Korber Vera Bradley Case Study

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Körber Supply Chain Copyright © 2022 Körber AG or its affiliates. All rights reserved. Körber Supply Chain Copyright © 2022 Körber AG or its affiliates. All rights reserved. Takeaway The linchpin to the success of this project was Vera Bradley's ability and willingness to undertake a carrier change. In this instance, Carrier Two was able to offer superior value. In other scenarios, Carrier One, a mix of national carriers, or the addition of regional/niche carriers may represent the optimal solution. The key is building carrier independence and maintaining a flexible network. Building relationships with vendors, particularly parcel carriers, is always a worthwhile goal. However, care must be taken so that those relationships do not become chains that bind a shipper too closely to its current carrier. Carriers will attempt to forge these chains in two ways. The simplest method carriers use to achieve this goal is through the agreement itself. Both national carriers now regularly try to put early termination penalties into their pricing agreements, as well as including termination language that will remove discounts if the shipper opens the agreement to renegotiation during the agreement term or fails to meet minimum volume thresholds. These sorts of tactics should not be tolerated. Revenue-based discounts and agreement out-clauses provide carriers with adequate protection against low-volume, high-discount scenarios. Additional punitive terms and conditions are not only against the shipper's best interest, they are also unnecessary. Shippers can also become bound to their carriers through customized services or operations. One of the benefits of a good relationship with a carrier is the ability to implement custom solutions to shipping needs. Late pickups, carrier-provided hardware and software, direct drops and zone skips/ jumps – the list of things carriers can and will do for their valued customers is endless. However, allowing these customized solutions to become so ingrained in the supply chain that a shipper cannot live without them is a mistake many shippers make. The moment a carrier becomes irreplaceable is the when the shipper loses all ability to impact the price it pays for carrier services. This is not to say that carriers cannot be enlisted to solve problems or provide solutions. However, it is imperative that as carriers are called upon to provide value that the shipper develop alternative solutions and devise strategies for retaining its independence. This independence gives shippers the only piece of leverage in the carrier relationship. Retaining it is the key to success in achieving equitable, cost-effective parcel agreements in the future. Using twelve months of carrier invoice data, Körber developed a number of analyses and reports that provided valuable insight into Vera Bradley's parcel shipping. "Körber's consulting services have freed up time and money within our organization, allowing our team to invest in other strategic initiatives. Körber serves as an extension of our supply chain, and we value the long-term partnership we have built with Körber over the years." Director of Global Transportation & Trade for Vera Bradley

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