FAP Unlocks Visibility Into Data
Managing transportation spend is like playing a high-stakes game of chess. Some pieces have to be moved about the board, some that go away, others that come back, all leading to an end goal.
Supply chain data serves as the pieces on the board, yet many companies are playing blindfolded. While they can feel the pieces on the board, they may or may not know their specific location or the optimal move to make.
Freight audit and payment (FAP) systems are designed to lift the blindfold, making collecting, interpreting, and turning data into actionable insights easier. The result – better visibility and reduced transportation costs.
At Trax, we empower organizations with globally complex supply chains to gain control and end-to-end visibility into their transportation costs for enterprise-wide efficiency, maturity, and value.
The Role of Data in Supply Chain Management
It should come as no surprise that data is one of the most valuable commodities available to organizations operating within the supply chain. Data can help provide a competitive advantage, reduce transportation costs, improve operational efficiency, and more. Despite these advantages, many organizations struggle with managing the tsunami of data that has been introduced into the process over the past decade.
When looking at the various advantages of improved data management, they all boil down to a single factor – better decision-making. For decades, the process of knowing where and with whom to do business relied upon gut instincts, unreliable forecasting models, and manually compiled data that was months behind the curve.
Much of the challenge created by these antiquated processes is a direct result of the siloed nature of the supply chain. Aggregating data coming in from multiple sources at different times makes it nearly impossible to gain any advantage through data when leveraging a manual process.
With modern FAP tools, organizations remove the guesswork and can make critical business decisions based on hard data in real-time. Data fragmentation is replaced by an efficient process that collects and interprets millions of points of data from multiple sources, allowing companies to transition to a proactive approach – saving time and money.
Understanding Freight Audit and Payment Services
Let's revisit the chess analogy mentioned above to better understand freight audit and payment services.
Imagine for a moment you are playing chess blindfolded, and you have several people making suggestions on your next move. You might be able to visualize some of the board, but you are mostly reliant upon outside information to make the best decision for your organization.
Each person providing advice is essentially the data within the supply chain, and it is up to you to determine if it is accurate and make a decision because you are on the clock. An FAP system removes all of the noise, providing you with an objective approach based on reliable information.
By analyzing millions of data points, it can accurately determine if you should open with a Sicilian Defense instead of a Queen’s Gambit, allowing you to improve efficiency while reducing costs.
Key functions and benefits of FAP services
Collecting and interpreting data is the 50,000 foot view of what an FAP service does for transportation spend management. Four areas are directly impacted when an FAP system is implemented.
1. Invoice validation and accuracy
How do you know what you are being charged is accurate? It is a simple question that many organizations have trouble answering. With a manual process, extensive manpower is required to check each invoice. Most of the time, this happens well after the invoice has been paid.
With a FAP system in place, validations happen in real-time, as AI-powered technology constantly scans for inconsistencies or errors.
2. Rate and contract compliance
Managing rates and contracts is an essential component of transportation spend management and one that becomes increasingly complex as you move into new sectors or different verticals. Companies that still rely on manual monitoring or rates are immediately behind the eight-ball because of the volatility of rate fluctuations.
FAP systems allow you to set parameters and have triggered responses when rates fluctuate, giving you real-time accuracy and better decision-making.
3. Duplicate payment prevention
Duplicate payments have plagued the supply chain industry for decades. As the global market has expanded, the challenges have only grown. FAP systems can quickly and accurately highlight duplicate invoices, preventing additional payments from going out.
4. Carrier performance analysis
Knowing which careers are meeting or exceeding expectations shouldn’t be a guessing game. You should be able to quickly identify carriers providing substandard performance and act accordingly. FAP services only deal in hard data, allowing you to make difficult decisions much more quickly and easily.
How Freight Audit and Payment Services Enhance Data Visibility
Now that we have gone through some of the biggest benefits associated with FAP systems, the inevitable question is – how does it help improve these areas?
Centralized Data Repository
Leveraging FAP services means moving to a centralized data system. Every piece of data that is collected is housed and managed from a single platform. Offices around the globe that once housed their own information are now connected and can freely share information in real time.
By consolidating invoices, contracts, shipping data, and more, a single source of truth for supply chain data is created. In doing so, information gaps are eliminated, and data-driven insights are instantly available to any team member around the globe.
Data Standardization and Enrichment
Data consistency is a major hurdle for many organizations working across the global supply chain – especially if your organization has grown by acquisition. Different offices manage and handle data differently when a manual process is utilized. FAP systems create a clean, standard way to process and manage data and add missing information, all for more comprehensive insights.
Real-time Tracking and Monitoring
One of the biggest benefits of implementing a FAP system is connecting other business information systems for enhanced visibility. By connecting pieces like a TMS, shipment tracking is greatly improved and even be extended to managing inventory being housed in warehouses.
Improved tracking has the added benefit of real-time updates on shipment status and location. This can be particularly powerful during peak seasons, as it makes it easier to adjust on the fly and maintain high levels of customer satisfaction.
Reporting and Analytics
Aggregated data results in more comprehensive reporting and analytics. Advanced reporting and dashboards provide access to rich data making it easier to analyze trends and improve strategic decision making.
Improve Supply Chain Visibility With Trax’s FAP System
Few things within supply chain management have the potential to reshape, optimize, and improve transportation spend like comprehensive data. As more data is introduced to the supply chain, adaptive systems and processes will only become more essential.
Trax’s freight audit and payment system is an AI-based platform that leverages edge computing to help global organizations improve efficiency and reduce costs. Our technology simplifies complex business processes, allowing you to grow your business and improve your bottom line.
To learn more about our FAP solution, visit our website and connect with our team for a consultation.