Subscribe to our free, weekly email newsletter!


Transportation Best Practices: Sargento’s finely-aged TMS upgrade

By setting reasonable goals, the converter and packager of cheese products upgraded its antiquated TMS, reduced its LTL shipments by nearly 30 percent, and brought its carrier relations into the 21st century.
By John D. Schulz, Contributing Editor
July 01, 2011

Bottom line benefits
In shipping nearly 24 million pounds of Sargento products every month, the company has enjoyed what it says is a substantial reduction in administrative costs through the automated freight payment function of their new TMS. The logistics organization has improved its allocation of cost, and, in a major operational benefit, it has seen a 15 percent drop in the cost per pound of their shipments—excluding the cost of fuel.

Much of that has occurred by converting more costly LTL moves into full TL shipments. In fact, Sargento’s percentage of LTL shipments has dropped by nearly a 30 percent, according to Hartlaub.

“The opportunity for a company like Sargento to build TL moves should be second nature to an organization, but sometimes it’s hard to see the forest for the trees,” says Gene Nusekabel, transportation and logistics industry marketing manager for Sterling Commerce, Sargento’s TMS provider. “TMS is only as good as the planning you can do.”

With calls for a capacity crunch coming in trucking due to tougher new rules to crack down on unsafe drivers, Nusekabel says the real winners among shippers will be those with ability to access capacity during peak periods. “With capacity what it is, companies need their transportation arm to get out there as soon as possible to lock in equipment,” he says. “Planning is a commitment, and the real leaders in transportation planning need to be thinking about that. You can have a great supply chain, but it’s only going to be as great as your transportation carriers. If you don’t have capacity, you don’t have anything.”

Road ahead
Sargento is currently working on incorporating the movement of inbound freight into its TMS. According to Hartlaub, appointments and dock scheduling will begin later this year.

“At first, the initial reaction among our carriers was one of trepidation,” says Hartlaub. “Some of them were not computer savvy, but now they have to monitor e-mail and the Web. For a lot of carriers that was new stuff, but they’ve grown and evolved.”

Throughout the process, Hartlaub says he is proud that none of his 30 or so trucking partners has changed. But what has changed is the efficiency of his carrier network. “Things have gotten better and better…now it’s seamless,” he says of his carrier relations. “They like the way we interact with them.”

Nusekabel says the future is bright from the TMS provider side as well. He says fully automated TMS systems are only in use in 30 percent to 40 percent of logistics operations. “That indicates to us there is still a huge opportunity out there,” he says. Larger companies seem more willing to make the commitment of automating their systems, but the payback can be just as large on a percentage basis for smaller companies, he adds.

Hartlaub’s advice for shippers considering making the jump to an automated TMS system is simple: Do your homework; do the necessary advance planning; get support of upper management; and understand what you want it to accomplish.

“Shippers need to have a clear understanding of how their operation functions as well as the attributes of the systems they’re considering,” adds Hartlaub. “There are systems with more robust options, but you may not need them. We’re not a $200 billion transportation company, but we got what we needed.”

About the Author

image
John D. Schulz
Contributing Editor

John D. Schulz has been a transportation journalist for more than 20 years, specializing in the trucking industry. He is known to own the fattest Rolodex in the business, and is on a first-name basis with scores of top-level trucking executives who are able to give shippers their latest insights on the industry on a regular basis. This wise Washington owl has performed and produced at some of the highest levels of journalism in his 40-year career, mostly as a Washington newsman.


Subscribe to Logistics Management magazine

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your
entire logistics operation.
Start your FREE subscription today!

Recent Entries

FTR says both spot rates and contract rates are heading up in a full capacity environment and with the fall shipping season rapidly approaching, it explained conditions for shippers could further deteriorate.

Read how others are using Business Process Management to achieve ERP success with Microsoft Dynamics AX. Download the free white paper now.

Now that Congress has issued another highway funding Band-Aid – a $10.9 billion highway bill through next May that former Transportation Secretary Ray LaHood blasted as “totally inadequate” – what can we expect as the infamously do-nothing 113th Congress winds down in the next month before taking yet another recess to prep for the mid-term elections?

Seasonally-adjusted (SA) for-hire truck tonnage in July headed up 1.3 percent on the heels of a 0.8 percent increase in June. The ATA’s not seasonally-adjusted (NSA) index, which represents the change in tonnage actually hauled by fleets before any seasonal adjustment, was 133.3 in July, which outpaced June’s 132.3 by 0.8 percent, and was up 2.8 percent annually.

Volumes for the month of July at the Port of Long Beach (POLB) and the Port of Los Angeles (POLA) were mixed, according to data recently issued by the ports. Unlike May and June, which saw higher than usual seasonal volumes, due to the West Coast port labor situation, July was down as retailers had completed filling inventories for back-to-school shopping.

Comments

Post a comment
Commenting is not available in this channel entry.