Logistics Company: Capturing Lost Revenue

Accenture helped a supply chain giant identify a number of opportunities to recover lost revenue and prevent future leakage.

This logistics company provides end-to-end design, implementation and operational solutions in contract logistics and freight management to large and medium-sized national and multinational companies. When it realized it had a problem with revenue leakage, it came to Accenture for a solution.

Like many companies that have grown through acquisitions, this organization’s information technology landscape comprised a number of legacy systems that were developed and maintained regionally. This fragmented IT capability contributed to a lack of transparency into the company’s operational data and cost structures. As a result, quotations were often incomplete. Ratings of shipment charges were prone to errors. And pricing guidelines were inconsistent and largely unenforceable.

Together, these challenges caused significant revenue leakage. The logistics organization knew it could grow revenue and better manage its costs by capturing this lost value. The company turned to Accenture—with its deep industry experience and research-based knowledge—for help in understanding the value of establishing a robust revenue leakage prevention and recovery program.

Accenture supply chain management professionals worked closely with the logistics company to:

• Conduct a detailed analysis of revenue leakage based on data from the organization’s disparate IT systems.

• Apply a rating value accelerator (a component of the Accenture Freight and Logistics Solution) to rate select invoices based on historic customer-contract and operational data.

• Apply, when appropriate, a pricing and quoting value accelerator, which provided insights into real-time costs, improved visibility into the quote win/loss rate and enabled the company to enforce market-relevant pricing on a consistent basis.

• Analyze the pricing, quoting and rating processes and data to understand the size of the revenue leakage, reveal root causes of the problem and identify quick-win process fixes.

• Develop an action plan to recover lost revenue on an ongoing, long-term basis.

Accenture’s experience suggests that high-performance businesses in the freight and logistics industry exhibit greater control over cost management and minimize revenue leakage through centralized accountability, traceability and consistent application rates throughout the shipment life cycle. By leveraging its value accelerators and tapping its deep industry skills and knowledge, Accenture was able to help this logistics organization understand the value that a distinctive capability in the area of revenue assurance would provide.

The eight-week assessment helped the company along its journey to high performance by identifying:

• More than $3 million of directly recoverable value in the rating process.

• $7.5 million of preventable costs that could be recouped in the pricing and quoting processes.

• Several quick-win process fixes, which showed how the organization might be able to streamline and reduce the complexity of activities related to pricing, quoting and rating.