Becoming a Preferred Shipper
The aggressive timeline for the implementation presented something of a challenge, according to Meister, but he says that the buy-in on the part of the affected parties — with all the stakeholders viewing the new process as an improvement — helped ensure that the rollout went smoothly for the most part. Prior to the implementation, Barilla did have some concerns about whether its third-party service providers, including its 50 carriers, would view the new transportation management system as a value-add or simply as more work for them. The company did make clear to its service providers that the new system was going to be the sole platform for traffic planning at Barilla, with no exceptions, but Meister says that the service providers generally discovered that the new TMS actually made Barilla an easier company with which to do business and more attractive as a shipper.
In the financial justification for the project, the logistics team estimated in its return on investment (ROI) calculation that the implementation would save Barilla between 3 percent and 5 percent on its annual transportation spend, and that the project would pay for itself in the third full year of implementation. Beyond the hard dollar savings, the project has had several ancillary benefits for Barilla, such as more visibility to data and information, which has driven process improvements and benefited customer service, according to Meister.
Looking for New Opportunities
In addition, because Barilla's use of the solution has made it easier for carriers to do business with the company and, therefore, made the company more attractive as a shipper, Meister believes that with the current tight constraints on transportation capacity, Barilla may be better positioned than it otherwise would have been to gain access to additional capacity when needed. Barilla also was able to use the optimization tool in LeanLogistics solution to automate, in Meister's estimation, about 85 percent of the traffic planning decisions for its interplant transfers, such that the system is generating the mode and carrier selection for those shipments and then automatically tendering them. That allows the company's traffic planner to focus on dealing with exceptions and managing the process rather than processing transactions.
Finally, the company was able to achieve savings in freight payments by bringing that process in-house and gaining more control over the process. That has been particularly helpful over the past year with regard to time-based accessorials like detention, where the hours-of-service rules changes put pricing pressure on the accessorials.
At the time of the interview with Meister, Barilla's future plans for its work with LeanLogistics included incorporating inbound transportation and pairing that up with outbound transportation, then implementing the solution provider's appointment scheduling module. Elsewhere, Barilla was looking at evaluating a range of supply chain business processes, from demand forecasting and order processing to production planning, and possibly through transportation, with the idea of using the LeanLogistics project as a blueprint for potentially taking advantage of Web-based solutions to automate those processes. "We're using the success of this project and rolling it up the supply chain," Meister concludes.