Transportation Costs are Often the Major Expense in Distribution
In consumer product companies, freight costs often far exceed 60% of the total distribution cost. Unfortunately, many of the costs associated with transportation - like fuel and insurance - are driven by international forces. And population demographics are very unfavorable for a plentiful supply of drivers. All these things push operating costs of a truck fleet higher. As such, it is hard for shippers to have any leverage over their carriers - forcing more creative and innovative ways of attacking the freight-cost problem.
Eliminate the Need for Shipments
How often does product made in Los Angeles get shipped from there to a warehouse in Chicago only to be shipped back to Denver? How often does product get produced at a plant and moved to an outside warehouse and then moved back to be shipped from the plant? Eliminating wasted moves is a significant opportunity to reduce total supply chain costs.
Transportation | Warehouse Optimization has two systems that support the elimination of shipments by smarter planning:
- AutoSPO (Automatic Ship Point Optimization) – determines the best place to ship any order from based on cost, margin, fill rates and available capacity.
- AutoScheduler – a scheduling genius that takes into account all factors to plan minute-by-minute deployment of inventory and activities to support on-time shipping in a capacity constrained world (finite capacity distribution scheduling and DRP).
Order Optimization - An End-to-End Solution that Helps You Create and Ship Fewer, More Efficient Loads
A study of over 1 million trucks traveling on U.S. highways in June 2008 showed that 84% wasted more than 5% of their weight capacity. Simply put, most trucks are not shipped full. With this in mind, one major consumer goods company looked to see how they could increase shipment size. They came up with the concept “Super Truck” - More Product, Fewer Loads!
Our AutoO2 (Automatic Order Optimization) software minimizes supply chain transportation costs by optimizing orders to maximize the loads on all trucks in a way that cannot be achieved manually, with TMS (Transportation Management Systems) or with non-optimizing systems.
Procter & Gamble has gone on record saying that replacing their load builder with AutoO2 reduced their transportation costs by 7%.