Insights & News

Hard Costs Versus Soft Costs in Your Supply Chain (and How to Save on Both)

Posted On October 12, 2017

In sports, teams built on excellence look for players with both hard and soft skills. What do we mean?

In baseball, hard skills include how often a player gets on-base and how often they hit for extra bases. The combination of those two skills create a players OPS (On-base Plus Slugging), which is one of the primary ways a player’s performance is measured. In football, hard skills include how fast a wide receiver can run the 40-yard dash and how often a quarterback completes his passes. In other words, hard skills are tangible, measurable things, and your team won’t get very far if your players don’t excel at running, catching, and throwing. Soft skills are different. They are qualities like a player’s coachability, character, intelligence, and ability to get along with teammates. Building an excellent team requires having a blend of soft and hard skills. Building a supply chain and transportation program founded on excellence also depends on the tangible and the less tangible, and saving on soft and hard costs within your shipping department.

Soft cost savings include a reduction in time spent getting quotes from multiple websites, filing claims, or auditing freight bills. These alone typically create 2-3% more efficiency and savings in a company partnering with our team. Some of our clients don’t measure or track soft costs, but regardless of whether you measure them, they are real—and they make a difference. The savings don’t end with soft costs. Hard cost savings occur when our technology helps reduce your direct freight bill, and that’s a cost we isolate using a formal analysis during the RFP process. Teams that value and emphasize soft skills are better able to achieve sustained success, without spending a whole lot of money. The Moneyball approach the Oakland A’s used in the early 2000s placed a heavy emphasis on hard skills like OPS, while still valuing soft skills like intelligence and coachability. The result was a team that won far more games and got far closer to the World Series than any small-market team should. And, whether you love them or hate them, the New England Patriots have had a longer run of sustained success than almost any other professional sports team, in part because of the way they emphasize both the tangible and intangible.

(If you’re a Patriots hater, insert joke about Tom Brady and Deflategate here.)

Teams become excellent when they squeeze 2-3% more efficiency and higher performance in areas that their competitors overlook. By partnering with Flat World Supply Chain and the Flat World Holdings family of companies, you can increase performance and create a shipping department that is more efficient and better performing than your competition. Whether it is supply chain management, freight forwarding, custom crating, or hospitality project management, our team takes a holistic approach to your shipping department, logistics, and transportation management department to help you increase both soft and hard cost savings. Because excellent organizations focus on the tangible and the intangible.

And when you partner with our team, we will make sure to optimize cost savings on both the tangible and intangible in your shipping department.