1. Dean Foods streamlines transportation operations - Hayword, CA - A leading dairy company in the U.S. and a global leader in soy products.
About two years ago, Dallas-based Dean Foods sought a technological solution to help streamline its transportation operation that includes extensive freight flows of dairy ingredients, dry van shipments and food-grade tankers. The company approached Dairy.com, a provider of supply chain solutions to the dairy industry with cost-effective, online applications that address the dairy industry’s highest spend categories: bulk commodities and transportation.
Dean Foods worked with Dairy.com to find solutions to its four major objectives: to minimize transportation costs while maintaining current levels of service; to rationalize and minimize fuel surcharges; to improve the efficiencies and transparency of its freight management processes for spot and contract freight; and to reduce embedded transportation costs for ingredients purchased on a delivered basis.
With Dean Foods’ input, Dairy.com developed an approach to revitalize transportation procurement and management processes, reports Bruce Matson, director of dairy procurement for Dean Foods. This approach included utilizing Dairy.com’s large membership of food-grade tanker carriers, re-bidding freight lanes strategically and leveraging advanced Internet-based supply chain management technologies.
To achieve competitive bidding of its freight lanes, Dean Foods used Dairy.com’s Strategic Transportation Service. This required that the two companies complete a review of Dean Foods’ current freight lanes, contracts and fuel surcharges. Then, utilizing Dairy.com’s database of historical freight costs, the two developed a prioritized set of opportunities from which they developed a multi-wave re-bidding plan encompassing over 1,000 freight lanes across Dean Foods’ 108 plants.
Once Dairy.com completes bid packages, it sends them to its carrier membership, including about 250 food-grade tanker haulers and dry van carriers. Dean Foods then receives from Dairy.com compiled bid responses and recommendations for action. The two companies collaborate on final carrier negotiations and Dean Foods makes the award decisions.
At this point, Dairy.com’s online collaborative scheduling application takes over the process, setting up the resulting freight contacts. Using this application, Dean Foods is able to make decisions concerning where to move product each week, reflecting these moves in its schedule. The solution automatically identifies the contract hauler or haulers for each lane, instantly tendering loads to haulers via email. Haulers then accept their loads online and Dean Foods’ schedule is instantly updated. This process reduces time associated with freight scheduling. If schedule changes need to be made by any party, the scheduler, the sell plant, the buy plant, and the carrier are all notified and updated automatically.
To expedite remaining non-contract moves, Dean Foods chose to leverage Dairy.com’s spot transportation exchange where shippers and haulers can post their needs and availability. Using this application, Dean Foods can flip loads from its schedule to the spot transportation exchange, which instantly notifies Dairy.com’s full hauler community via email and the Internet. Haulers then bid in real-time and Dean Foods receives the bids instantly, accepting the bids or negotiating further, all via the Internet. This central exchange helps both parties in establishing a fair market price. The exchange operates in real-time so traders can find the best deals within the time constraints of these short-shelf-life commodities.
For ingredients purchased on a delivered basis, Dean Foods directed Dairy.com to work with its suppliers to determine the freight cost component within its purchases. Dairy.com competitively bids these lanes to its hauler base to drive down costs.