New England Supply Chain Conference & Exhibition

APICS - The Association for Operations Management North Shore Chapter 20 and Boston Chapter 10    --   The Council of Supply Chain Management Professionals (CSCMP) New England Roundtable    --    The Northeast Supply Management Group, A Special Interest Group of ISM®

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Opportunities in Travel Management - Jack Barry

Opportunities in Travel Management

by Jack Barry

Innovative companies are recognizing that same successful approaches used in supply management when focused on travel management can provide significant benefits:

  • Cost savings of 15% to 25% off current travel budget.
  • Enhanced services & schedule flexibility to travelers.
  • Improved operating controls/efficiencies and employee participation.

These opportunities are available and achievable now, because:

  • For most companies, travel expenditures represent significant and controllable expenditures, averaging $16,000 per frequent traveler.
  • Technology and the Internet provide readily available action-oriented information that allows real-time tracking and visibility, often available at no cost by the travel suppliers and agencies.
  • Market and regulatory changes have made travel expenditures highly sensitive to leverage advantages that lead to significant cost reduction opportunities.

The benefits for most companies are real and obtainable. Others have achieved cost reduction of:

  • Airfares 15-20%
  • Hotels 20-35%
  • Car rentals 5-25%

...and these benefits do not have a negative impact on customer service.

Successful companies combine three critical elements to establish effective travel management programs:

  • They enter into direct negotiations with the prime travel suppliers who represent over 75% of cost - one company realized over 40% net reductions on all airfares with no reservation restrictions.
  • They have instituted effective programs to motivate employees to participate in travel opportunities - another company offered as incentives to their employees to participate in the company's consolidated travel program by providing extra frequent flyer miles and automatic upgrades.
  • Lastly, and most importantly, those successful companies have looked to supply management professionals to manage the travel related expenditures - recognizing that the purchase of travel services should be managed in a professional way as any other purchase.

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