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37 ments of different shippers, and has therefore acquired the evaluates many variables when considering an investment tools by which to track the on-time performance of various into its supply chain process, there are three benefits that supply chain segments. Understanding current performance stand out as being most important: (1) cost; (2) delivery is one of the most important parts of any evaluation process, times; and (3) commitment (of the transportation or logis- since it allows BCO to pinpoint where the inefficiencies are tics provider or other partner). Table 3.5 summarizes some in its system. of the categories of benefits that are most important to BCO, Timeline planning--Once an issue has been identified, as well as the specific benefits that are tracked, and the tools BCO determines an appropriate timeline on which to study used to do so. or address the issue. For example, a decision to build, site, In short, the BCO currently uses a single, sophisticated tool or operate a distribution center is a very large undertaking, for much of its freight investment tracking and decision- and will be planned on a correspondingly long (strategic) making needs. In addition to the quantitative measures eval- timeframe. However, other decisions--such as the contracts uated in the freight investment decision-making process, BCO to provide air cargo or marine services--are evaluated every considers some qualitative performance measures, includ- year and are changed to reflect the best combination of costs ing speed and efficiency of customer service, the strength of and service. customer relationships, and careful and safe management Ensure that good partnerships are in place--BCO recog- of freight. nizes the importance of strong, enduring relationships with a broad range of stakeholder types. In addition to 3.3 Key Issues and Challenges maintaining longstanding relationships with manufactur- of Existing Decision-Making ers and retailers, BCO plays a visible role in the transporta- Processes tion and shipping industries. They are active in multiple professional organizations, including the Retail Industry Different freight stakeholders value different types of Leaders Association, the Waterfront Coalition, and the benefits, which necessarily leads to different evaluation Coalition for Responsible Transportation. processes. Ensure that decisions made are as efficient as possible-- Different stakeholders clearly use different tools and BCO recognizes the importance of efficient transportation methods to answer the question "is this a good investment?" system performance. The company estimates that 25% of its Although some benefits are considered by all freight stake- efforts to maximize supply chain performance are focused holder groups, each stakeholder group is primarily interested on transportation system improvements. In addition, BCO in just a few benefits or impacts. On the private-sector side, strives to make decisions that are as environmentally effi- freight investment stakeholders are focused primarily on cient as possible. Whether it is in the selection of partners or financial benefits, NPV, and ROI. Although these stakeholders in the transportation mode selected, BCO evaluates invest- consider a wider range of variables when determining their par- ments with an eye to waste reduction, efficient use of energy, ticipation in a freight investment project, the ultimate decision and lessening of emissions of harmful pollutants. is generally driven by the project's underlying impact on oper- ating costs and system capacity. On the public-sector side, the Benefits Assessment. BCO is involved in shipping time- list of benefits typically includes economic development, tax sensitive cargo to many different locations. Although BCO revenue, and social/environmental benefits (or disbenefits). Table 3.5. Primary benefits considered by BCO. Category Specific Benefits Tracked Tool Used Cost Late shipments SAP Production/ Supply Chain Software Inventory Cash to delivery cycle Delivery Times Port-to-port time performance SAP Production/ Supply Chain Software Congestion or bottlenecks and their effects on delivery times Commitment Viability of partner companies SAP Production/ Supply Chain Software Environmental sustainability of partner companies Qualitative Comparisons