Supply Chain Software: Looking for money to fund a new WMS?
July 11, 2011 - MMH Editorial
“Go to where the money is, and go there often.”
That phrase is attributed to Willie Sutton, the famous bank robber. But it could have been said by Brett Febus, president of Insource, a spend management software firm. Not that Febus is a bank robber, mind you.
Spend management is not an application or service we would normally talk about. But Febus has coined a term for what Insource does for clients: “Print the money, spend the money.”
“Ultimately, we are helping our customers make improvements to their supply chain operations,” he says. “That let’s them print the money they can spend on projects inside the four walls.”
How do they print money? Insource uses a proprietary software tool to evaluate and benchmark its customers’ shipping contracts, especially related to parcel and LTL shipments. Those are outside the four walls activities. It then advises those companies on strategies for getting better deals that can save money on their transportation spend.
“We simply validate the market competitiveness of their agreements or tell them where there are holes. If there’s a 60% discount we look for a 65% discount,” Febus says. “Over the past ten years, we’ve helped our customers save $1 billion on their freight spend.” That money, in turn, is being used to fund other projects. For example, Insource worked with an apparel company in Ohio that was able to save about $1 million by renegotiating parcel shipping contracts. That found money is being used to fund IT projects in the customer’s distribution center, including a new warehouse management system. WMS does matter to Modern’s readers.
While shippers typically do not permit outside firms such as Insource to participate directly in the negotiations, it trains its customers’ negotiating teams, sets strategy and is available to consult by telephone during negotiating sessions. “About 90% of what we do today is behind the scenes,” Febus says. “It’s not unusual for us to be on the phone with our clients before the meeting and to take calls during the breaks in the negotiations.”
“Print the money. Spend the money.” I like the phrase and I think Willie Sutton would have smiled as well.
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