Eliminating Inefficiencies

Details

CJ Logistics partnered with a leading food customer to improve their transportation management model, moving from a decentralized model with three locations that tendered transportation autonomously to a centralized model leveraging an optimized freight spend, one industry-leading system and streamlined processes and communications. The result: transportation cost reduction of 15%–20%, efficiency improvements of 15%, and performance that exceeded on-time shipping and delivery goals.

Situation

One of CJ Logistics’ Fortune 500 Food customers used a decentralized model for the management of their transportation. At each of their three warehouses, one on-site person managed transportation as an individual transportation operation, negotiating carrier rates and developing carrier relationships independently at each location; communication between the three locations was minimal. The disjointed overall transportation network meant that costs were not optimized because they were not leveraging their total network spend. The use of paper-based, manual processes resulted in process inconsistencies and productivity inefficiencies, translating to additional cost.

Solution

CJ Logistics’ transportation management solution included a centralized model and an automated system. Gathering all of the information from the three transportation operations, we integrated their business into our Transportation Management System (TMS) using a phased approach for each site. We proactively addressed the inherent challenges of moving from an in-house model to an outsourced model, getting alignment on the reporting our customer wanted, and designing reports accordingly. Inviting 100 of our customer’s co-packers to attend training, we walked them through processes and discussed changes. Our jointly designed communication plan included regularly scheduled meetings to review issues, current promotions, any changes to the business and forecasts.

A dedicated Customer Service Representative (CSR) served as their single point of contact for all questions and requests, providing greater ease in accessing information. Leveraging our preexisting total transportation spend with partner carriers enabled us to negotiate better rates across the customer’s holistic transportation network.

A customer portal to the TMS to provide 24/7 real-time visibility to all of the customer’s transportation information reduced the time spent accessing their data and provided improved access to information. Our partnership with our customer helped facilitate communication with their co-packers and consignees. Centralizing management of their transportation and using our scalable processes, we brought process consistency to their transportation business.

Result

CJ Logistics’ collaborative approach, customized solutions and consistent processes based on leading practices created improvements in our customer’s transportation business. Transportation rates were reduced on average by 15%-20%. Service levels were improved, exceeding the 98% On Time Shipping goal across all three sites, and achieving 97% On Time Delivery to Appointment, exceeding the goal of 95%. Transportation activities were simplified, achieving an overall increase in efficiency of 15% by having a dedicated CSR and providing 24/7 real-time visibility to the customer’s transportation information.