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Cindi Hane – Logistics Management “Show Me the Time Management Money”
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Transcript of Cindi Hane – Logistics Management “Show Me the Time Management Money”
Show Me the Time Management Money
Logistics Management
Breakout – inSIGHT 2013
Presented by Cindi Hane
Elemica’s SmartLink Platform
Elemica’s Logistics Management Suite
Road Transport Execution Ocean Transport Execution Time Slot Booking & Optimization Terminal and Warehouse Visibility Freight Invoice Management
Agenda
• The Need for Time Slot Management • The Elemica Solution • Quantifying the Value
5
What is Time Slot Management?
Shipment Booking Appointment Planning Appointment Execution
Loading Day Shipment Booking or Notification
Planning Horizon (Release Time)
Modify Appt
Create Appt Modify
Appt
Loading Loading Complete
Weigh-Out
Arrived
Weigh-In
In-Transit Modify Appt
ASN
Accept Shipment
Tender Shipment
Time Slot Management: “The Burning Platform”
Business Need • Detention is the largest unplanned expense in transportation • The threat of a driver shortage is real • Wait time is non-value-added (waste) and increases uncertainty
Business Value • Large opportunity to reduce detention charges • Eliminate uncertainty on inbound loads -> decrease working capital • Reduces variability of delivery performance • Smoother arrival schedules means optimized site labor
Feasibility • Time Slot Management is one of the most impactful solutions and the most
feasible to implement
Superior SCM Delivers Value Across the Organization
Improvement Area Range
Delivery performance 16% - 28%
Inventory Cost Reduction 25% - 60%
Reduction in order fulfillment cycle time 30% - 50%
Improvement to forecast accuracy 25% - 80%
Increase in overall productivity 10% - 16%
Lower supply chain costs 25% - 50%
Improvement of fill rates 20% - 30%
Improved capacity realization 10% - 20%
Source: Stephens Comparative Study Pittsburg, USA
Average (Un)Load Times
Source: “How to reduce time spent by drivers on site and improve their treatment: Recommendations for loading and unloading sites”, ISSUE 1 DECEMBER 2009, ECTA, Responsible Care, CEFLC
• Based on Data from 47 sites in different countries, involving 20,000 loading or unloading operations
• Assume ~60 minutes to load a full truck
• Rough estimates for wait times:
• Liquid – 2 hrs • Dry – 1 hour • Packg – 2 hrs
2-to
4
hour
s
2-to
3.5
ho
urs
1.3 to 2 hours
(The Myth of) Driver Shortages
• It’s a Myth – Shortage calculations based on
dubious math – Made for lobbying against HOS
regulations
• It’s Irrelevant – There is a shortage of pay – There is very high turnover
• Experience levels decreasing
– Drivers usually don’t get paid for detention
Bottom line: Time Slot Management
benefits the drivers – enhances your carrier relationships
Reduce Uncertainty
Inbound
• Enforcing unloading appointment
times with your suppliers’ carriers
provides visibility to schedules
• Use the ASN to start the process
• Provides even more value for VMI
• Can modify slots to align with
production schedule JIT
• Lowers working capital
Outbound
• Enforcing loading appointment
times with carriers improves delivery
estimates to your customers
• Use the LTM to start the process
• Increases efficiency of load
operators
• Lowers detention charges
Optimize Site Resources
Peak Arrivals Before TSM
Peak Arrivals After TSM
15% reduction in Site Labor Costs
Source: Analysis based on Elemica data
Agenda
• The Need for Time Slot Management • The Elemica Solution • Quantifying the Value
13
Elemica Time Slot Management
• Collaborative Platform for Shipper and
Carrier
• Obeys constraints for locations, times,
resources, blocked times
• Security of data in carrier view
• Allows create, move, delete
Appointment Planning • Tracks shipment statuses
• Applies visual cues on
calendar
• Provides carrier performance
reporting
Appointment Execution
Loading Day Shipment Booking or Notification
Planning Horizon (Release Time) Frozen to Carrier
Modify Appt
Create Appt Modify
Appt
Loading Loading Complete
Weigh-Out
Arrived
Weigh-In
In-Transit Modify Appt
ASN
Accept Shipment
Tender Shipment
Site Hierarchy
Shipment Structure
• Provide location constraints at shipment header, stop, or product level
• Provide timing constraints at shipment header, or stop level
Shipment Apollo
DN1
DN2
DN6
ODi, Product A, 19-Sep-2012
ODi, Product C, 19-Sep-2012
ODi, Product A, 19-Sep-2012
ODii, Product A, 19-Sep-2012
Stop 1, Pickup
DN1
DN2
DN6
ODi, Product A, 20-Sep-2012
ODi, Product C, 20-Sep-2012
ODi, Product A, 20-Sep-2012
ODii, Product A, 21-Sep-2012
Stop 2, Deliver
Stop 2, Deliver
Plant Code | Storage Location | Shipping Point | Loading Point
Plant Code | Storage Location | Shipping Point | Loading Point
Plant Code | Storage Location | Shipping Point | Loading Point
Plant Code | Storage Location | Shipping Point | Loading Point
Plant Code | Storage Location | Shipping Point | Loading Point
Plant Code | Storage Location | Shipping Point | Loading Point
Requested Pickup Date/Time Start/End | Requested Delivery Date/Time Start/End
Requested Pickup Date/Time Start/End
Requested Deliver Date/Time Start/End
Requested Deliver Date/Time Start/End
Time Slot Management: Booking Appointments
16
The solution is integrated with Road Transport Execution. Navigate to the applicalbe stop to determine Slot Options
The solution shows only feasible times on feasible load points For Optimization, also feasible wrt resources User books the slot.
The view is defined by the role: Shipper or Carrier The Shipper has more capabiliites for creating, deleting, moving appointments The Shipper can manage blocked times, reservations, product outages
Time Slot Management: Booking Appointments
The Calendar View provides visual cues for actual loading status: • Orange = InTransit • Blue = Weigh in • Green = Loading
User can enter statuses manually from this screen
Time Slot Management: Managing Appointments
Agenda
• The Need for Time Slot Management • The Elemica Solution • Quantifying the Value
Potential Benefits
Assumes an average transport journey time of 8 hours per shipment
Source: “How to reduce time spent by drivers on site and improve their treatment: Recommendations for loading and unloading sites”, ISSUE 1 DECEMBER 2009, ECTA, Responsible Care, CEFLC
If all sites reduce the time spent on site by 20%, it is estimated that total freight costs could be reduced by 8%
If all sites limit the time spent on site to 2 ½ hours, it is estimated that freight costs could be reduced by 8.5%
If the time spent by a truck driver at (un)loading sites is reduced from 4 hours per (un)loading operation to 1 hour, the number of shipments handled per year by one truck driver doubles.
Quantifying the Value: Reduced Detention Charges
• 90,000 shipments per year • Detention Charges = $50/hour
after 2 hours of free time • Load Time = 60 minutes
• Shipments incur detention when time on site > 180 min
• Average time on site for shipments > 180 minutes = 230 minutes
• % Shipments that incur detention BEFORE TSM = 35%
• % Shipments that incur detention AFTER TSM = 10%
Assumptions:
• Average detention charge for a late shipment = $41.67 • (Avg Hrs – Free Hrs) * $50
• Detention Charges BEFORE TSM = $1,312,500
• Detention Charges AFTER TSM = $375,000
• Savings from reduced detention = $937,500 ($10.42 per shipment)
Calculations
Average Time on Site (minutes) Lowest
Observation First
Quartile Median Third
Quartile Highest
Observation
Liquid Bulk 55 120 180 240 300 Dry Bulk 45 80 122 122 122 Packaged 20 117 180 220 303
Quantifying the Value: Reduced On-Site Labor Costs
• 90,000 shipments per year • Cost per FTE for on-site labor =
$65,000 • # FTEs needed on site = 8.3 • Savings from FTE reduction =
15%
Assumptions:
• Annual Labor Costs for FTEs on-site = $539,500
• Annual Savings from FTE reduction = $80,925 ($0.90 per shipment)
Calculations
Total Savings:
> $1.0M annually $11.32 per shipment 2% savings
“recent challenges in carrier capacity (and) demands for faster and more-consistent
shipment turnaround (drive) more enterprises to evaluate this technology.
..Pressures to reduce costs and increase productivity have kept interest in (time
slot) scheduling.” Dock Scheduling and Carrier Appointment Management Dwight Klappich, The Gartner Group, November 2010
Time Slot Management
• Reduces wait times & detention • Reduces administrative time • Turns equipment more quickly • Improves carrier relations • Optimizes facility resources and
improves throughput • Eliminates uncertainty
Improving Time Slot Management:
Elemica Time Slot Management