case study LEARN HOW TLS USED AN INTEGRATED APPROACH SAVING COMPANY ANNUAL NET COST SAVINGS OF OVER 13% AS WELL AS INTRODUCING BENE
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Carrier Selection
Challenges
Pricing Agreements Bill Payment & Audit Move to Paperless
Client A NJ based major lighting fixture manufacturer needed to reduce transportation costs, establish manageable audit procedure & eliminate ineffciencies
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Client Challenges
Solutions
The Problems... A major lighting manufacturer of lighting fixtures needed to reduce transportation costs, establish a manageable procedure for auditing freight bills and wished to eliminate the waste and inefficiency of paper invoices.
Carrier Negotiations & Analysis: We conducted a complete analysis, established benchmark pricing, developed a detailed RFP (Request for Proposal) to include; business rules, carrier compliance standards, sample shipments, estimated volumes/revenues by region/state, description of FAK applications, tariff specifications and general mandates.
The company utilized several common LTL carriers to ship to retailers located throughout the U.S. They grouped their freight into a single classification, at the carrier’s respective rate base ( rather than a common rate base, such as CZARLite®). Transportation represented a growing portion of total cost of goods sold, and a drain on margins. Furthermore, the company lacked a formal audit process to ensure accuracy of freight invoices. They simply spot-checked paper invoices received from various carriers, and in absence of anything “unusual”,they just paid the bills. Virtually no automation was in place.
Bill Payment & Audit: The accounting department didn’t have the time or resources to go to each carriers website and check the invoice against the carriers rating module, apply discounts, accessorials, etc., so they just used a percentage of the sales revenue to validate for payment. Basically anything close got paid… Freight Accrual:
My client would determine the monthly estimated freight expenditure using a percentage of the total sales revenue. "sometimes they were even close"
Routing Optimization: Our team loaded into the system the newly contracted rates (now all based on the same tariff), and established EDI with each carrier to automate the tracking, invoice audit and approval processes. We then created a system to automatically produce quotes and book shipments, custom-integrated with data housed within the manufacturer’s WMS (Warehouse Management System). Every day the system receives a file of outstanding orders, compares carrier contract rates, evaluates all carrier options, costs, and transit times, and ultimattely identtifes the optimal carrier for each move. Track & Trace: BOL (Bill of Lading) data is sent to our system which handles all the tracking and tracing by providing a single web-based portal, with which to view shipment status information on all of its LTL shipments. Carrier Audit & Billing: Our system receives and matches electronic invoices via EDI from each carrier and audits against the original estimated cost, flagging all invoices that are out of a company-defined tolerance (as well as identifing BOL/Invoice discrepancies), and provides online review and approval. Our system then transmits approved invoice data to the company’s financial system to process payment to the carriers. The company then transmits remittance advice back to the system, All allowing complete visibility through the life cycle of each LTL shipment - from dispatch to remittance.
The Logistics Source, Inc. The Po w e r o f R e l at i o ns h i p s
Results Our client has achieved an annual net savings of over 13% on freight costs. They have also significantly benefited from the greater efficiency of a streamlined and paperless organization. Call us at 1-877-Ship TLS (877-744-7857) tto disscuss your savings.
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