Data and Policy Compliance In Freight
Many companies have little visibility into their Transportation Spend Management data, or perhaps assume the questionable or little data they have is as good as it gets. Only 22% of companies report fully utilizing their transportation management technologies in their supply chain activities (23% reported not using them at all). This is a staggering statistic, considering what a treasure trove data visibility is—the more you can see, the more you can control and improve.
With the radical changes that we’ve seen in the industry recently, the need for consistent, reliable data in your supply chain management has never been more important. Data and policy compliance is the key to unlocking that treasure.
What is Data and Policy Compliance?
Receiving disparate data is the nature of the supply chain industry, whether it’s due to the carrier’s output, the country of practice, the mode of transportation, or otherwise. In order to derive useful, quality analytics from this data, you need to set up data compliance rules. Data compliance is the practice of ensuring carrier data meets the requirements to be able to audit, conduct accounting and financial processes, and produce reliable analytics and reporting.
Data compliance enables you to obtain pure, high-quality data that meets your needs. You don’t need to force data to fit your metrics. But this means that you need to know which data you need, why you need it, and what you’ll use it for. Only then can you set up your data compliance measures accordingly. However, the path to optimal data management doesn’t stop there, as you have to ensure policy compliance.
Policy compliance is when a policy undergoes auditing to assess that it meets internal standards or regulatory requirements, or both. Constantly monitoring and evaluating data and policy compliance is vital to ensure data purity and relevance, as unchallenged data degrades over time. This leads to basing your decisions on inaccuracies, which hurts your efficiencies, ROI, analytics, and potentially even the value delivered to customers.
At Trax, we believe in knowing which data is good and which is subpar in your data pool, as well as understanding why the subpar data doesn’t comply with your standards. Then you can remedy the root cause, and build a pool of pure, quality data. Achieving data and policy compliance involves constant monitoring and evaluation and continuous process improvement.
Achieving Data & Policy Compliance in Freight
Mastering data and policy compliance is no small feat. But you’ll be rewarded for your efforts, as it affects your entire supply chain management—reduces cost, increases overall efficiency, and delivers a competitive edge, just to name a few of the benefits.
The journey of improvement and optimization reaches the pinnacle of performance, efficiency, cost-effectiveness, visibility, and market domination. And so was born the Trax Transportation Spend Management Maturity Model.
Trax Transportation Spend Management Maturity Model
The Trax Transportation Spend Management (TSM) Maturity Model is a framework that provides a roadmap for large, global enterprises to shift from a lack of visibility and control to a fully optimized and accurate data-based transportation supply chain—for all modes and geographies.
- Proactive—Companies respond to issues as they arrive, and eventually can plan and anticipate matters that lay ahead.
- Optimizing—Accurate and high-quality data is obtained and assiduously analyzed. This offers companies better visibility and the ability to make informed decisions based on data rather than assumptions.
- Leading—A company at this stage is fully capable of not just weathering challenges, but using them to their advantage. These companies have aptitude, capabilities, visibility, control, and optimized operations. They become pioneers of the market, leading change and innovation while extensively growing their market share and simultaneously cutting costs.
Data and policy compliance plays a critical role in the maturity model. A strong foundation of collecting and analyzing data is a launching pad for companies to rise to the summit of optimization. These companies have the aptitude, capabilities, visibility, and optimization to be leaders in the market. They know exactly what data they want, where to get it, and how to use it to drive market change and innovation. Companies accomplish this all the while simultaneously cutting costs, increasing market share, and bolstering their bottom line.
Here are some factors to consider in order to optimize your data management and data and policy compliance practices.
Use accurate, complete data
This one seems obvious. But it’s not uncommon for systems to contain data that hasn’t been previously used, verified, and validated. Data must be put to the test in order to be reliable. At Trax, we put your data to the test so you can be certain it’s reliable—we use, monitor, and identify gaps in data, and work with the source to rectify any issues identified.
Data found in systems, such as ERP and transportation spend management systems (TMS), is usually considered reliable in certain instances—product costs, order management, and shipping scheduling, etc. It’s data that those systems are designed to collect. However, it’s when these systems try to calculate the final, landed costs that estimates rather than actual, invoiced costs enter the picture. Due to the nature of these systems, there’s no way to ensure if the estimates are even sound, unless you're fully optimized through Transportation Spend Management and can easily obtain accurate pricing data.
Once you have accurate data—or all of your systems feeding accurate data into another downstream system that normalizes, standardizes, aggregates, and augments that data, like a Transportation Spend Management solution does—then you have the end-to-end visibility needed to reduce spend, regulate cash flow, and increase your profit. But, it requires a tenacious process for data collection, monitoring, management, communication, and resolution to reduce errors, if not eliminate them entirely.
Yet another important matter Trax tackles is actuals, accurately matching invoices and shipment records, identifying missing or bad data, and more to increase your accruals accuracy. It’s an additional data management component that we optimize, and a crucial one. For example, if your accrual takes into account even a few estimates where each actual varies by 10%, 30%, or even more, it can wreak havoc on your financials. And the reverse situation means you tie up funds that could be used to grow your company. Both situations are based on lack of visibility. Such an instance is exactly what optimizing your data and policy compliance process can solve.
Create data consistency
There’s no use in having good, complete data one month but not the next. Consistency is key for growth and prosperity. Constant monitoring, evaluation, and updating of data compliance is vital in maintaining an edge in an increasingly volatile market.
This stability and constant influx of reliable data is a foundation to plan and build upon for future expansion. When you can be confident in your data, you can make business intelligent decisions that set you apart from the competition and position you for successful growth. Here’s an example of what that growth and prosperity could look like for a leader in supply chain
During the hectic holiday season when snap decisions must be made, leading companies ll have the visibility and reliable data to make informed decisions, course correct in the blink of an eye, and leverage any opportunities unseen to those in the market who are less optimized and prepared.
Of course, the freight industry is filled with intricate policies, regulations, and practices that can impact data consistency. Offering global services means you must remain abreast of changes in order to keep your streamlined processes in tip-top shape.
That deep understanding is exactly what we excel in at Trax. We normalize services and charges to addresses to site names, and more. This normalization purifies your data—and helps you to adjust to changes in policies or regulations rather than throw your company into chaos—so you have an unimpeded view of what’s going on and what’s yet to come.
Centralize your data management
Data normally flows in from various systems and sometimes disparate systems, such as ERPs, transportation management systems, warehouse management systems (WMS), and others. This hectic influx is overwhelming, as sifting through and constantly monitoring the data can prove quite the challenge if not done correctly.
For example, a company uses ERP and a transportation management system. The company also uses tech and other processes to manage events while shipments are in transit to stay updated on any real-time issues, such as weather delays. This wide range of data sources can be tedious to manage manually. Trax’s system gives you an elegantly simple and systematic way to integrate major systems.
Trax collects invoices and shipping documents to merge and evaluate data for field-level data compliance. This increases visibility and total control over the process, giving you confidence that you can accurately audit and process payments.
Know your regional (or global) compliance regulations
Legal compliance is a complex, but important matter. Noncompliance leads to losses in time and money, at a minimum. Knowing what you need for compliance is intricate and complicated, with regulations often changing. Add in the fact that compliance regulations vary vastly from one geographical location to another, and it becomes a major undertaking.
For example, the EU has mandated field-level requirements, such as checking for missing or inaccurate fields in documentation, to determine if an invoice is compliant. Latin America requires registering a shipment before it goes out the door. The more complex the supply chain is and the more variables there are, the bigger the risk of errors. This disparate landscape can be navigated through outsourcing to an expert in global transportation services that can centralize information and help you keep abreast of compliance regulation changes. Leveraging such expertise can be a deciding factor between your company’s failure or success.
Trax investigates what’s mandated and what shippers actually need, as well as global events to ensure that you’re neither jumping through unnecessary hoops nor falling short of meeting regulations. This is a small part of how we handle policy compliance to mitigate risk and increase efficiency.
Data drives design
Trying to force your data to meet your metrics is like forcing a peg into a square. It convolutes information, causes frustration, and doesn’t deliver good metrics. We’ve run into instances where a company doesn’t know it has poor data, thinks its mediocre data is as good as it gets, or wants to meet certain internal metrics and has to force data to meet those parameters.
At Trax, we scrutinize the data that comes in and help you establish a plan for improving the data. Only then can you determine what business use cases the data supports. If you need a metric that the data doesn’t support, we help you get that data so you have what you need to make well-informed and business-savvy decisions. The cycle of evaluation and continuous improvement ensures that data drives design.
Create data visibility
One of the biggest challenges with data compliance is visibility. But if there’s been little or no visibility before, it raises the question of how to build it.
When maturing through the Trax Transportation Spend Management Maturity Model, visibility skyrockets. At the data compliance stage, Trax aggregates end-of-period reporting information from various sources to create that visibility. We’ve mastered the techniques needed to build visibility from the ground up or out of chaos.
Improve processes constantly
Sustainability is key to success. You have to be able to adapt to changing circumstances and constant updates. For example, in Q2 2020 during the COVID-19 pandemic, some retailers saw a 97% or higher increase of online sales that took a heavy toll on the freight industry.
Your processes must have the flexibility and dynamics to instantly respond to changing needs of the marketplace, or even your own company. Such adaptability ensures that your company’s growth doesn’t come to a halt. Optimizing policy compliance allows you to automate processes while maintaining that flexibility to remain competitive and profitable.
The Keys to Success
Data and policy compliance, although often underappreciated, is an important stepping stone in Transportation Spend Management. In order to gain perfect data that feeds back into systems, reduce your spend, and more, you must have a rigorous process around data collection, monitoring, management, and communication, as well as the resolve to correct bad data. Without quality data, you can’t make educated assumptions or rely on it in important conversations with carriers, delivery executives, and other key players in your supply chain.
Data and policy compliance can seem intense and complicated at first, but working through it with a global expert makes it simple, straightforward, and elegant. An expert partner like Trax can see what you don’t see to help you take your Transportation Spend Management to the next level.
To know more about how Trax can help optimize your processes, increase visibility, grant you more control over your supply chain, and boost your bottom line, contact us today.