trying to solve issues that pertain to running a smooth economical transportation system. Revealing problems so we can fix them is a good thing. Something I might add, here at Tealinc, we are quite good and experienced at doing. We take a fact-based approach that leaves nothing to the imagination, it is what it is! Then we take these facts and make suggestions on how to better align the processes with the process requirements to support the company’s manufacturing and transportation requirements. We call this alignment filling in the capacity gaps. Capacity gaps are the pain points you’re feeling. If you take an aspirin your headache is likely to go away. Tealinc Consulting is this aspirin.
So why should a company make the effort or spend the money to go forward with a Transportation Audit? There is a myriad of reasons to go forward with a Transportation Audit. These range from identification of pain points creating opportunities to save money and or increase throughput with the same tools and equipment (higher utilization rate lower cost per item produced), being more competitive in the industry you participate in (why does the competitor always seem to get more railcars than I do?), mitigate lost sales (the market is up and our tonnage isn’t following the trend?) and run a more efficient operation (more effective utilization of resources).
Actively participating in a Transportation Audit is a commitment. You have to commit to being fully engaged in the process. It’s a deep dive into the soul of the company, that’s somewhat complex. People and processes get an elaborate review therefore its’ more effective to have a third-party lead the audit. It’s not for the faint of heart you will discover pain points. Substantial savings opportunity, leapfrogging over your competition, not deteriorating the daily or weekly execution of shipment plans and protecting your place in the transportation market and products market are key results.