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Focus: Transportation Management

Feature Article from Our Transportation Management Subject Area - See All

From SCDigest's On-Target E-Magazine

Aug. 18, 2011

 

Logistics News: Sears Builds Powerful Transportation Scorecard, and Shares Experiences on How to Get it Right

 

Data Organization is as Important as the Data Itself; Every Number Should be Relative to Something, Sears Says

 

SCDigest Editorial Staff

 

Most logistics organizations understand that there is a lot of information and insight trapped in their transportation management systems, but many often fail to take advantage of that potential for a variety of reasons, including lack of available IT support , limitations in their current Transportation Management Systems to build effective intelligence, tools, and limited bandwidth even within the transportation group itself to champion such a project.

SCDigest Says:

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Sears used as a key design principle the idea that "numbers should always be relative to something, not just stand alone. How does a given number compare to the plan, the previous year, the previous month. A number should always be put into context."
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The benefits of tackling such a program can be substantial, however, said Brad Fisher of Sears this week during a presentation at the Oracle Transportation Management (TM) users group meeting in Philadelphia on how Sears has built a substantial transportation scorecard over the past couple of years.

The current Sears Holdings is a combination of the major merger between Sears and Kmart in 2005, plus some other business units, such as Lands End. It is a major shipper, spending about $1 billion per year in freight costs across multiple business units.

Fisher said that to realize the potential supply chain synergies for a merged Sears-Kmart, it became clear that adoption of a new TMS would be critical. Sears ultimately picked G-Log to be its platform TMS for the entire Sears Holdings supply chain, and it started implementing the TMS in 2005, completing the project over the next several years across the complete Sears Holdings network. In late 2005, Oracle acquired G-Log, renaming the solution Oracle TM.

After that roll-out was complete in 2009, Sears turned to phase 2, which was implementation of a transportation business intelligence system from Oracle, a product called Fusion Transportation Intelligence (FTI).

The first step was to get a handle on what sort of transportation-related information users were accessing and using currently - and the results were eye opening.

"Globally, we were using almost 700 reports, generated from Access to Excel to legacy systems, you name it," Fisher said.

That ultimately led to a phase I FTI project to get a first dashboard out there, a project which took a couple of quarters. But that was almost immediately followed by a follow up effort to get feedback from users on the first release and then extend and improve the business intelligence tool.

Given the number of business units, logistics flows, system users and more, the effort has been a major one. Throughout the presentation, Fisher offered a number of lessons and insights on how to make such an effort successful. Those include:

Sears has regular steering committee" meetings for FTI where ideas are brought forth by users for improvement or new reports to be added to the system. Those ideas are evaluated for applicability, value, cost, etc., and if approved they are moved forward. After piloting the new report or other change, the steering committee again meets to approve moving the change into production.

Fisher emphasized it is critical to spend a lot of time getting the hierarchies of the reporting structure correct. Sears has a number of core logistics flows (inbound, outbound, etc., often managed separately by different SBUs or product categories, such as appliances). Sorting all that out and then how users can drill up or down is a critical part of the reporting design, Fisher said. As just an example about how companies might think about this, Fisher took the example of a tire distribution center. Individual tire DCs roll up into overall tire outbound, which rolls up to regional outbound, which rolls up to overall outbound. Getting these hierarchies right required a lot of effort, and was supplemented by outside consulting help at Sears.

Fisher said at first many users just wanted the raw data, with very few system calculations and few if any charts. Users would export the data and do their own calculations/analysis. However, users found over time that was a lot of effort, and created problems such as requiring them to scroll across huge numbers of columns on the screen. Over time, the Sears team was able to move users to have the FTI system do most of the calculations, have conditional formatting in the tables, use more charts to show the data and indicate trends, and improve the ability of users if they need to export data to export only what they need to reduce the size of the spreadsheet. But you may have to go through the more manual proces first to get there, Fisher said.

Planning for what sort of outside data a company needs to bring into the system besides data that resides in the TMS is also key, Fisher said. For Sears, that included its Planned Forecast and Targets (PFT), numbers that are basically financial plans and performance drivers that are integrated in with TMS data to allow users at all levels of the company to compare actuals to plans and targets. The system also requires some data feeds from freight forwarders used by Sears, and users sometimes must go in and make adjustments to data in the system relative to weights, cube, etc.

(Transportation Management Article Continued Below)

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Similar to the hierarchies, how users will navigate around a given report is also key for ultimate success, and should receive a lot of design attention, Fisher says. In additional to focusing on overall navigation issues, Sears has done some creative things to help users. For example, as users drilled into the data, they would often forget how they got to some detailed screen. The system tracks that for them so they can see the path that led them to a given view. The core report name itself is always displayed even as users drill down, so that if they have any issues or see a problem, it is easy to identify to IT what the baseline report is. Users can also "save filters" for a given data view so that they can just click on that filter in the future to generate that same data view, without going through all the selection steps again.

There are just some very nice things in the way the system has been designed. For example, in many views the data is organized by week for the year (Sears sets plans/targets at a weekly level), and then for each week it shows targets, current year actuals and then actuals for 2-3 years prior to that. In other views, the system uses "selectable columns," meaning that a column may show current year data, but if a user clicks on a column head, that column can be changed to show prior year data. That helps reduce the amount of cross-screen scrolling a user might have to do by limiting the number of columns even though the data is all there.

For most data, the system imports new numbers over night for the previous day, so that by 7:30 a.m. FTI has been updated with the previous day's data.

Graham Page, also on the Sears transportation BI team, noted Sears used as a key design principle the idea that "numbers should always be relative to something, not just stand alone. How does a given number compare to the plan, the previous year, the previous month. A number should always be put into context."

Another smart move was to build a series of reports specifically for the financial organization, dramatically reducing the amount of time the transportation organization had to spend pulling various data/reports to meet requests from finance for different information.

The system has a number of benefits, from improved decision-making to better visibility and control of emerging issues.

The system has helped Sears clean up its data tremendously, as users are in effect incented to make sure data in the system is correct. The hundreds of "legacy" reports used two years ago are almost all gone. Sears has extend the FTI tool to provide access to carriers, some of which are basically abandoning their own reporting to Sears because the FTI system provides all the data they used to assemble and more.

After this big success, Sears has plans for further extension to the system in the areas of activity-based costing, more "stop level" reporting, more exception reporting, and a few other areas.

There may be similar systems out there, but Sears has clearly taken transportation reporting and analysis to a whole new level.

Has your company built out a transportation intelligence system like this? We would love to hear your story too. How hard is the effort, and where do you see the payback on this kind of system? What other tips do you have? Let us know your thoughts at the Feedback button below.


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Recent Feedback

2008-10-03

 

Oct. 3, 2008

There are valid reasons for both the DC and DSD distribution models, but neither should determine the store assortment, which depends on the consumer.

The Distribution Center model makes sense when you have many prepackaged products which are continuously replenished and require little in-store servicing. With the facility justified, you can also add seasonal and holiday 'in and out' products which can share the distribution network.

The key is to manage the time supply of inventory in the warehouse and distribute it efficiently.

The Direct Store Delivery model can be implemented purely as a distribution method or also allow the manufacturer to manage some of the in-store merchandizing.

I do not see any advantage of using DSD simply to deliver merchandise. Although it may help the 'mom and pops' that are on the same route as a large retailer, the DSD model must be more expensive. Once the big drops are removed, it will become more costly to reach the independent retailers but the larger retailer must benefit.

If DSD is used to support in-store merchandising, then you have a different story. The manufacturer's representative can give their products the individual attention that increases their sales. The bad thing is that they can also load up the store with inventory if no one is watching.

Bill Bittner
President
BWH Consulting


 

 
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