Take one manufacturing facility, add four regional distribution centers (DCs) and 50-odd carriers, and then toss in tons and tons of pasta and hundreds of customer sites, and you get a recipe for a challenging transportation management environment. That's just the type of environment that Barilla America Inc. was facing a couple years ago when the company decided to deploy a new transportation management system to gain better visibility into, and control over, shipments of its pasta products to customers around the U.S. market.
Lots of Pasta, Limited Visibility
Barilla America, based in Bannockburn, Ill., is the U.S. division of Parma, Italy-based Barilla, the 128-year-old Italian foods and baked goods company that is that country's largest food-processing concern and top name in pasta. Barilla America operates one large production facility in the U.S. market, in Ames, Iowa, as well as four DCs around the country to handle distribution of product to Barilla's customers.
Eric Meister, director of Supply Chain Services with Barilla America, says the company's U.S. division had been doing a pretty good job of managing the movement of its goods around the country, but Barilla nevertheless saw room for improvement in its transportation processes. "The execution of transportation planning was decentralized," Meister explains. "We had limited visibility into financial planning opportunities across our network, and we had limited visibility into what was going on at all the locations."
Setting the Requirements
Mid-2003 found Barilla America's logistics organization looking for a solution that could give the -company better visibility into the movement of its products around the country. The overall strategy adopted by the logistics team focused on deploying a platform that would connect the company's transportation planning and customer service functions, Barilla's production and warehouse facilities, its third-party carriers, and, eventually, its customers — connecting all the dots, as it were, to allow the company to monitor the progress of shipments, check shipment status and otherwise gain a real-time picture of where its goods in motion were in the supply chain. In surveying the transportation management systems landscape, Barilla's logistics team had three primary business goals in mind for the project. First, they wanted to automate and standardize the company's transportation planning procedures. Second, they were looking to drive cost savings through better execution of carrier mode and shipment optimization. Third, Barilla wanted better visibility into its shipments after they left the warehouse.
On the technical side, the logistics team wanted to find a solution that would integrate easily into the company's enterprise resource planning (ERP) system, that could be implemented relatively quickly and easily, and that could generate a fast return on investment. Barilla also wanted a technology partner that could provide best-in-class support after the sale, Meister adds. "We weren't looking at this as a one-time buy. As our business changed and grew, we wanted a partner that could support that change and growth."
Centralizing the Planning Process
Barilla evaluated six different solution providers before settling on Holland, Mich.-based LeanLogistics, which offers a hosted transportation management system with planning, execution and settlement functionality.
The implementation of the transportation management system (TMS) essentially began about three months before Barilla selected a solution provider, as the logistics team invested the time and effort to map the company's "as is" and "to be" business processes, which helped them define the key requirements for the TMS. Once the request for proposal process concluded and Barilla had selected LeanLogistics, the company was able to get its first pilot location up and running on the Execution Management component of the provider's solution within six weeks, followed by the remaining locations within four months. Within six months of selecting LeanLogistics, Barilla had completed implementations of the provider's Settlement and Planning products as well. During that time, the logistics team also centralized traffic planning and freight payment at the company's headquarters, moving those processes out of the various shipping locations.