Copyright 2003, Traffic World, Inc.
Rockline Industries is cleaning up its supply chain, cutting from hours to minutes the time it takes to plan shipments and filtering waste from its transportation budget. North America''s largest producer of coffee filters and baby wipes expects to gain significant savings from recently installed transportation management software.
The company went live with Logility''s transportation planning software Oct. 13 at its largest plant, located in Wisconsin. Already it is seeing value, said Dale Steeno, transportation manager. Before using Logility, Rockline spent "a few hours each day" manually combining some of its less-than-truckload shipments into truckloads, he said. "Now we put in orders and a minute later we have an optimized result."
Rockline''s purchase of supply-chain software is part of an ongoing trend, said Karin Bursa, vice president of marketing for Logility. Supply-chain execution software for warehousing and transportation management remains hot, she said. "They are areas that offer a quick payback," she said.
Like all shippers, Steeno wants to reduce costs. The new software "is not a lot easier as far as time savings because we are going back and forth. But what we are seeing is more combinations and better combinations of loads sent out. That results in savings," he said.
How much? Rockline anticipates saving 8 percent on its transportation spending, a significant number in a low-margin business, said Steeno. "Wet wipes and coffee filters don''t sell for a lot of money. Transportation is a large percent of the cost for us," he said. The reasons for installing the technology go far beyond cost, but "what justifies buying it is the transportation savings," he said.
Rockline did not install the technology as a response to the weak economy, said Steeno. "Our products are kind of recession-proof," he said, citing the low cost of filters and wipes.
But if not the economy, then why did they decide to install the technology now? "We''ve been growing at a pace of about 20 percent over the last four to five years. The more orders you get, the more the savings justify putting in a system like this," said Steeno.
Rockline also purchased Logility''s freight payment and load tendering technology and is installing enterprise resource planning software from J.D. Edwards simultaneously, said Steeno. Rockline plans to go live with J.D. Edwards ERP software next spring.
In the meantime, the company takes optimized leg and route orders from Logility''s transportation planning software and manually enters the information into its legacy planning system, said Steeno. After J.D. Edwards is installed, the two systems will be integrated and Rockline will begin using the freight payment and load tendering software from Logility, he said.
In December Rockline will begin installing the technology at its second-biggest plant, in Arkansas, said Steeno. "And then we will stop until next spring" when the installation of the J.D. Edwards software is completed.
Rockline plans to be up and running on Logility software by May 2004, he said.
Rockline had not been using using software to choose the lowest-cost less-than-truckload carrier. Consolidating LTL shipments "wasn''t a problem but it was a missed opportunity to save transportation dollars," Steeno said.
He recommends transportation software to "anybody that prepays freight to the customer (and) has a good number of LTL shipments." Companies without the technology "are leaving time and money on the table if they don''t have one of these systems," he said.
In general, Logility is "starting to see the (supply-chain software) market pick up across the board," said Bursa.
At the same time, the company is transforming its software to be more collaborative. Logility''s software supports more complex transactions and includes technology for a private freight exchange over the Internet, she said. Some third-party logistics companies are using the freight exchange, said Bursa.
The exchange was released to the market two years ago to extend a company''s transportation optimization and management, said Bursa. "But companies were not ready for it," she said. "The past year companies have been deploying it and getting good results with it." About six companies use the software.
Atlanta-based Logility sells predominantly to manufacturers, distributers and retailers, said Bursa. "All those sectors have been fairly stable," she said. The company focuses its transportation business on midsize companies in North America with annual revenue ranging from $200 million to $4 billion, she said.