ORLANDO – For companies that manufacture and move goods, transportation is an area where improvement can mean major cost savings and better service for their customers.
At SAP’s SAPPHIRE conference, two customers of the German business software giant described their approaches for improving their use of data to address the transportation problems plaguing their organizations.
Woodgrain Millwork, a Utah-based lumber supplier and custom moulding manufacturer, is gearing up for a June launch of SAP’s Transportation Management software. The company is starting by centralizing transportation for seven of its 17 sites that were previously siloed and working independently.
These seven mills ship lumber to retailers like Home Depot and independent lumber yards. Connie Moylan, the CIO of Woodgrain Millwork, said by bringing the operations together and managing transportation with a single piece of software they expect to save 15 percent on transportation costs.
“We did our evaluation for where the best ROI was for a new system, and it was by far in transportation management,” Moylan said.
With the new software, and by outfitting each truck with GPS systems, Moylan’s company will be able to track the companies 3,500 trucks and drivers.
“It allows us to see and manage where drivers are going,” she said. “It also allows us to monitor driver behavior, whether they’re braking too hard or driving too fast. That’s where some of the cost savings lies, on equipment wear and tear.”
The other savings come from fuel consumption, where by better understanding routes and customer demand, the company can send fewer trucks.
“If you can get stuff moved on two trailers instead of three, then you’ll be a lot more efficient with the amount of fuel you use,” said Bill King, SAP’s solution manager for the Transportation Management software.
Moylan said the new system allows for a much more granular view of the data, and when the system expands to all 17 of her company’s shipping sites she expects there will be even more process improvements that become apparent after data analytics.
Better Data, Better Results
Global manufacturing company Honeywell had a different problem in its North American performance materials and technology (PMT) division. Honeywell PMT manufactures chemicals, plastics and resins and ships about 60,000 deliveries a year to its customers in North America.
Tom Ventrudo, a lead systems business analyst at Honeywell, said the company wanted to improve its customer service by being able to create a more accurate delivery schedule.
“We did this first and foremost to delight the customer,” Ventrudo said. “But not only are we getting the product to them on time, we’re getting the paperwork on time as well.”
Ventrudo said the company found that its previous system, which broke down each continental U.S. state and Canadian province into a single zone, simply wasn’t accurate enough. Deliveries promised in large states or Canadian territories weren’t taking into account true distance; for example Houston and El Paso Texas are 745 miles apart, more than a single day’s drive.
So Ventrudo and his team built a system that takes advantage of the Google Map API. By connecting the company’s SAP ERP Central Component software to this data source, the company could get the true distance to within a hundredth of a mile. With this as a foundation, the company built additional layers to handle exceptions and to help customer service representatives give accurate delivery estimations.
The result of adding Google’s GIS data to its SAP system resulted in a 53 percent decrease in late deliveries.
One of the best parts, Ventrudo said, is that Google’s API is free to anyone who connects fewer than 25,000 times a day. Honeywell’s PMT division only connects about 200 times daily.