Tuesday, December 8, 2009

Snap out of it -- one person and one task at a time

This blog entry is meant to be an encouraging appeal to people in businesses everywhere, from the mail room to the CEO suite. Examine your personal philosophy about how you do what you do. The premise is simple and is one that I conveyed to my children just recently: singular, repeated excellence has a funny way of snowballing into corporate excellence (no, I do not talk corporate governance/motivation with my kids).

I am reminded of a well-worn quote that has stayed with me for years from one of the more quotable characters in our rich history, Teddy Roosevelt, who stated,

"It is not the critic who counts: not the man who points out how the strong man stumbles or where the doer of deeds could have done better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood, who strives valiantly, who errs and comes up short again and again, because there is no effort without error or shortcoming, but who knows the great enthusiasms, the great devotions, who spends himself for a worthy cause; who, at the best, knows, in the end, the triumph of high achievement, and who, at the worst, if he fails, at least he fails while daring greatly, so that his place shall never be with those cold and timid souls who knew neither victory nor defeat."

So what is the application to our daily lives? Well, this life is your story. You have to live the story. Why live it in a mediocre way? You are not designed for mediocrity. Rather, go out and sweat and bleed in the dust and in the arena, as Teddy says, so that you can know, at the very least, what it means to pursue high achievement. In all tasks, micro or macro, tell your story by the manner in which you approach your life, your work, your tasks. No matter where you fall on the corporate ladder; you have a job to do. Do it well.

Recently, I had occasion to be in the Midwest for business at the headquarters of a Fortune 500 company. As we waited in the vast lobby for our meeting to begin we were introduced to Fred. Fred is a security guard at the front desk and he greeted each and every person by first name! Now, to paint a clear picture of the scene, there were literally hundreds upon hundreds of people walking in and out of the building past his station during this particular lunch hour and he knew every single person’s first name. We came to learn that this small but impactful (and repeated) gesture resulted in Frank’s presence at national sales meetings and board meetings for this company for the purpose of illuminating excellence in customer service and attention to detail.

Bottom line: get in the arena and live your story.

Thursday, November 12, 2009

IRS Reverses FedEx Ground Ruling

In what appears to be the latest chapter in a series of long-awaited FedEx rulings on their independent contractor woes, the IRS announced that it has dropped the last audit of FedEx. At present, FedEx does not expect any more audits on the company for this matter.

The IRS ruled in late October that it will reverse its earlier stance and previous assessment that FedEx had misclassified some of its package delivery drivers as independent contractors. The reversal squarely backs the FedEx stance that its classification of certain drivers in the network as independent contractors is appropriate. Furthermore, the ruling drops a potential $319 million assessment by the IRS. FedEx broke the news in their SEC filing.

For the past three years, it has been common for us to hear UPS warn our clients during presentations about the status of FedEx independent contractors and to watch for a huge move by the federal government to push for the classification of these drivers to employees. That would open the door for potential  labor union representation and a more level playing field when it comes to how this part of FedEx's business is managed (UPS drivers and other parts of UPS are represented by the Teamsters). Now that appears to not be the case.

What we're seeing as we complete a record number of projects in 2009 and slated for 2010 is that FedEx has made aggressive moves to gain market share among dwindling and finite package volume. Most recently, FedEx announced the introduction of their SmartPost service; a low-priced ground residential delivery service that has significant cost savings in the 1-10 lb range. The delivery of SmartPost packages is handled by both FedEx and the US Postal Service.

At the same time and within the same climate, we're seeing backward moves by UPS. Although most pricing remains competitive, UPS is tendering odd documents with their new rounds of pricing; including loosely-worded early termination agreements. For nearly two decades, UPS has been overt in their education to the shipper that their pricing documents are "Carrier Agreements" (as worded clearly on the top of every document) and not a "contract". With the advent of early termination, one would construe that there must be a term...and with the statement of penalties for early termination, it would appear that these are now contracts.

The months of January and February are always interesting in our organization, as we're fielding calls and requests from clients and prospects for assistance with the rate increases that they knew were coming, but didn't know how they would affect their bottom line. This winter will also be an interesting time to watch the continued jockeying of the two remaining global service providers in this space.

IRS Drops Last FedEx Audit
IRS Reverses FedEx Ground Ruling

Wednesday, November 4, 2009

When Rates Caps Aren't Enough in 2010

The 2010 general rate increase will impact your business in more ways than one. Don't let 2010 be another year when the carriers raise your base rates well over 5% and also increase the surcharges that will ultimately drive up your overall cost of doing business. For example, the FedEx accessible dangerous goods surcharge will increase over 9% going from $65 to $70. Another example is the FedEx Express oversize charge increasing by 9% from $45 to $50 per package. We are all experiencing one of the most challenging economic environments in recent history and the road ahead is treacherous at best. PA & Associates is poised to take your carrier negotiations to a new level with a financial model that has produced an industry leading 42% average savings for our clients. Our value stems from over 18 years of logistics and financial expertise and a team of logistics professionals that deliver quantifiable results.

PA & Associates understands your desire to elevate your ROA (return on assets) and effectively streamline your supply chain. We provide solutions and deliver financial results. Call PA & Associates today at 1-866-200-SAVE to discuss your potential for savings!


Contributors: Steve Syverson, Clorisee Canada, Scott Guldin

Tuesday, November 3, 2009

Help! My Bus With The Right People On It Is Sinking In The Blue Ocean

Sorry to mix business self-help metaphors but I cannot stand empty slogans and war cries! It is a real chafe.

For example, many companies now espouse a “spend management” platform. Like so many hackneyed terms in business, spend management is now overhyped by those companies that are trying to use it as a sword but their services prove to be a meat cleaver instead. Let’s be clear; spend management is more than just cost reduction. Spend management is a philosophy, a practice, a discipline, and ongoing best practices management. And CFOs beware; there is a lot of “sizzle” but no “steak” with many of these service providers and consultants that purport to adhere to spend management principles. Spend management should be the manner in which companies control and optimize the money they spend. So, while cost reduction is the immediate impact, spend management presumes an ongoing discipline and internal practices to control and optimize the spend environment.

Well then, Chris, how can I seek out true spend management companies you might ask? I am glad you asked. Characteristics to be mindful of when considering utilizing a vendor to provide spend management services include: proven data-driven results; the breadth of expertise within that spend area; the makeup of the project team to ensure they bring relevant acumen to the table that is of value to your company; technology solutions--technology solutions--technology solutions; a client list that speaks to your specific industry and spend criteria; white papers, and a consultative and partnering mentality that they bring to each and every project. Experience has shown that such characteristics would indicate that the vendor is capable of not only cost cutting but also implementing far-ranging spend management practices.

The number of indirect spend areas that are in the crosshairs of the vigilant CFO is growing (energy, waste management, logistics, telecom, office supply, accounts payable, printing, cost segregation, etc.), so would the real cream please rise to the top?!!

Saturday, October 24, 2009

Importer Security Filing Fines, Penalties, and Their Mitigation

As noted in the previous posting, up until recently the required Importer Security Filing (ISF) information was typically provided after the order had shipped.

Because of the change in information and document flow ISF compliance requires, U.S. Customs has allowed a period of “flexible reporting” and “flexible enforcement” ending January 26, 2010. This is when fines, penalties, and “Do Not Load” messages will begin.

Flexible Reporting –

The actual manufacturer or supplier, country of origin, HTSUS (U.S. customs tariff classification), and final ship-to party may not be accurately known 24 hours before the cargo is loaded. Until January 26, 2010 importers will be permitted to submit an initial response based on their knowledge or data available at the time of filing. They must then update the ISF with accurate information no later than 24 hours prior to arrival at the first U.S. port.

Flexible Enforcement –

CBP will refrain from assessing fines or penalties as long as the importer is “showing good faith” in filing accurate and on-time ISFs during this period. CBP has begun issuing “report cards” documenting current accuracy and timeliness, and expects continued importers compliance improvement.

The “flexible reporting” and “flexible enforcement” period ends January 28, 2010, when CBP will begin issuing fines. They will then also issue “Do Not Load” messages via AMS to the carriers, effectively “stranding” containers at origin.

ISF Penalties and Mitigation

CBP has now released their guidelines for determining and levying ISF penalties and what it considers potential mitigating circumstances regarding severity of the penalties.

The ISF ruling and guidelines on penalties and mitigation are written vaguely. They provide CBP almost unprecedented discretion and a wide range of actions in both assessing and resolving claims of infraction. In fact, CBP may simply allege failure to file, incomplete or incorrect data, and treat as breach of the importer’s bond; i.e. the importer failed to comply with U.S. import laws and regulations.

First offenses are subject to fines and penalties (liquidated damages) up to us$5,000, and may increase with subsequent violations. The most serious violation is obviously failure to file and blatant deception.

Major offenses under ISF include failure to file, filing late, filing inaccurate information, failing to file updated information, and failure to withdraw a filing the importer has learned is inaccurate.

Published mitigating factors for importers include:

Evidence of good faith progress providing ISF data during the “flexible period”
Relatively low number of violations compared to total ISF filings
ISF failure due to reasons beyond the control of the importer (i.e. carrier had to divert ship to another port)
Faulty ISF data was based on commercial or shipment information from another party but within normal international commercial acceptance.

Cancellation of ISF fines and penalties may be possible if the importer can demonstrate it was not able to verify the data before the filing and / or it was reasonable to believe the information was true, and corrective action has been taken. Up to 50% reduction of fines is possible if the ISF importer is C-TPAT certified.

Published aggravating factors are:

X ISF failures were intentional deception, part of smuggling, or supporting violations of other import laws or regulation
X Consistent faulty data or violation for the same data field
X Consistent multiple errors on the same ISF
X Obstruction or failure to cooperate with Customs investigations of any violation

Due to the fast approaching final deadline (January 26, 2010) to be in full ISF compliance, it is highly recommended that U.S. importers advise their suppliers of these new requirements. It would also be appropriate to revise and amend foreign purchasing agreements, Letters of Credit, etc., to clarify and define supplier or seller support for this data collection. If you are a Supplier or Agent for a U.S. Importer and have not been contacted by your clients please reach out to them now.

If you do not fully understand the Importer Security Filing requirements, need assistance in selecting a partner or implementation, or have any other questions, please contact us immediately!

Monday, October 19, 2009

Full Importer Security Filing Compliance Deadline Fast Approaching!

In only three months the Importer Security Filing, also known as ISF or 10+2, will go into full effect. Many importers are still unaware of the consequences of non-compliance, or have simply been postponing implementation. Now, however, it is really time for action.

Basis of ISF

The Importer Security Filing is based on the USA’s SAFE Port Act of 2006. U.S. Customs and Border Protection (CBP) published its ruling on the Importer Security Filing on November 25, 2008. Similar to the 24-Hour Advance Vessel Manifest (AMS) rule, C-TPAT, Container Security Initiative, and other security measures, ISF is designed to improve national and international security.

Since January 26, 2009, all U.S. importers (definition also amended by CBP for this ruling) have been required to electronically submit 10 data elements, plus bill of lading numbers, 24 hours prior to the loading of containers and break bulk cargo onto ocean vessels at the foreign port. The ocean carrier must also file 2 data elements - the vessel stow plan and the container status messages. This is the “+2” of 10+2. The key or connector to the ISF, the AMS, and the customs entry is the house bill. The 24-hour advance “timing” is based on the AMS filing and container status message data.

This ISF information must be filed for all ocean shipments entering, or even just transiting the USA, including shipments going into Free Trade Zones (FTZ). For In-Transit or FTZ shipments only 5 of the 10 data elements must be filed. Please contact me if you are interested in a comparison chart of the individual breakdown of data elements for these shipments.

Filing the ISF

U.S. importers may choose to file this information themselves, or contract with an agent to do this for them. However, only those entities certified for transmitting electronically to U.S. Customs via AMS (normally forwarders and NVOCCs) or ABI (customs brokers) interfaces may submit the actual ISF filing. Obviously most ISF filings will be submitted via a “Filing Agent”, much the same as most customs entries are filed by a customs broker. Either way, legal culpability for filing in an accurate and timely manner remains entirely with the importer.

The best ISF filing programs support web-based, user-level access, allowing both electronic download or manual input of data by the shipper (or its supplier / vendor), and allowing the importer or customs broker to verify / edit data prior to filing. This is a very important aspect as U.S. Customs will later compare the ISF filing with the actual customs entry to verify accuracy of the importer’s ISF data.

Acquiring the ISF Data

Much of the required ISF information has historically not been available until later in the time-line of events, as the export and commercial documents have typically been issued well after the shipment was loaded and placed in transit. U.S. importers must work with and educate their foreign-based suppliers regarding the new information requirements, and develop a method to submit or provide this information to their Filing Agent in a timely fashion. This “need” is critical because fines of $5,000 per incorrect or late filing can be issued.

Because of the change in information and document flow ISF compliance requires, U.S. Customs has allowed a period of “flexible reporting” and “flexible enforcement” ending January 26, 2010. This is when fines, penalties, and “Do Not Load” messages will begin.

I will address this “flexible” period as well as ISF fines & penalties, and their potential mitigating factors in my next post.

Thursday, September 24, 2009

Panelist appearance on BlogTalk Radio: Spend Management vs Spend Intelligence

I had the fortune today of being part of a panel discussion on Jon Hansen's BlogTalk Radio show PI Window on Business. Jon's topic for today was around the topic of Spend Management and, specifically, the difference between spend analysis and spend intelligence. The panel consisted of two other business professionals; an author, speaker and consultant on management consulting and a professional that handles Sarbanes-Oxley compliance issues within businesses.

Hansen's idea for the show stemmed from an article titled Spend Intelligence: The Next Wave of Spend Analysis (Sudy Bharadwaj - Supply Chain Management Review 9/1/2006). The show covered a number of interesting points including the idea of there even being a difference between spend analysis and spend intelligence, the role of on-demand reporting and Software as a Service (SaaS), change management issues that organizations face in adopting a new, best practice approach and other interesting topics.

The show aired live on 9/24/09 and the on-demand audio is hosted below. I look forward to any comments you may have.

Tuesday, September 15, 2009

Scrapping or mothballing ships may keep capacity articially low and rates high

The story by Simon Parry of the UK’s Daily Mail is an excellent overview of the true current crisis in the ocean freight sector ( http://www.dailymail.co.uk/home/moslive/article-1212013/revealed-the-ghost-fleet-recession.html ). This is a “must read” article if you want to know what is really happening in ocean freight and how it will continue to impact all of us over the next few years.

Like many supply chain professionals I like and read the Journal of Commerce daily, and am up-to-date on the changing numbers side of this issue. In short, the current (depending on your sources) idle ship statistics are approximately:

Container traffic = 12-15%
Roll On – Roll Off traffic = 20%
Tanker traffic = 2-15%

While oil production has dropped about 13%, only about 2% of tankers are listed as idle. This is partly due to incomplete reporting, but more likely due to oil producers leasing the idle ships to store crude and keep “market” supplies lower – http://www.msnbc.msn.com/id/29495753/

Simon’s article, however, not only presents the numbers, but has also covered personal viewpoints and details that are typically missing from mainstream industry-related publications. It is really quite good.

You may want to check with the Journal of Commerce occasionally to get updates. Here are links to a few of their recent articles (FYI - Box ship = container ship. TEU = 20 foot container. Divide by 2 to get 40 foot container equivalent).

This year container lines are set to scrap ten times more ships than average and the most ever recorded in one year – http://www.joc.com/node/412132.

Close to 15% of container ships may stand idle by end of 2009 – http://www.joc.com/node/412342.

Roll On – Roll Off = car, truck, equipment carriers – http://www.joc.com/node/412397.

By the way, Baltimore Ro-Ro shipments (the nation’s top overall Ro-Ro port and No. 2 in automobile exports) are down 14 % this year.

Scrapping or idling ships in this manner serve to drive capacity down and provide the basis for higher rates. We have spoken to rising ocean freights rates in a recent post (see below).

Wednesday, September 2, 2009

When it comes to parcel mode optimization, AP reporter gets it "kind of" right...

When The Associated Press reporter Samantha Bomkamp released her piece As consumers slow down, FedEx and UPS adapt (AP News, September 1, 2009), she got it kind of right. After all, sending paper overnight through the guaranteed services FedEx and UPS provide might be considered a luxury for businesses that have the alternative to use USPS or the "deferred" services that FedEx and UPS provide [see inset frame below for full article].

Bomkamp's contention is that consumers and small businesses that have relied on the overnight services (FedEx Priority Overnight and UPS Next Day -- both services offer next morning delivery of documents and packages by 10:30 am) have re-evaluated their spendthrift ways of days gone by when times were good and revenues plentiful. For those that still require the enhanced offerings for delivery -- including tracking, delivery signatures and guaranteed services -- the solution has been to opt for the carriers' less-expensive modes of delivery, such as two-day and three-day delivery services. And while there is no doubt that these deferred services are priced lower than the overnight services, the knee-jerk reaction to cost-reduction misses the mark as a cost-reduction strategy for those who need overnight delivery as a competitive advantage.

A trusted connection of mine who was formerly employed by one of the top-three global commercial real estate firms forwarded me an internal e-mail communication from the company's CEO that urged all employees to cease the use of overnight delivery services in favor of the slower, less expensive carrier offerings. Think about that for a minute. These are some of the most successful and driven real estate professionals in the world being asked to relinquish a competitive advantage of timely delivery of urgent and important real estate documents (offers, contracts, plans, payments, etc.). Competitors that get offers in ahead of others stand to gain an advantage.

It would seem that a better option would be to reduce the cost of the service that is required. In the example above, our organization attempted to position our logistics spend management service offerings in front of the corporate office to do just that. Bomkamp's article below discusses a small media relations firm in VA who's CFO was trying to strike a balance between reducing headcount and reducing indirect spend. He was able to make a mode optimization, like that referenced above, which saved the organization $14,000 annually. The firm reported that they employed a staff of 13. Not a bad savings, but not the optimum approach. I would doubt that his $14,000 in savings accounted for any of the thirteen's annual salary.

That said, we have been hearing this message for the last 24 months; its reduce expenses or reduce headcount. When the full costs of hiring (and re-hiring) are evaluated, reducing headcount is a backwards approach to cost-cutting. Granted the balance sheet effects are immediate and the modeling compelling, but the approach is short-sided. Services like PA & Associates' make more sense to explore prior to the last-ditch measure of cutting headcount. Ask CFOs if they have taken cost-cutting measures during the last year and they will report they wrung the general ledger dry of all expenses. However, when we dig down into many of the indirect spend categories we find that best practice procurement, strategic sourcing and true spend management techniques have not been employed. Its a mentality of, "we flip the light switch on in the morning and turn it off at night; we're going to get an electricity bill and there's nothing you can do about it". That's just not the case.

The economic downturn has produced two sets of cost-cutters; those who have made the easy and obvious cuts to survive and those who have fully changed their mindset on what it means to run lean. Our clients comprise the latter group and have employed our methodologies as best practice spend management techniques in multiple areas of their operations for real and lasting cost reduction and continuous improvement (spend management). Many are saying that we'll never be the same when things completely recover. I differ with them in that human nature is to resist change and opt for the path of least resistance. We will see some that will make lasting change and it will become their new culture. We will, however, see a large number of those that will go back to their old, wasteful ways when revenues return. How easily we forget.

Thursday, August 27, 2009

Ocean Freight Rates Are On The Rise! Have You Renegotiated Your Rates Lately?

Ocean freight rates are on the rise. This is particularly true of ocean container shipments. In the last three months average ocean freight rates (container transport particularly) have climbed up to 55%. Have you renegotiated your rates lately? If not, now is the time!

Effectively negotiating ocean freight is not so simple and depends on knowing a fair amount of detail. Will you have many “one-time” shipments, or more a repetitive business with each shipper? How much product are you shipping at one time, or if repetitive, each shipment? If repetitive, how often? The answers to these questions also determine if you want to use a freight forwarder or negotiate directly with the ocean carriers.

Door to door transit time is also a huge consideration. Will you ship to a major or “gateway” port and then truck to multiple distribution centers? Or will it all go to one DC? If you are planning on moving the containers intact to an inland DC, some difficulty may arise depending on the ocean carrier, and rail charges can be quite high.

There are quite a few charges that may be a part of the total ocean / delivery transport costs on a typical import shipment. Some may be negotiable with the carrier / forwarder (given sufficient volume and frequency) and if you understand how ocean freight rates are calculated.

Some of the most common ocean freight cost components are:

BAF - Bunker Adjustment Factor Surcharge
CAF - Currency Adjustment Factor
PSS - Peak Season Surcharge

… and 10 to 15 more depending on your actual contract and shipments.

Depending on your terms of sale (Incoterms) you may pay origin charges including:

ORC - Origin Receiving Charge
ODF - Origin Documentation Fees
THC - Terminal Handling Charges

If your shipment is moving inland from the port you may pay:

DDC - Destination Delivery Charges
IPI - Inland Point Intermodal or MLB - MiniLandBridge
IFC - Inland Fuel Surcharge

In addition, your container freight rate may depend on the actual commodity being shipped.

Of course for your full “landed cost” there are the myriad of other costs not directly associated with the ocean freight or container rate, some of which include:

Importer security Filing (ISF or 10+2)
Customs Brokerage
Duty & Taxes
Stripping and / or Transloading of Containers
Interim warehousing

and, and, and …

If you need more detail or clarification, we will be happy to work with you to setup a bid or RFP (Request For Proposal), or to audit or review your current rates and processes for possible improvement.

Whatever you do, plan for success! Poor planning can result in much headache and unnecessary expense. Great success will follow your good planning.

Contact us today at ray@paaa.com for more information.

Wednesday, August 26, 2009

Welcome to the New World of Spend Management (or the world you just noticed!)

As history and B-school case studies reveal, it is often only through adversity that companies recognize and then embrace systems and processes that make them "better" but were there all along. Take, for example, the somewhat esoteric term, "spend management" in the business community. This term is now on the lips of CFOs, controllers, CEOs, finance directors, etc., across the globe. But why now? Or, more important, why not earlier?

C'mon, let's face it, we rarely try to change things up when we are fat and happy, right? you know how the old addage goes, "If it ain't broke ..." The truth of the matter is, though, that spend management practices and initiatives have been around for decades. The glaring difference now is that companies seek to incorporate them into EVERY aspect of their business. A concept too long in coming (and, for many, too late).

What we find in the logistics spend management space (see, there ya go; every aspect of your business!), are companies working diligently to find resources to get lean but to get SMART as well. For example, and on the one hand, a medical device company in New Jersey works with PA & Associates to get "lean" in its logistics environment with a parcel carrier agreement negotiation project that saves the company hundreds of thousand of dollars. But then, on the other hand, the same company takes it a step further and gets "smart" by managing that spend area moving forward with better software and analytics, and, therefore, better practices in the environment. The same could be said of a PA client in Omaha, Nebraska that availed itself of PA's wildy successful domestic parcel negotiation project and followed it up by implementing savings projects for its international freight spend under PA's direction and counsel.

With spend management as a ubiquitous term in our present condition, one also finds unqualified peddlers preying on the hopeful CFO like vultures on a carcass. At the end of the day, however, working with a true solution-providing consultant is all about trust and value, two of the more hackneyed terms today. But, like beauty, you will know trust and value when you see it.

Saturday, August 8, 2009

FedEx/UPS Resemble Candidates in an Election Year

What's going on?

The raging battle between FedEx and UPS looks more like mudslinging congressional candidates in a fierce battle for office than the top-tier corporations they claim to be.

First, take the allegations that surfaced late last week regarding UPS employees being coerced into letter-writing and lobbying against FedEx. UPS has already admitted that it paid for employees' time and supplies to write letter lobbying representatives that the present classification of FedEx as an airline creates unfair competition (UPS is classified as a trucking company and, thus, uses Teamsters labor resources). UPS claims the participation in the campaign to be voluntary.

Although alleged at this time, a number of reputable sources have been reporting that the UPS characterization of the activity is incorrect. Some (now former) UPS employees have been vocal about thier employer's heavy-handed tactics and their expectation that employees would follow lock-step.

Although aggressive and disturbing, UPS isn't the only one at fault. FedEx launched a website months back to put its own propaganda into the market. In the offices of PA & Associates, we received more than one e-mail from FedEx staff encouraging us to visit the site and side with the FedEx position that UPS is just another large corporation seeking federal government financial assistance.

As a normal course of our projects, I have sat in a number of UPS and FedEx presentations where representatives attempt be on their best behavior in hopes of landing the small package business of our clients. Underneath the calm demeanor and clenched teeth, each exhibits a seething dislike for the other; remembering the echoes of their Zig Ziglar training and sales manager's admonitions to only sell on the merits of their service and not to disparage their competitors. Unfortunately, most of them (on both sides) can't help themselves.

It remains to be seen as to the outcome of the FedEx issues and the discussions which are ongoing as to the status of their network. One thing you can be sure of; the propaganda machines are hard at work on both sides -- be it a "Purple" spin or a "Brown" spin.

Tuesday, August 4, 2009

Harness the Power of the WWW Community (for logo design!)

Remember the early days of the Web? When we referred to it as the World Wide Web (www)? We did that for a few reasons. First, it was brand new to most of us and we were just using the parlance that others created.

But second, and more substantially, it literally was a "world wide" web; doing something that had never before done...demolishing the geographic barriers between people, ideas and the collective talents of the entire world. With all of the creative uses, applications and Web 2.x features, the real power of the web lies in the leveraging of entire communities worldwide to produce a true market-driven outcome.

Take, for example, the simple and powerful idea of LogoTournament.com.

One of a number of these types of competitive sites (you may be familiar with the widely-advertised LendingTree -- where you apply for a home loan and lenders submit their offers), LogoTournament.com allows an individual or business post a creative brief and request for a logo design. Attached to this request is any amount over $250 the requesting party agrees to pay for the final logo.

Designers from all over the world submit their offerings and work through revisions based on feedback. All against the backdrop of a contest deadline. In the end, the client gets a number of creative directions to choose from and camera/web-ready artwork.

I recently used the site in the creation of a logo for our service methodology, 3-Part Logistics Spend Management (3PLSM for this article). Creating an account was straightforward and I had a pretty good idea of what our brand is and the use of the logo being requested, so moving through the forms used to create the creative brief were fairly easy. That said, you're not locking yourself into a direction once you submit, as you can return to the project and edit these ideas for the designers at any time.

LogoTournament encourages you to consider putting a higher "prize" (the amount you award to the winning design/designer), the idea being that a higher prize will attract the top-tier designers registered on the site. I'll leave this up to you. I will say that the project for 3PLSM carried a $250 prize and the submissions, both quantity and quality, were adequate for my use.

A great concept isn't enough these days. You need great tools to make the experience worthwhile. LogoTournament offers the latest Web 2.0 interfaces, allowing you to view designer submissions. sort and rank logos, make comments, and interract with the designer community.

If you've engaged a designer...or, worse yet, a marketing/advertising firm, to create a logo you probably paid more than $250 and had the creative energy of one designer. Offering a pittance of a fee for a varitable universe of designers is harnessing the true power of the world wide web and its community.