Automating Freight "Should Cost" Computations

"On-demand" logistics spend management from Aankhen; Dell a customer for solution

"On-demand" logistics spend management from Aankhen; Dell a customer for solution

San Jose, CA — February 23, 2005 — Aankhen Inc., a provider of global procurement and logistics cost management solutions, has rolled out new functionality to let companies realize hard savings in global freight spend by automatically computing freight "should costs" without having to wait for invoices from carriers and third-party logistics providers (3PLs).

The provider said its new "Shouldbe Cost" offering would enable enterprises to optimize freight spend at a lane and item level not previously possible. The product, part of Aankhen's IRIS product suite, is intended to allow global procurement, finance and logistics managers to proactively manage embedded costs such as freight, storage and warranty in supply chain logistics and procurement.

The software automates "should cost" computations using negotiated rates and fees in real-time, in the context of logistics and pricing lanes for a procured item, identifying savings opportunities and eliminating the need to maintain manual spreadsheets, Aankhen said. Supply chain executives, commodity managers and logistics managers have global visibility to savings opportunities identified by IRIS intelligence services.

The provider's IRIS Logistics software, used by computer-maker Dell, is a solution for global freight environments, designed to enable manufacturing enterprises to become more efficient in spend management of freight across inbound and outbound supply chain networks. Visibility to actionable freight spend and invoice-based freight cost management is a manually intensive process requiring estimated accruals and reversals, with no added value to the enterprise.

"Lack of visibility to actionable freight spend has been blamed on existing systems, processes and data quality," said Subhash Chowdary, CEO of Aankhen. Chowdary said that, regardless of the enterprise resource planning (ERP) or transportation and warehouse management (TMS and WMS) systems in use, freight spend management remains a complex manual process.

"Aankhen's unique ability to automate computation of freight 'Shouldbe Cost' eliminates existing limitations and provides immediate and visible savings opportunities to create competitive advantage for our customers," Chowdary said.

Managing logistics costs has become ever more critical for companies like Dell as extended supply chains have added increasing costs to products. Dell CEO Kevin Rollins, for instance, has been quoted as saying that the cost of transporting a PC is higher than the cost of labor to actually build the unit.

Aankhen is a privately owned company with headquarters in San Jose, Calif.

For more information on the latest trends in the logistics space, see the article "The Analyst Corner: Fulfillment & Logistics" in the October/November 2004 issue of Supply & Demand Chain Executive.