CASE IN POINT: ROCK-TENN CO.
Saving Millions In Transportation Costs
Rock-Tenn Co. is a leading manufacturer of packaging products, bleached and 100-percent recycled paperboard and merchandising displays. The company operates 92 facilities in 26 states, Canada, Mexico, Chile and Argentina.
When it came time for the company to choose an on-demand TMS, Ben Cubitt, vice president of supply chain for the Norcross, GA-based company, says it was a choice from among three options: a bundled ERP system, a Tier 1 traditional TMS or an on-demand TMS. It decided to deploy the Transplace solution and went live in July 2007.
Cubitt was looking for the all the benefits cited by vendors and users alike including functionality, lower upfront cost, fast implementation and quick time to value. "Since we have grown through acquisition, we operate different systems and platforms. We found that on-demand TMS is especially well suited for this. Also, our IT groups were very comfortable with the solution."
Particularly attractive to Cubitt are the carrier connectivity and information visibility. "It was very important to us to be able to connect with carriers-even those who don't have a full EDI connection. They can still fully access the Transplace system and provide us updates via the carrier websphere and we can go all the way to full EDI connections with those folks. That quick connectivity with our carriers was critical to us. It allows us to begin transacting electronically, getting tender track-and-trace reporting within a quick and efficient time frame."
Currently, about half the company's sites are connected and the company plans to roll out the solution in every division and every site over the next year. Currently, Rock-Tenn uses the TMS for outbound TL and LTL shipments from its paper mills to either their own converting plants or to other converting plants. "We are a large supplier to food companies like DelMonte, Nestles and P&G. Half the boxes in your kitchen pantry are made by us," notes Cubitt.
Transportation savings on its $200 million transportation spend were a big factor in the company's final choice. "There were two reasons for choosing Transplace," explains Cubitt. First the company wanted to achieve new savings they were unable to achieve without TMS-such as carrier optimization and mode optimization. The second reason was to protect savings they had already achieved. "I think that, over time, it would have been very difficult to maintain savings without TMS."
One area of savings Cubitt anticipated was in network synergies and optimization.
"We are really starting to see this and this is where Transplace and people in the load control center are seeing efficiencies. That is when a carrier has a load from a paper mill into our folding carton plant and they can prepare an outbound load. This means we achieve increases in our savings, increases in our partnerships with our carriers and all this while reducing deadhead miles, which leads to sustainable environmental savings."
Customer service has also increased, with improvements in on-time pickups and deliveries. "It also helps us monitor the status of an order, so if an order is delayed, we know that in advance. Now that carriers know all of this is being tracked and reported, it helped us weed out low-performing carriers. Overall, our carriers are performing at a higher level."
The ability to expedite hot loads is another value-add to customer service. "If a customer gives us a hot load, or changes an order, it could be a problem. Say it's a Friday afternoon before month's end and there is just no capacity. Or say we can't find a truck to handle the hot load. Well, Transplace can find it for us because they see all the moves and they can see when there is a truck coming from one of our mills that we can link up with to serve the hot load. We might not have been able to do that without our TMS."
On the customer pickup side of the operation, Rock-Tenn can find capacity from its core carriers should a customer not be able to find capacity to pick up a load. Cubitt notes Transplace's Freight Allocation Module is ideal for handling hot loads or new lanes. The module sends out an alert to the carriers in the core program.
"So instead of having to call several carriers, that alert goes out to about 100 carriers at once. That mass tender can quickly identify who has trucks where and when you need them, which is a tremendous time-saver and cost-saver."
Cubitt reports quick carrier adoption of on-demand TMS over traditional TMS. "The collaborative aspect of on-demand TMS will be the next big frontier. We are taking empty miles out of our network now. The next question is how do we collaborate with our customers; TMS really gives us the ability to start looking at collaboration so we can have our customer base and our supplier base play in this world." -A.T.