2005 Supply & Demand Chain 100 Case Study  Orange Glo International / LeanLogistics

Profiles in Supply Chain Enablement: To reduce transportation costs and increase on-time deliveries, cleaning products leader turns to an "on-demand" transportation management system

Profiles in Supply Chain Enablement: To reduce transportation costs and increase on-time deliveries, cleaning products leader turns to an "on-demand" transportation management system

Company: Orange Glo International (Denver, CO)
Company Size: Medium
Company Sector: Manufacturing (CPG)
Area(s) of Enablement: Procurement, Fulfillment/Logistics, Payment
Enabler: LeanLogistics (Holland, MI)

SDCE 100 2005Case Study: Orange Glo International is a family-owned and -operated business manufacturing cleaning products from the oil of fresh squeezed Valencia oranges, eschewing processed chemical extracts.

The Challenge: Fragmented Control

Transportation control at Orange Glo was fragmented among different warehouses. Each warehouse location shipped independently and selected carriers to move freight. Carrier capacity and networks were not shared among the operating units, and creating warehouse accountability without control was difficult. In addition, freight payment was time consuming and manual, resulting in overcharges, duplicate payments and high administrative expenses due to manual coding and allocation.

Also, Orange Glo's enterprise resource planning (ERP) system, from JD Edwards, resided only at the company's headquarters in Denver. Communication with warehouses was conducted via EDI from JD Edwards, and the warehouses had no visibility of orders until the EDI 940 (warehouse shipping order) was transmitted.

As a result, Orange Glo's freight tendering (offering shipments to carriers) was done without visibility to rates or cost. Loads were manually combined and tenders were phoned or faxed to carriers by the warehouses; carriers responded back with confirmation or rejection via the same method.

The Solution: On-demand TMS

To address these challenges, Orange Glo chose LeanLogistics to help monitor and cut costs throughout their supply chain. Orange Glo implemented LeanLogistics On-Demand TMS to facilitate planning, tendering, executing and financial settlement of loads. The Web-based solution also offers request-for-quote and analytics capabilities.

At Orange Glo, the transportation department used LeanLogistics to streamline the company's transportation processes across load planners and facilities. The solution provided a quick and efficient way for Orange Glo staff to create and tender loads, and by using LeanLogistics, opportunities to combine orders into loads became more frequent. LeanLogistics also gave the company visibility to its third-party warehouses and customer service.

In addition, while freight allocation in the LeanLogistics On-Demand TMS was traditionally done at the order level, the process was amended to meet Orange Glo's need to allocate freight costs down the line item to allow integration back into JD Edwards.

The Payback: Increased Control, Found Savings

Key benefits for Orange Glo of using the LeanLogistics solution have included increased visibility and efficiency, with a gain in workflow and time. Fax and phone are no longer necessary to tender loads to carriers or to communicate with the warehouses. Warehouses can view what is shipping for each day and the assigned carrier. Customer service can view orders and see their pick up and arrival dates. Multiple carriers and rates can be defined for a single load.

Orange Glo has seen tangible benefits in rating and settlement. With visibility to rates, the company discovered an error in a carrier's tariff and was able to claim $80,000 in error. Other savings have come from rate adjustments and payment. When the carrier accepts the load, it accepts the rate of the load. Any changes to the cost of this load, accessorials or fuel surcharge are kept in LeanLogistics On-Demand TMS; this makes the settlement of the freight bill an audit at the same time. Duplicate bills and overcharges are detected by the LeanLogistics system, yielding more savings for Orange Glo.

For a more detailed case study of Orange Glo International's use of LeanLogistics, please see the 2005 Supply & Demand Chain Executive 100 Showcase online whitepaper at http://www.sdcexec.com/specialads/pdf/6_LeanLogistics_CS.pdf.

For more stories of successful supply chain implementations, read the "2005 Supply & Demand Chain Executive 100" article in the June/July 2005 issue of the magazine. Also watch the Today's Headlines section of SDCExec.com every Tuesday and Thursday for more in depth best practices drawn from this year's Supply & Demand Chain Executive 100.