Frequent Misconceptions

 

Top 10 Frequent Misconceptions
 

Companies are always looking for ways to reduce transportation and distribution costs.  With AutoO2, our bolt-on order optimizer, we've been able to provide transportation savings of 4-8% to companies like Procter & Gamble.  Over and over again, we hear the same thing:  Is there a "fit"?  Is there an "opportunity"?  Here are the Top 10 most frequent misconceptions:

 

Misconception Resolution
1. Our loads are always maxed out Good companies are "maxing out" around 90-95% truck capacity utilization.  Great companies use optimization to achieve 98%+ truck capacity utilization.
2. Our TMS optimizes orders A TMS can consolidate orders to create "full truck loads".  If a shipment is using 90% of truck capacity and there isn't a small order to consolidate with, the TMS can't help.  It's better to create the order upfront that completely fills the truck, rather than rely on the TMS.  We also guide the loading of the order to ensure what is planned, is shipped.  A TMS cannont. 
3. We have no IT support We can determine the opportunity and operate without IT support in most companies.
4. We are happy with our existing systems and results Are your loads using 98%+ of the trailer capacity?  If the answer is no - there's a cost to being happy.  Most companies save 4-8% on their PO, VMI and STO freight budget.
5. AutoOseems to be a better fit with suppliers - not retailers Not true - Retailers we've worked with, see collect vendor inbound shipments rarely maximizing trailer utilization. More importantly, they don't see a change in open-to-buy or inventory.
6. We're not as large and complex as a P&G or Kraft to need something like this It's all about savings!  How much would 4-8% transportation savings add to your bottom line?
7. We usually cube-out - so I don't see an opportunity Optimized combinations often increase cube per load and reduce total shipments every year - saving money!
8. We usually weigh-out - so I don't see an opportunity What is a fully loaded truck?  The warehouse often creates a "safe rather than sorry" approach to setting maximum weights so loaders don't create over-axle loads.  AutoO2 provides loaders with a pattern that keeps axles legal and manages within 1-2% of a truck's real capacity.
9. Our transportation is handled by a 3PL Does your company write the deployment orders?  If so, your planners' drive the cost.  Your 3PL's TMS frequently can't fix orders that use less than 98% of a truck capacity.
10. We can't influence truck fill because we ship direct from the production line Deploying from the line can be optimized using AutoCDO (Automatic Constrained Dock Optimization). AutoCDO coordinates production and loading even when there's limited storage space.