Construction equipment firm masters transportation management with Sterling Commerce solution
For manufacturers, managing transportation costs is a constant juggling act. The challenge is identifying and implementing cost-savings techniques without hindering customer service. Given a choice, supply chain managers usually will expedite shipments for a valued customer, says Patrick Connaughton, senior analyst, sourcing and vendor management, at Forrester Research, Cambridge, Mass.
For manufacturers, managing transportation costs is a constant juggling act. The challenge is identifying and implementing cost-savings techniques without hindering customer service.
Given a choice, supply chain managers usually will expedite shipments for a valued customer, says Patrick Connaughton, senior analyst, sourcing and vendor management, at Forrester Research, Cambridge, Mass. That’s the high-cost option, at least in dollar terms.
On the other hand, delaying that customer’s order could be more costly in the long-term if the customer decides to take its future business elsewhere.
“To balance cost and service levels, companies now need a tool that shows not only shipping options, but also the cost and the effect those options have on delivery performance,” Connaughton says. “Use of a transportation management system [TMS] has become increasingly important for manufacturers and distributors because it delivers planning functionality—the ability to plan the right route and load structure, for example—as well as execution functionality so a company can determine the best course of action when changes occur.”
CONTECH Construction Products has been using the Sterling Transportation Management System (Sterling TMS) from Sterling Commerce for five years. It recently renewed its subscription to the on-demand solution based on its success at helping the company reduce costs and improving processes, says Rick Gaynor, VP of Logistics at CONTECH.
“The Sterling solution delivers the visibility necessary to gain a better understanding of how we execute our shipments across the entire organization, and that in turn enables us to quickly respond to changes in the supply chain as well as identify areas of opportunity for continuous improvement,” says Gaynor.
CONTECH, based in West Chester, Ohio, provides high quality, cost-effective engineering solutions to the bridge, drainage, earth stabilization, and storm water markets. The company, which has a physical presence in all 50 states and third-party distributors in every major U.S. city, tenders more than 100,000 flatbed trailer loads each year using more than 1,000 carriers.
“Like most companies, we make important decisions based on key performance indicators,” Gaynor says “By having visual access to information we’ve been able to make better decisions for our transportation business based on empirical data.”
Sterling TMS—part of the Sterling Selling and Fulfillment Suite—provides transportation planning, shipment execution, financial settlement, and tracking visibility. The solution enables users to consolidate transportation planning at the corporate level, and then execute shipment tendering at the regional plant level where the flatbed carrier knowledge resides.
One of the most significant benefits to using the solution, Gaynor says, is that it automates the tendering process. Since CONTECH’s business predominately involves flatbed loads, the company manages a private fleet as well as more than a thousand small carriers to enable service for regional markets.
In the past, the tendering process was done manually, which was complicated and time-consuming. Today, however, use of Sterling TMS automates the process with both contracted carriers and tenders via a bid process.
“Using the Sterling solution has allowed CONTECH to keep costs flat in a market where costs have increased from 3 to 7 percent,” he adds. “Having visibility into our spending in different markets has been extremely beneficial. “We’ve basically saved money and mitigated cost increases over the years caused by fuel and capacity constraints in the market.”