Business Case Analysis
A business case is typically created for the following reasons:
- Provides justification for some level of investment in Transportation such as new technology, process improvement, or organizational changes
- Analyzes insourcing vs. outsourcing the Transportation function
A Transportation Business Case starts with defining the overall objectives of the Transportation function. There are a few key questions to ask:
How does Transportation/Logistics support the overall business?
- Is Transportation a cost center, profit center?
- What are the service level objectives?
- What unique requirements of products and services affect Transportation?
The methodology behind creating a business case:
- Understand the current state of the business – from order creation to freight payment
- Identify improvements in systems, process or organizational structure
- Determine the level of benefit
- Determine level of investment – time, resources, technology
- Determine the ROI
A Transportation business case focuses on the following process areas:
- Visibility and Exception Management
- Business Intelligence/Reporting
Typical areas of improvement focus on:
- How often are bid events conducted? What strategy is utilized?
- How are orders consolidated?
- How is mode/service level determined?
- How are routing guides and capacity commitments determined?
- How are exceptions handled in real-time fashion?
- How are rate discrepancies processed through the payment process?
- What metrics are tracked and measured – operational, financial, performance?