Beverage

Reduced Freight Costs Through Transportation Consolidation and WebSettle® Self-Invoicing Exp

With this many carriers and this many loads, automated, self invoicing saves more than just a sip. Just ask the nation’s second largest bottler of soft drinks. This leading bottler operates 17 soft drink and water bottling plants and 103 private and third-party warehouses in 12 states. In addition to its flagship beverages, the company also distributes complementary soft drinks, iced teas, fruit drinks, tonic water, ginger ale, and bottled water in 19 US states. The logistics group within the company consists of 16 different group managers and one LeanLogistics system administrator. Monthly, on average, 50 carriers (a combination of private fleet, common carriers and dedicated carriers) move 10,000 loads; 99% of its volume is full truckload.

Business Process and Problem Definition 

The company knew its disparate transportation networks prevented leveraging its large shipment volumes and annual transportation spend. Its business had grown with each plant servicing its own warehouses, but now plants that produced specialty beverages ship across networks. A key requirement was the capability to identify round trip or continuous move opportunities between inbound and outbound freight, thus improving carrier efficiency and reducing costs. They wanted a common platform for all locations to manage carrier rates and contracts and as a means to track carrier performance. In addition, they wanted an on-line communication tool for tendering, settlement, and accessorial and rate change management to replace the labor-intensive phone and fax communication with carriers. Automation of appointment scheduling was also a requirement. Each plant used a separate, manual process for freight audit and payment.  This process could take up to a month before an invoice was sent to the centralized accounts payable department where five full-time employees performed manual data-entry and administration. A company-wide study documented that it was costing the company up to 28 dollars per invoice to pay freight bills. This cost for 90,000 invoices per year represented a significant line item in the budget.

“Once the extent of the problem was obvious, it was a ‘no-brainer’ to adopt an automated audit and pay solution,” said the Corporate Transportation Manager.

Process Improvement – SaaS Solution

The company made managing carrier relationships and forming strong partnerships a key business initiative. The company utilizes LeanLogistics LeanTMS® to centralize command and control, coordinating shipments across 17 independent business units to maximize equipment use and minimize costs. LeanTMS provides a common system for on-line shipment and load change procedures, carrier rate management, carrier communication, and on-line appointment scheduling. The system manages inbound freight and plans round-trip continuous moves between facilities, thus further reducing freight costs. The historical database of accessorials is key financial management information. Supply Chain Monitor provides visibility of order and load status to all interested parties. WebSettle® electronic freight settlement capabilities actualizes paperless self-invoicing and settlement, resulting in rapid and correct carrier payment. The system maintains the rates and terms of the carrier contracts in its database. Before a shipment is tendered, LeanTMS calculates an “audit-quality” rate. When a shipment is complete and delivery confirmed, the payment process begins. WebSettle verifies the amount due to the carrier (adjusting fuel surcharges, etc.) and automatically schedules payment – without the carrier having to submit an invoice. If unanticipated accessorials occur, carriers can still request reimbursement ). As freight bills are authorized for payment (largely automatically), they are batched by WebSettle and forwarded through a system interface to accounts payable. Payment is complete and accurate the first time, without unnecessary paperwork, audits, or due bills. The carrier is willing to relinquish invoicing in exchange for faster payment –  about one-fourth of the time. With this on-demand solution, the company deployed the system and started seeing benefits in just 30 days.

Value Delivered

The most significant benefit is to the accounts payable department, which now has a greatly-reduced involvement in the freight payment process. Automating the freight payment process reduced the personnel requirement in accounts payable from five full-time employees to one person for three hours per week and virtually eliminated plant-level review of invoices. By using the functionality of LeanTMS, the company centralized command and control of carrier procurement, planning, and settlement. It has also achieved network-wide transportation visibility for all stakeholders. The company has reduced its annual transportation spend by 8% consistently over a multi-year period.