Why Freight Audit is Critical for Healthcare and Life Science Supply Chains
Mastering Freight Audit and Payment (FAP) is the first step towards Transportation Spend Management (TSM) maturity. This is especially important for Healthcare and Life Science supply chains that are crucial to personal and public well-being. Disruptions in medication and medical device transportation can have a chain reaction of negative effects, for both healthcare companies and patients.
The first step to mastering efficiency and cost-saving methods is Freight Audit and Payment (FAP). Freight Audit and Payment is a gateway into saving costs, optimizing processes, and gaining more visibility. A good freight audit process is crucial for healthcare supply chains to continuously serve the community and grow as a company.
What is Freight Audit and Payment (FAP)
A Freight Audit process starts with creating data compliance across all invoices, shipments, and rates. This enables an audit to check for accuracy and validates that they are contractually compliant. Invoice inaccuracies often fall through the cracks with traditional accounts payable and receivable methods. This can be a culprit for many lost expenses and the inability to solve problems easily.
Implementing FAP entails invoice collections, invoice audits, discrepancy correction, and a faster payment process. It can also help with data management and data analysis. Each of these steps, when mastered, helps any supply chain spend management and is especially necessary for healthcare supply chains. Some companies choose to build their own methods for Freight Audit and Payment, while others conserve their efforts and outsource FAP solutions to companies like us, Trax Technologies.
Modern Healthcare Supply Chain Difficulties
For years, the main source of headache in the healthcare supply chain was the nature of healthcare and life science products. Many healthcare products and medications are temperatures sensitive, which calls for extra sensitive care when finding a carrier, route, and limiting disruptions. It requires consistent and clear communication while mitigating the many risks that can happen through transportation.
End-users are dependent on the viability of their medical products, and supply chain companies have to utilize extra resources to ensure the safety of each product. Not only does this cause even more complexities, but it calls for extra care in spend management.
Since the COVID-19 pandemic began in 2020, there has been more pressure placed on healthcare supply chains. Quarantine slowed production, while there was a higher demand for products like PPEs and ventilators. Carriers had to, and still have to, navigate through regional restrictions and lockdowns. This perfect storm brought on longer delays for healthcare product transportation and strained supply chains as they tried to push back against this pressure.
How FAP Can Improve Healthcare and Life Science Supply Chains
Healthcare companies can always improve their accuracy. Improving and optimizing accuracy can have a positive impact on many aspects of the supply chain. It all starts with Freight Audit and Payment.
Freight Audit and Payment not only audits invoices for accuracy but helps your company collect crucial data. Quality data on your invoice and overall finances is the tool you need to find patterns, become proactive, and predict disruptions. Your healthcare supply chain needs an accurate payment system. Mitigating disruptions in the payment process before they begin will minimize transportation delays.
Fewer disruptions throughout the payment and transportation process will keep products viable and safe until they reach the end-user. As you gather more data, your company will be enabled to be more strategic, optimize your process, and become more reliable for your carriers, partners, and ultimately, the end-user.
The traditional way of sending and receiving invoices promotes a lack of communication and leaves room for error. Working with multiple carriers and partners brings many complexities and inaccuracies that can cost money and resources, along with diminishing a relationship with your partners.
Freight Audit and Payment collects your data efficiently and accurately, allowing you to access the information you need. Visibility of this data makes communication easier and ensures that costly mistakes don’t fall through the cracks. Your company can make decisions faster with accuracy and confidence. Find where your processes fall short, and make strategic decisions to optimize your processes. This can encourage smooth processes throughout the supply chain, and simplify the complexities that come with shipping life-saving products.
Unnoticed inaccuracies in invoices can add up to countless dollars lost. Invoice amounts could be inaccurate or even against contractual rates. Reducing these resources can hinder your supply chain’s capability to meet demands and mitigate risks. Freight Audit and Payment will minimize inaccuracies while making it easier to see where your expenses are best allocated.
Inaccuracies and disruptions in the payment process can also hinder your company's cash flow. Fast payments allow for more flexibility with expenses, and predictability of payments helps your company make stronger financial decisions that prioritize the company's growth, as well as the end-user experience.
Pressures from the COVID-19 pandemic have yet to fully lighten up, but that does not mean your company can’t grow through the trials. Mastering FAP is the perfect opportunity for your company to learn new ways to become efficient in payment and transportation. It will provide insight on how your company can best handle disruptions so that in the future, distributions can’t even begin brewing within your supply chain.
Trax Technologies knows that once Freight Audit and Payment is mastered, it is only a matter of time until your company is leading in Transportation Spend Management (TSM).
How Can Trax Help?
Trax’s Freight Audit and Payment solutions will help your company validate your invoices, provide quality data, and easily make strong decisions while we save your company money. We provide your company with the resources needed to become a stronger and more proactive supply chain. As you master FAP, Trax can help your company with Transportation Spend Management.
Our data, carrier, and financial management solutions will optimize your processes to the next level so that you become the new trend-setter in TSM. There are always ways for your healthcare company to grow, and Trax can help turn these trials into a learning and growing opportunity. Visit our website to learn more, and schedule a consultation to learn how our solutions can benefit your supply chain.
Trax is the global leader in Transportation Spend Management solutions. We partner with the most global and complex brands to drive meaningful optimizations and savings through industry-leading technology solutions and world-class advisory services. With the largest global footprint spanning North America, Latin America, Asia, and Europe, we enable our clients to have greater control over their transportation performance and spend. Our focus is on your success.