Transportation Management Focus: You Move It, We Write About It  
 
 

- March 3 , 2010 -

Logistics News: The Many Ways Companies are Using TMS



The Use Cases for Transportation Management are as Varied as Companies and their Supply Chains; We Provide an Overview of Six Recent Successful TMS Examples


 
 


SCDigest Editorial Staff
 

SCDigest Says:
The new TMS capabilities are highly impressive to many of Kraft’s retail customers, who can find savings themselves by working with Kraft on backhauls and other collaborative transportation strategies.

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The scope and focus of today’s Transportation Management System implementations are naturally as varied as there are different types of companies and their supply chains.  Below, we provide a summary of a variety of different types of TMS use case scenarios to show this diversity and help readers think about transportation opportunities their companies may have.

 

Kimberly-Clark Gets Transportation Savings Going the Right Way

 

Consumer products giant Kimberly-Clark Corporation (KCC) has had centralized transportation management since the 1980s, but relied primarily on home grown technology tools. As a result of that and other factors, the amount the company reduced transportation costs in relation to its total freight spend started trending downward in 2005.  To get back on track, KCC first used a transportation modeling tool to strategically analyze its network, identifying opportunities to optimize overall flows and modes across lanes.

KCC subsequently executed an ambitious project to implement a new TMS not only in North America but throughout Europe as well. The system used advanced load consolidation, mode selection, and shipment execution capabilities. Those and other TMS functions were tightly integrated into an overall “order to cash” process in its ERP.  KCC also gained additional efficiencies through a new tariff maintenance tool that enabled automatic population carrier rating changes into the TMS.

The result: the freight “savings” as a percent of total spend curve turned completely the other way, moving substantially higher each quarter for a full year after system implementation.

 

CONTECH Construction Products Sees Big Value from On-Demand TMS as Platform for Growth

 

CONTECH Construction Products (West Chester, OH) is a fast growing manufacturer of a variety of engineered products for the construction industry such as pipes, earth stabilization systems, drains and more.

When new VP of Logistics Rick Gaynor came into the company, he found very manual processes and limited technology being used to manage transportation – despite the fact that the company spent a lot in transportation and had a low value to weight ratio for most of its products.

CONTECH went with an on-demand TMS, in part to accelerate the time-to-value. In fact, it implemented the new on-demand system in just 30 days.

CONTECH runs a hybrid transportation management model, with “long-haul” movements being managed centrally and short-haul movements locally, at the plants. It used the new TMS to support that model, in addition to capabilities to manage its private fleet all in a single platform. It also uses the TMS to now manage inbound freight, which was left to suppliers in the past.

 

Just as importantly, the company views the TMS as enabling it to rapidly bring new company that CONTECH acquires into its logistics operations and begin to generate the savings synergies potential from the deal very shortly after the new company is acquired.

 

Kraft Focuses on Collaborative Transportation – and Logistics as a Differentiator

 

Food giant Kraft Foods recently implemented a new TMS solution which not only gave it the ability to improve mode optimization, load consolidation, and other traditional TMS benefits but also took it to a new level in terms of being able o do “load linking” and continuous moves both within its own network and with its suppliers and customers.

The new system provides unique capabilities for finding opportunities for these kinds of moves, which companies have in the past looked to achieve but found difficult to make happen in practice.

They call the process “Collaborative Transportation Engineering,” and it is saving the company big dollars and providing it with a great Green logistics story to tell.

It is also highly impressive to many of Kraft’s retail customers, who can find savings themselves by working with Kraft on backhauls and other collaborative transportation strategies.

Michael Cole, Director of North American Logistics Operations Planning for Kraft, said last fall that when retailers see the technology that Kraft has developed to power that approach, they are very impressed.

 “We don’t have anything like that,” Cole said retailers will tell him.

 

(Transportation Management Article - Continued Below)

 
     
 
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Master Brands Goes from High Touch to Low Touch

Master Brands Cabinets (a division of Fortune Brands) is a leading provider of kitchen and bath cabinetry and related products. It faced a number of transportation challenges, some due to the nature of its products (nearly all make-to-order, some constraints on usable modes) and some due to its own internal limitations (“tribal knowledge” versus a rules-based approach, separate transportation planning and execution groups).

In addition to a lack of optimization, Master Brands’ approach and technology led to highly manual processes and redundant data entry. Planned loads were actually faxed “with lots of notes” to the execution/dispatch group for execution, for example.

A new TMS not only presented the opportunity to automate those manual processes and achieve better load consolidation and optimal carrier selection capabilities, but also to integrate the TMS with production scheduling to adjust manufacturing plans within delivery windows to optimize transportation and total supply chain costs.  To accomplish all this, Master Brands decided to go with an on-demand TMS model, a solution which it expects to roll out to other divisions of the company.

Warehouse Club Retailer "Bids" for Success

One of the major warehouse club retailers wanted to reduce contracted freight rates and develop a more standard, repeatable process for carrier bidding and procurement.  It implemented a “carrier bid optimization” tool that automates the development of “bid packages” for automated negotiation with carriers and evaluation of carrier bids by lane to minimize total transportation expense.  In just three months, the retailer was able to develop and solicit bids and award freight contracts, which led to an overall reduction of approximately 10% in contracted freight rates. It also used the bid process to standardize contracted accessorial and fuel surcharges.

The new tool also established a platform for easily repeating the bid and contracting process in subsequent years.

 

Samsung Uses Visibility to Improve Customer Service

 

Electronics giant Samsung implemented a logistics solution with the primary goal of improving supply chain visibility and customer responsiveness.

The company’s three focus areas for the project were interesting: (1) administrative improvements (reduce the manpower associated with existing logistics tracking and customer service); (2) logistics improvements (reduce errors, problems, and expediting), and (3) informational improvements (development of a logistics information “hub”).

The resulting system provided a platform for both end-to-end supply chain visibility and global logistics performance management. An essential capability was real-time event monitoring, and automated workflows to resolve transportation problems.

The system involved the definition of dozens of events per shipment that would be monitored in the visibility system, integrating data from many other enterprise systems.

Any reaction to this round-up of TMS use cases? Any examples to add? Let us know your thoughts at the Feedback button below.

 

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