Are you cutting costs or investing? Understanding the ROI.
Do companies call us for a dock scheduling system strictly because they want to cut costs? Rarely. In a recent inquiry, the person wrote: ‘’I am the logistics manager. I am in need of a dock scheduling software that will provide me a peace of mind, and will eliminate archaic complications.’’ No mention about cutting costs here; not that price wasn’t important. We can easily say that almost all inquiries we get are to resolve process issues, from plain inefficiencies to execution errors that are deemed critical.
In a previous blog post ‘’The Lean Supply Chain meets Dock Scheduling’’, we explained that implementing software solutions is an opportunity to optimize processes and not simply replicate the existing ‘’way of doing things’’. This is what businesses are asking us to provide - a more efficient process. Therefore, calculating the ROI properly requires businesses to have a different perspective on what they’re trying to achieve.
ROI = (Gain from investment - Cost of Investment)
Cost of Investment
Cost Savings
What potential gains will you obtain from a dock scheduling software? Here are our top 5:
- There are the obvious direct labor savings related to the scheduling tasks (eliminating the phone calls and emails) - about 80-95 percent savings.
- All the fees due to a poorly planned schedule that incur overtime labor and driver detention fees should be eliminated. Conversely, a well planned schedule will assist you in labor planning.
- Tracking KPIs such as driver turnaround times, on-time and late arrivals, etc. Reports could also include shipment errors and volume variances in real-time.
- Through data integration with your existing information systems, you can expect to eliminate duplicate data entry, ensure data integrity and speed up entire processes.
- Augment product safety with greater visibility of your supply chain, secure site access and respect regulatory requirements (C-TPAT, OPA, PPP).
Platform
The cost of the software will vary greatly whether you are buying a licensed software or a SaaS platform.
SaaS dock scheduling system:
- Annual recurring fees including maintenance, upgrades and support
- Set-up fees if applicable
Licensed software
- Recurring user/site license fees
- Recurring support and maintenance fees
- Set-up fees if applicable
- In-house infrastructure and maintenance costs
Integration
Another direct cost to be considered relates to data integration (if applicable). Essentially, the man-hours the IT team is required to spend creating and testing the integration links between the dock scheduling system and your other information systems.
It is quickly apparent that calculating the ROI of a dock scheduling system is more that simply deducting the reduced labor hours (related to scheduling) from the annual price of the system. Companies need to determine the potential gains from achieving process improvements, plus the benefits of augmented visibility and accountability among associates and supply chain partners. The implementation of a dock scheduling system should be a transformative experience for your dock operations and, of course, provide you a positive ROI.
For a glimpse at how your operation's ROI might net out, we suggest you try our Dock Scheduling ROI calculator.