leveraging otm to drive technological and operational ......carriers, shipping and customer service...

Copyright © 2010 Niagara Bottling, LLC. All rights reserved.

Leveraging OTM to Drive Technological and

Operational Improvements

Ryan KieczykowskiRavi Kutty

8/16/2011


Agenda

• Niagara Overview

– Who We are What We Do

• The Perfect Supply Chain Storm

– Reasons driving the need for change

• Operational Improvements

– Changes in Operation

– Improvements

• Technological Improvements

– Changes in Technology

– Improvements

• Next Steps

• Questions


Largest U.S. Private Label Bottled Water Supplier

Vertically Integrated

Revolutionary Innovation

Commitment to Environmental Sustainability

Unmatched Quality

Customer First Attitude


Niagara’s Customer Partners


Niagara Plant Locations


Niagara’s Aggressive Growth Rate

35,999 48,297

63,551

-

10,000

20,000

30,000

40,000

50,000

60,000

70,000

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

2009 2010 2011

Total Shipments by Quarter

Total Shipments

32%

5 Year CAGR

• Oversold production capacity in 2011 • JIT Manufacturing •Heavy use of 3PLs

• Short lead time/rush orders/promos from customers • Constant Shipment Changes

Dynamic Supply Chain:


Old Department Structure

Check carrier capacity by e-mail and phone calls

Get rates and create them in OTM on the fly

Select and assign carriers to orders and

lanes

Create shipments in

small batchers based on

carrier responses

Cover Spot Market Freight by e-mail and phone calls

Provide support for

carriers, shipping and

customer service

Niagara Plant 1 Niagara Plant 2


This Structure Is Not Scalable!


Get rates and create

them in OTM

Select and assign

carriers to orders and

lanesCreate shipments in


carrier responses

Cover Spot Market

Freight by e-mail and

phone calls

Provide support for


customer service

Plant 7 Plant 8



them in OTM

Select and assign




carrier responses

Cover Spot Market


phone calls

Provide support for


customer service

Plant 1 Plant 2



them in OTM

Select and assign




carrier responses

Cover Spot Market


phone calls

Provide support for


customer service

Plant 5 Plant 6



them in OTM

Select and assign




carrier responses

Cover Spot Market


phone calls

Provide support for


customer service

Plant 3 Plant 3


Rapidly Growing Transportation Network

• 125 Active Carriers •58,000 active rate records • 6,216 shipping lanes

• 200,000 truckloads annually • 40% average truckload volume annual growth rate !!

Transportation Profile:


Dispatcher Decision Making

Carrier A

Carrier C Carrier D

Carrier B

Seymour, IN Chariton, IA Winchester, KY

Carrier A $350 $599 $550

Carrier B $510 $674 $580

Carrier C $400 $900 $620

Carrier D $504 $924 $917


Decrease in U.S. Truckload Capacity


Carrier Communication Challenges

• Load information exchange was very time consuming

• Limit on shipment volume with carriers due to slow processes

• A/P department unable to keep pace with manual carrier invoicing

• Made Niagara a less attractive shipper to carriers


The Perfect Supply Chain Storm!


It Was Time to Evolve…


What We Changed…

Factors Driving Change:

1) Aggressive Growth Rate and Dynamic Supply Chain

2) Rapid increase in Transportation Profile

3) Reduction in Carrier Capacity

Areas Targeted for Improvement:

1) Operational Department Structure

2) Transportation Planning Process

3) Carrier Communication


Old Department Structure


Get rates and create them in OTM on the fly

Select and assign carriers to orders and

lanes

Create shipments in


carrier responses

Cover Spot Market Freight by e-mail and phone calls

Provide support for


customer service

Niagara Plant 1 Niagara Plant 2


Carrier Capacity

Limits

Published rates for

primary and back-up carriers

Auto-assignment

of contracted

freight

Retendering enabled to search for available carriers

BULK PLANNING NOW HANDLES ALL OF THIS!

SPOT MARKET SUPPORT

New Structure

Carrier selection process


Transportation Planning Process

• Contracted Types

a) Exclusive

b) Non-Exclusive

• Non-contracted

a) Published Rates

b) Spot Market

• About 50% of all loads are auto-assigned during the bulk plan due to contractual obligations

• Load planners are no longer involved in the manual assignment of contracted freight

NON-CONTRACED

51%

CONTRACTED49%

Percentage of Freight Shipped with Contracted Carriers


Dispatcher Decision Making

Carrier A

Carrier C Carrier D

Carrier B

Seymour, IN Chariton, IA Winchester, KY

Carrier A $350 $599 $550

Carrier B $510 $674 $580

Carrier C $400 $900 $620

Carrier D $504 $924 $917


Bulk Planning Chooses the Optimal Allocation

$1,830 Seymour, IN Chariton, IA Winchester, KY

Carrier A $350 $599 $550

Carrier B $510 $674 $580

Carrier C $400 $900 $620

Carrier D $504 $924 $917


Carrier A $350 $599 $550

Carrier B $510 $674 $580

Carrier C $400 $900 $620

Carrier D $504 $924 $917


Carrier A $350 $599 $550

Carrier B $510 $674 $580

Carrier C $400 $900 $620

Carrier D $504 $924 $917



Automation of Contracted Freight:

• Exclusive Contracts:

- Carriers obligated to haul 100% to the volume

- Rate offerings auto-constrained on orders via automation agents and then planned during the bulk plan



Automation of Contracted Freight:

• Non-Exclusive Contracts:

- Carriers obligated to haul a specified number of loads per day of the week or percentage of overall volume

- Commitment Counts and Allocations created to manage this during the bulk plan



Capacity Management

- Capacity Management allows us to create and load carrier capacity by lane and by day of the week

- Allows us to create capacity limits on what will be tendered to a carrier during the bulk plan and Retendering process

- *** Especially beneficial in tight truck capacity markets***



Spot Bid Tendering:

- Allows us to send out a tender offer to a select group of carriers with a starting price (anchor)

- The carriers can bid on the load similar to e-bay style auction and at the end of the time limit the lowest bidder wins the load

- Incorporates benchmarking (market) prices as starting price



Spot Bid Tendering:

- Reduction of manual steps (phone calls and e-mails)

- Creates competitive environment with simultaneous bidding instead of sequential

- Helps control cost and include more carriers in process (unbiased)

- Provides visibility to spot market lanes and pricing for analysis


Impact on Spot Market freight


Average Loads Planned Per Hour


Average Labor Dollar Per Hour


Speed to Market

OTM Scheduled Tendered Pick up

01020304050607080

3 4 5 6 7

2011

01020304050607080

3 4 5 6 7

2011


Speed to Market

0

10

20

30

40

50

60

70

80

3 4 5 6 7

2011

EBS to Schedule



Speed to Market

0

10

20

30

40

50

60

70

80

3 4 5 6 7

2011

Scheduled to Tendered



Speed to Market



Carrier Communication

via email/portal

Shipment Tendered

to Specific Carrier

Secure Resources

Shipment Created

(in OTM)

Shipment

Accepted/Decline

(in OTM)

Shipment Tracked (Picked Up/Delivered

Status)

Shipment Invoice(Carrier Invoice)

via portal

Shipment

Accepted/Declined

by Carrier

Carrier Accepts

via email/portal

Shipment Status is

updated for every

stop

Shipment Tracked

via hard copy

Shipment Invoice is

Sent

Shipment Invoice

Created

Declined Loads Get Retendered

Out of the Box Process:



• Tendering:

– Manual Entry from Email

– Mistakes in number entries –PO#, Shipment Ids

• Response:

– Response is updated via Portal or email

– Declined loads need to be manually reassigned

• Shipment Status:

– Portal update for multiple shipments is time consuming

– Validation of time entry is hard via portal

• Shipment Invoices:

– Paper invoices requires a lot of Manual involvement

– Validation checks and approval is done manually

Disadvantages:



via EDI 204

Carrier Receives

Load in their

System

Secure Resources

Shipment Created

(in OTM)

Shipment

Accepted/Decline

(in OTM)

Shipment Tracked (Picked Up/Delivered

Status)

Shipment Invoice(Carrier Invoice)

via EDI 990

Carrier

Accepts/Declines in

their system

Carrier Declines

via EDI 214

Shipment Status is

updated for every

stop

Shipment Tracked

via EDI 210

Shipment Invoice is

Sent

Shipment Invoice

Created

Declined Loads Get Retendered

New Process



• New Tendering:

– Flows through to the Carrier’s system

– No typing errors

• New Response:

– Responses flows through from Carriers system and updates OTM

– Retendering can be handled systematically

• New Shipment Status:

– Portal update for multiple shipments is time consuming

– Validation of time entry is hard via portal

• New Shipment Invoices:

– Validation checks and approval is done automatically

– User needs to look into exception

Advantages


EDI Flow Overview

EDI 204/ Tendering Process

Secure Resources

External System/Web

ServiceBPEL/SOA

Sent via EDI – Gentran

Carrier system is updated

Outbound to Carriers

EDI 990/ Responses from Carrier

Carrier System is updated

Reaches Niagara via

EDI –Gentran

BPEL/SOA

OTM External

System/Web Service

Shipment updated in

OTM

EDI 214/ Shipment

Status

Carrier updates

Shipment

Reaches Niagara via

EDI –Gentran

BPEL/SOA

OTM External

System/Web Service

Shipment updated in

OTM

EDI 210/ Shipment Invoices

Carrier Invoice

Created and sent

Reaches Niagara via

EDI –Gentran

BPEL/SOA

OTM External

System/Web Service

Invoice is created in

OTM

Inbound to Niagara


EDI 210 - Freight Invoice Process

Carrier Sends

Invoice via EDI

EDI object Translated -

Gentran

BPEL SOA Object

OTM Invoice Created


EDI 210 - Freight Invoice Process

Invoice

Created

Invoice Matched

to Shipment

Invoice Auto

Approved

Voucher Sent

to EBS

Match FailedInvoice

Duplicate

Auto Approval

FailedRequires Manual

Handling

Flows Through


EDI 210 Status Update

Overall Edi InformationInvoices % EDI # EDI % Auto EDI % Auto (overall) # Auto % Exception (EDI) # Exception Paper Invoices

March 15729 12.2% 1922 4.4% 0.5% 85 7.8% 150 13807

April 18480 16.4% 3029 6.1% 1.0% 186 6.9% 210 15451

May 18832 18.5% 3490 10.1% 1.9% 351 7.2% 252 15342

June 27098 28.8% 7793 37.2% 10.7% 2898 7.3% 570 19305

July 26215 43.7% 11445 47.8% 20.9% 5468 9.5% 1086 14770

August 8030 54.8% 4398 63.3% 34.7% 2785 6.0% 265 3632

YTD 138300 22.5% 31148 37.8% 8.5% 11780 5.8% 1822 107152

Y/E GOAL 85.0% 80.0% 68.0% 5.0%

0

5000

10000

15000

20000

25000

30000

March April May June July

Paper

Created

Exception

Auto Approved

Advantages:

- Approx 50% invoices are not touched

-Users become Exception Handlers

-Less Data Entry

-More reporting and time spent on validation


Next Steps…

• Carrier Pickup Appointment scheduling via OTM Web Portal

• Increasing efficiency of shipment change process

• Migration from 5.5 to 6.2


Questions?

[email protected]

[email protected]
mailto:[email protected]:[email protected]

leveraging otm to drive technological and operational ......carriers, shipping and customer service...

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