| Sr | Partner | Partner’s Primary Contact |
|---|---|---|
| 1 | Flexaust | Leigh Elliot | [email protected] James Hall |
| 2 | Freightsnap | Michael Eichenberg | [email protected] |
| 3 | Motus Logistics | Jaron Klopstein |
| 4 | Texcel Rubber | Steven Dickson | [email protected] |
Partnership Date: Wednesday, August 21, 2019
#1 Describe the challenge that led to the formation of the partnership. *
Flexaust:
Flexaust is a manufacturer of industrial-grade flexible hose and ducting, and supplies hose accessories such as couplings, connectors, cuffs, and attachments. The company is based in Warsaw, Indiana and celebrated 80 years in business in 2018.
As the company was nearing its 80th anniversary, it was facing rising freight costs. In rural Indiana, where the company is located, there is not a lot of competition among carriers. In addition, Flexaust’s shipments varied greatly in weight and volume. Orders might contain high-volume, low-density hoses or low volume, high-density hose couplings in any number of combinations. The company faced a lot of disputes with carriers over weights and classes, and reweighs and reclasses were costing the company money. The delays were resulting in unhappy customers.
Texcel Rubber:
Texcel is a supplier of industrial hoses, couplings and accessories; hydraulic hoses and fittings; and fluid sealing products based in Houston, Texas. The company has been growing rapidly and managing logistics was becoming overwhelming. The company didn’t have a TMS system, and was working directly with carriers. Because they didn’t have good information, the warehouse team was often making poor shipping decisions which were costing the company money. Texcel was receiving a lot of overlength fees, reweighs, and reclasses for its shipments, and keeping up with audits and claims was becoming increasingly difficult.
#2 Describe/outline the project or specific set of goals derived from the challenge. *
Flexaust:
The company had engaged with a third-party logistics service in the past and was not impressed, but knew that something had to change. Company growth was straining their current staff to the maximum, and Flexaust did not want to increase its shipping and logistics headcount. Their existing system failed to provide the necessary visibility into actual shipping costs vs. what was being charged to the customer, and it did not provide reporting on shipping volumes by destination over time, data that was essential to have if Flexaust’s logistics were to improve. Additionally, they needed to reduce the number of disputes resulting in reclasses and reweights. Flexaust wanted to stay ahead of rising freight costs by improving efficiency. Reduced shipping costs would be an additional benefit that would result from achieving the main goals of maintaining headcount, improving negotiating power by being more data-driven, and proactively heading off disputes.
Texcel Rubber:
At a meeting of NAHAD, the Association for Hose and Accessories Distribution, Steven Dixon, Procurement Manager at Texcel, became acquainted with Jaron Klopstein of Motus Logistics, a consulting and transportation management solution provider and integrator. Motus Logistics was called in to conduct a study of Texcel’s shipments. Motus Logistics identified a segment of reclasses, reweights, and adjustments in their data that rerated over 500% greater than their original quoted costs due to excessive length, cubic capacity, and incorrect freight processing. These were expenses that should have been charged to customers, but instead Texcel was bearing these costs due to its error-prone processes and lack of visibility.
It became clear to Texcel that they needed to invest in a solution which would improve accuracy and reduce expenses. Having more documentation and more data on their shipments and more information about shipping options was essential if their situation were to improve. Texcel needed to collect more data, but needed a solution which would integrate with their existing ERP system so that the process wouldn’t slow their team down. Texcel wanted to shift the responsibility of invoice audits and claims away from their procurement manager, who also handled inventory and logistics.
#3 Showcase your proven results made possible through collaboration. *
Flexaust:
Leigh Elliot, Materials Manager, and James Hall, Production Manager, both of Flexaust, had a discussion with Jeron Klopstein of Motus Logistics, an agency partner of Cerasis who sells Cerasis solutions and technology. They saw that by partnering with Cerasis they could empower their team to handle more volume without increasing hours. The Cerasis Rater TMS gave Flexaust the visibility they needed not only at the shipment level but also aggregated by type of shipment and location. This information could be used to negotiate better rates with carriers. Flexaust also started using Cerasis Carrier Relations and Cerasis Freight Claims Management & Invoice Auditing services to take some of the workload off their team.
The improved data was also used to uncover the benefits of opening an additional distribution center which resulted in cost savings as well as improved delivery times for customers. The expanded distribution network enabled Flexaust to win back a customer they had lost to a competitor.
The number of disputes began to fall after the Cerasis Rater TMS implementation, but Flexaust was eager to see if it could fall further. Upon the recommendation of Motus Logistics, Flexaust tapped FreightSnap dimensioning technology to add automated dimensioning to the shipping process. An integration was developed which would bring the dimensions directly into Cerasis Rater. The number of disputes, and the hit they took to productivity, continued to fall.
Texcel Rubber:
Motus Logistics recommended a solution integrating the Cerasis TMS Rater system with FreightSnap dimensioning technology. Both would integrate with Texcel’s existing Epicor ERP system. These technologies were supported by services from Cerasis including Cerasis Freight Claims Management & Invoice Auditing and Carrier Rate Negotiation.
Post-collaboration, the warehouse team is able to make better shipping decisions on behalf of the company. They are able to select the carrier which is the best fit for each shipment and consider the costs and benefits of different shipping speeds and shipment consolidation, saving the company money. Because Texcel collects images and dimension and weight data for each pallet and it is readily available within the system, audits and claims are handled easily and the number of reweighs and reclasses has dropped significantly. Texcel is able to win most claims because there are photos documenting the condition of each shipment before it leaves the facility.
#4 Quantifiable results. *
Flexaust:
Flexaust tracks shipping costs as a percentage of sales. In 2018 company was able to maintain this percentage at 3.2% during a time period where most shippers were experiencing an increase in shipping costs. Flexaust has experienced a noticeable shipping savings in 2019, down 5% from the previous year. Disputes are down by 75% with dispute resolution nearing 100%. The company was able to expand shipping volume with the same headcount, avoiding additional labor costs.
Texcel Rubber:
Post-implementation, Texcel has been able to achieve a near 100% success rate in fighting any new reweighs & reclasses since implementing the FreightSnap to Cerasis Rater integration, and now claims are a 95% success rate. This has allowed them to keep freight rates flat year over year when most have experienced an increase. They have been able to avoid charges for reweighs, reclasses, and freight claims. They also, thanks to Cerasis Invoice Auditing, are able to catch errors and save more money than they could processing claims in-house. See the attached rerate report for Texcel, showing 100% accepted disposition so far. It’s the file “InvoiceAdjustmentHistory.”
#5 Describe the short and long-term benefits/impacts of the partnership and project. *
Flexaust:
The partnership between Flexaust, Motus Logistics, Cerasis, and FreightSnap has taken Flexaust’s logistics operations to a new level. The increased visibility makes it possible for Cerasis to negotiate better rates with carriers on behalf of Flexaust. The Flexaust team also has the data needed to determine which additions or changes to distribution points will yield greatest efficiency and better service as conditions change. This increased agility coupled with keeping the shipping staff lean will continue to serve Flexaust well going forward.
Texcel Rubber:
Texcel has saved significantly on shipping, reduced reweighs and reclasses, and invoice errors. Short term benefits also include the outsourcing of audits and claims processing, reducing the heavy workload of the Procurement Manager.
Long term benefits include more empowerment of the warehouse team, and more confidence in the ability to scale and grow as a company. Texcel is looking at adding additional product lines, and to expanding hydraulics distribution to other locations. With more visibility into how shipments by geography are changing over time, Texcel will be able to determine the locations for future distribution points which will minimize freight costs. Texcel executives now have data to support business decision-making and thus are more confident in proceeding with new initiatives.
#6 Describe the solution and include examples of success. *
Flexaust:
The solution involved the implementation of Cerasis Rater TMS and FreightSnap dimensioning and the integration of FreightSnap with Cerasis Rater TMS via an API. These technologies were supported by services from Cerasis including Cerasis Freight Claims Management & Invoice Auditing and Carrier Rate Negotiation.
Post-implementation, all the Flexaust shipping data are available in one place and are easily tracked and aggregated. The number of disputes has fallen substantially. Additionally, Flexaust was more confident in its decision to add another distribution point, which has resulted in better customer satisfaction and the winning back of a former customer who has switched to a competitor.
Texcel Rubber:
At the recommendation of Motus Logistics, Texcel proceeded with implementation of Cerasis Rater TMS and integration with their existing Epicor ERP system. They were pleasantly surprised when this implementation took weeks rather than months. Then Texcel implemented FreightSnap’s dimensioning solution, which integrates with the Cerasis solution. Their process has become much more efficient. The team will take an order (from Epicor ERP), and then the pick ticket goes to the warehouse. The warehouse team pulls the items that are needed, and packages and palletizes the order. The pallet is placed on the FreightSnap dimensioner which calculates all the weights and dimensions. When the pick ticket is scanned into the Cerasis Rater, it pulls in the customer info, address, billing terms, and freight details. The Bill of Lading is easily created. Previously there were a lot of manual data input steps which were prone to errors. Post-implementation, the flow of information has been much more seamless and accuracy has improved greatly, leading to a big reduction in reweigh and reclass disputes.
#7 Describe how the lessons learned impact the supply chain. *
Flexaust:
Having well-organized, high-quality data makes a big difference not only in the day-to-day activities of calculating customer shipping costs more accurately, handling class and weight disputes, and negotiating with carriers, but also in supporting big decisions like distribution center location.
Texcel Rubber:
Capturing and integrating data so that it is easy to access has improved the efficiency of Texcel’s supply chain, reducing errors and improving service to customers. Having more data at hand and accessible to not only management but to all the team has improved the company culture by empowering everyone to make better decisions that positively impact the bottom line.
#8 Describe any future plans pertaining to the partnership and/or project. *
Flexaust:
Flexaust will continue improving the integration between Cerasis and FreightSnap and continue to automate data aggregation and reporting.
Texcel Rubber:
Texcel plans to add more FreightSnap dimensioners to its other locations. Most of the company’s products are imported and the company communicates with suppliers via email or phoning the freight desk. Some of this communication could take place from within the Cerasis Rater, further streamlining Texcel’s processes.
