Managing today’s transportation department can be challenging. Many companies do not have a system in place to oversee shipments as efficiently and cost-effectively as possible. They’re riddled with uncertainties, wondering if they are missing out on hidden cost-saving opportunities.
Food Logistics talked to three food manufacturers who chose an on-demand Transportation Management System (TMS) solution to help them manage and control their transportation costs. Each uses a different on-demand TMS vendor.
We discover their reasons for choosing the systems they did, examine their initial goals and examine the subsequent benefits their systems are delivering.
JEL SERT AUTOMATES, CONSOLIDATES
The only way Jel Sert knew it had an incoming order was from the noise of the printer printing the order, says Michael Martinez, director of distribution for The Jel Sert Co. based in West Chicago, IL. “We were totally manual-based. We simply tore the order from the printer, handed it to a carrier, placed the order in the accomplished file, and then moved on to the next order.”
The company began to search for a TMS solution about three years ago. The high-volume shipper ships about 80 percent of its annual volume of 20,000 orders April through July. “So we were really struggling and we needed to find a system that would automate this process for us,” Martinez says. The second goal was to capture opportunities to reduce its freight costs significantly by consolidating shipments.
Martinez chose On-Demand TMS provided by Holland, MI-based LeanLogistics Inc.
“I will admit our worst-case scenario was that we would automate our system even if our freight costs remained the same. Well, the salesman was right and we achieved double-digit percentage savings in our freight costs two years running and ROI was under a year,” says Martinez. “This is critical, especially in this economic environment when capital funds are slow to come by and many companies are not investing. This was definitely a solid investment for us.”
The TMS solution provides a range of functionality such as real-time financial metrics and visibility, helping executives make smarter decisions. The WebSettle module audits and pays invoices to carriers, eliminating the need for the third party Jel Sert had used. “We are paying our carriers quicker now at a lower cost, while removing the error factor we sometimes had with our third-party company,” reports Martinez.
The automated communication between Jel Sert and its carriers, through real-time exception alerts called Advisors, triggers an email alert to Jel Sert advising when something happens—such as a delayed load. The system also is carrier-friendly, as about three-quarters of Jel Sert’s network of 80 carriers were already using this TMS solution. “We have real-time reporting functionality that lets us monitor if we are following our core carrier philosophy of giving the bulk of our volume to about 15 carriers,” Martinez says.
Even with double-digit growth Jel Sert is experiencing, it has not had to increase personnel. “Lean’s TMS solution allows us to be more efficient in our transactions, even with the same head count,” Martinez reports.
The TMS interfaces with Jel Sert’s ERP and WMS solutions. “What attracted us to Lean is their strength in IT and their understanding of interfaces,” explains Martinez. “We can share real-time information with our other two systems, and the real-time communication really helps in proactive decision-making.”
PARIS FOODS CENTRALIZES CONTROL
C.O. Johnson felt his company had a good handle on its core group of carriers who delivered on-time shipments and quality both in service and equipment.
“But I didn’t feel we were getting the best rates we knew were out there because our old system was lacking efficiencies as it was not centrally controlled,” says Johnson, president of Paris Foods Corp., which is headquartered in Trappe, MD.