It is safe to say that logistics can be extremely complicated for companies dealing with shipments to multiple destinations around the world. Most days, I receive calls from various IT companies offering the “perfect solution to my logistics challenges,” further stating that with innovative IT solutions, our company could save millions. Of course there’s always hope that a “one solution fixes all” application will appear, but in most cases, it takes proactive due diligence to uncover the real opportunities for logistics solutions.
Personally having been in logistics for 31 years, I tell my team that my first computer was a #2 pencil and a blank piece of paper – at that time, those tools were all we needed to brainstorm some good solutions. Now days, we live in a world saturated with information overload and big data. Therefore, it is extremely difficult, as well as competitive, to come up with solutions unless, of course, there is a fundamental understanding of the logistical dynamics that exist within any given company. However, I do envision an all-encompassing solution; that of collaboration. This “one” solution can open up doors to new methods, processes, ideas and resources that can be utilized into best practices for any given logistical effort – which is precisely why we began our global logistics program in 2005.
“An all-encompassing solution can open up doors to new methods, processes, ideas and resources that can be utilized into best practices for any given logistical effort”
During the initial launch of our global logistics program, we had very little data regarding the exact locations where we shipped and the amount of money we spent per mode. What we did know is that we spent too much money, had numerous ERP systems and a multitude of carriers. The primary challenge posed to us was: "How do we get our arms around this?” There is not one single IT solution that would fit our needs. Simply put, we had over 1000 carriers and over 200 shipping locations.
In essence, we knew that more than 1000 of our carriers covered items such as courier, local pick-up and delivery, full truck loads, domestic and international air, as well as ocean shipments to and from approximately 57 countries around the globe.
The issue was capturing our spend because we failed to note if shipments were going inbound or outbound. In order to find a solution, we began with a “human TMS” which was conducted through the utilization of a third party logistics provider that would work with our sites on routing, rating and capturing data. We then utilized a freight payment company for all our bills paid in the U.S., which made up 45 percent of our business. We continued to rationalize our supply base and take our international carriers from 249 in 2006 to four in 2014. This helped us set the bar for the data we required from these four carriers, which was much easier to manage and set necessary standards on an as needed basis. We created a similar standard with our small pack carriers and trucking companies. Due to these tweaks, we now have the ability to collect necessary data in order to begin creating our own IT solutions by channeling through our freight payment house.
Through our collaborative effort, we built a web-based domestic and international freight rating tool. This allowed us to systematically capture our global data which gave way to building a dashboard, allowing each of our global sites to see what, where and with whom they spent their shipping budget. We were then able to cascade this data to individual business units.
Although it has taken us a little over eight years to get this IT solution implemented, the end result proved that this “home built” solution was exactly what was needed to sustain our logistics needs and meets our customers’ requirements. Our logistics team continues to collaborate on an ongoing basis in order to find improved ways to progress and enhance our global logistics program.