Transportation costs represent a huge chunk of total supply chain costs. In fact, 60% of every supply chain dollar is spent on transportation. And expenses can increase even in a sluggish economy because of market and regulatory pressures. As a supply chain professional you’re probably all too familiar with this type of situation. But how do you successfully explain it to your boss?
Communicating strategically about supply chain issues with higher-ups—whether a direct supervisor, CFO, CTO, or the head of the firm—is critical both for your own effectiveness and organizational alignment. Chris Norek recently addressed this challenge and others in an expert webinar, Developing Strategic Supply Chain Leaders. Norek is Senior Instructor of Supply Chain Management at Penn State’s Smeal College of Business (ranked #1 by Gartner in Supply Chain Education).
Norek offered key tips for preparing and conducting a high-level discussion about transportation costs:
- Look at things from the boss’s point of view: What profit and cost issues are big concerns for your company? What’s the company’s transportation spend as a percentage of revenue or cost?
- Arm yourself with hard data: Know about modal spend and performance; carrier spend and performance; fuel, capacity, and regulation. Pay attention to fluctuations and be able to justify them.
- Tips to remember: Begin your discussion by recapping facts from your last conversation. But don’t over-explain: give the executive a chance to ask questions.
In the webinar, Norek also talked with Dave Kurz, EdD at CorpU about the biggest challenges in supply chain leadership today: the huge gap in supply chain talent, and the increasingly urgent need for an efficient end-to-end supply chain.