The Value of Managing Global Transportation from a Single Platform

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1 The Value of Managing Global Transportation from a Single Platform

2 Introduction Globalization has put new pressures on shippers to carefully coordinate and orchestrate the movement of goods and merchandise around the world. Working with intricate supply chains that involve many different stakeholders, business partners, and customers, organizations are breaking down traditional transportation silos and leveraging centralized software platforms that allow their networks to be more efficient than ever before. With world trade expected to grow by 4.7 percent in 2014 and 5.3 percent in 2015, according to the World Trade Organization (WTO), the need for robust global transportation platforms will grow exponentially. In this white paper, we ll examine the global transportation platform and how it s being used, explore the economic value and related benefits of leveraging such platforms, and show how one shipper is realizing the value of managing global transportation from an online, centralized platform. Introduction pg 2

3 Addressing Key Supply Chain Challenges When the Supply Chain Council asked members what their key supply chain challenges were in 2014, complexity was one of five major hurdles currently on members plates. Serving many different customers with a wide variety of products and services may result in a complex, global, network of suppliers, factories, warehouses, transporters, customers and others, the SCC reports. The complexity of such a network is hard to unravel and makes it difficult to find where and why problems occur, the SCC states, noting that key challenges plaguing global players right now include not knowing what their supply chains are, what the right number of supply chains are, and ineffective process standardization. The sheer number of entities involved in global transportation can exacerbate these challenges outlined by the SCC and make the management task that much more difficult. When shipping internationally, for example, organizations work not only with business partners and customers, but also with customs brokers, freight forwarders, and/or third party logistics and warehouse providers (3PLs). For the freight to move efficiently across the supply chain, each of these entities needs to be able to input information and view data during the end-to-end process. Traditional, silo ed hardware and software systems don t allow for such visibility and are therefore completely inadequate in today s global business environment. Everyone that the shipper is working with needs access to the data and input to the transaction in order to handle their respective tasks efficiently and effectively, said Doug Surrett, Vice President of Global Logistics at MercuryGate. Closed, client-server type applications make it very difficult to extend out to all of those parties and enable them to participate in the transaction. Addressing Key Supply Chain Challenges pg 3

4 Overcoming this accessibility issue requires a multi-modal Transportation Management System (TMS) delivered via a Software-as-a-Service (SaaS) model, said Surrett, so that users can get into the system with a web browser and not have to load software onto their individual computers in order to participate. This need is particularly high in the global environment, where everything When you run all of these global from borders to distance to language activities through a single, web-based barriers can interfere with the smooth platform, you don t even need a running of a transportation network. separate international group - CCO, MercuryGate The use of different transportation modes presents its own series of challenges within the global environment, where different departments handle the organization s air, ocean, rail, and/or trucking activities. When companies consolidate all of the related data onto a single platform and allow each department to add input to and extra information from that platform the end result is a streamlined solution that can operate effectively without the need for a freight forwarding solution. When you run all of these global activities through a single, web-based platform, you don t even need a separate international group; you gain a holistic view over all activities, said Daniel Vertachnik, MercuryGate s executive vice president and chief commercial officer. That translates into fewer people, a more efficient organization overall, and the ability to optimize across the entire transportation network (the latter of which is impossible when different platforms and solutions are managing various tasks). Using a single platform, for example, companies can obtain real-time answers to questions like: Can I consolidate that parcel or smallpack shipment into LTL? Can I use truckloads instead? Can I consolidate LCL shipments into full containers? Can I create a Addressing Key Supply Chain Challenges pg 4

5 multi-modal environment across different ports in order to get the lowest cost and most efficient manner of shipping? These answers suddenly become more clear due to increased visibility afforded by a single, consolidated, online platform, Vertachnik said, and result in a system that runs far more efficiently than any disparate solution and/or platform could. Gaining Visibility and Control Via a Single Platform As a leading advanced composites manufacturer, Hexcel Corporation of Dublin, Calif., ships its lightweight, high-performance structural materials to aerospace, space, defense, and industrial customers worldwide. With a transportation network that s become increasingly global over the last few years, however, the company found itself challenged by disparate systems and a lack of visibility. With plants in the U.S., Europe, and Asia, the manufacturer went in search of a better way to manage its growing global business without having to add more manpower or invest in expensive equipment. Inter-plant shipping was an area of particular concern, according to Troy Mabe, Hexcel s global logistics and warehouse manager. Product is manufactured in Decatur, Ala., and Salt Lake City, and then delivered to the latter location for shipment to plants located around the world. Once those shipments left the confines of U.S. borders, Hexcel s visibility over its supply chain dropped dramatically. That was the biggest component that we were lacking, Mabe said. We were manufacturing within a silo ed complex, with every plant having responsibility for what was happening within its four walls. Outside of that, they had no visibility. That limited environment began changing about three years ago when Hexcel s leadership team began to put a greater emphasis on developing an end-to-end global supply chain. As part of that initiative, the company has implemented MercuryGate s global TMS in several of its plants and plans to complete its companywide installation in the near future. Mabe said the SaaS-based system was selected for its lower upfront costs (compared to Gaining Visibility and Control Via a Single Platfrom pg 5

6 traditional, licensed software) and its global capabilities. Equipped with a global trade management platform, Hexcel has increased efficiencies, streamlined its supply chain, and gained unparalleled visibility over its domestic and international operations. We ve moved away from the silo approach and are now making decisions based on best rates and timing, versus the favorite carrier philosophy, said Mabe, who We don t need a whole is responsible for nearly $30 million in freight spend host of logistics employees annually. Working with just one other super user of running this system; it the global transportation management platform, he s basically does it all. able to monitor every plant worldwide without the need for additional headcount. We don t need a whole host Hexcel s Global Logistics and of logistics employees running this system; it basically Warehouse Manager does it all. From its global TMS, Hexcel has also gained the ability to consolidate loads up to 10 days before products are even ready to ship a forward-looking capability that it previously lacked. As a result, the company no longer ships the same product to the same customer three days in a row and on three different vehicles. We re seeing a huge benefit from consolidation, Mabe said, and have been able to reduce our LTL down to percent of what we were previously handling. Looking ahead, Mabe expects Hexcel to drive even more value from its global transportation management platform. As the company s remaining plants go live, for example, he and his team will gain even more visibility and control over the manufacturer s global shipping operations. Mabe said the company also plans to establish two supply chain 24/7 Information From Pick up to Delivery pg 6

7 24/7 Information From Pick up to Delivery control towers one in Europe and another in the U.S. that will help further hone Hexcel s We re seeing a huge inter-plant freight movement. Visibility is and will benefit from consolidation, continue to be a huge push for us. and have been able to reduce our LTL down to As shippers like Hexcel have already percent of what we learned, gaining visibility over global were previously handling. shipping is not only an eye-opening experience, but it s also an effective way Hexcel s Global Logistics and to save money, time, and manpower when Warehouse Manager doing business in an international environment. By combining once-disparate functions into a single, cohesive platform that s accessible online 24/7, shippers gain both end-to-end visibility and control time visibility. When you have control tower visibility, said Vertachnik, everyone can see what s happening from the point of pick up to the point of delivery including you, your customers, your vendors, and your carriers. Not having to purchase multiple systems and then figure out ways to make them talk to one another also creates economic value, said Surrett, as does the standardized work flow between systems (particularly from an integration perspective). That means the user who gleans some data from a TMS and other key pieces of information from a Warehouse Management System (WMS), maintains the same set of processes across both domestic and international shipments. When someone doesn t have to be an expert in multiple IT systems, said Surrett, it makes things a lot easier on the users. Companies that move their international transportation Putting the Right System in Place pg 7

8 operations onto a single platform can also view all of their spend in a single system. That allows for better metrics normalized across modes and helps shippers accurately compare the cost differential between domestic and international shipments. This wouldn t be possible with silo ed, fragmented (and often manual) transportation systems that so many shippers rely on today. Putting the Right Systems in Place To begin realizing the benefits of an integrated transportation platform, companies must first put the right people in place to manage the new system. To lead the charge, Surrett said companies should select experts in the fields of domestic and international transportation each of which requires its own unique set of skills. They are very different sciences, said Surrett. You can have all of the right software in the world, but if your people don t understand what they re doing and why they re doing it, the effort will be pointless. Next, consider the major challenge spots that your firm has encountered in the international transportation space. Customs brokerage, for example, can be a particularly onerous requirement that leaves companies scratching their heads over the best way to get shipments cleared through customs (either exporting or importing). Going into this, you need to know if you re going to bring that particular niche expertise in house or if you re going to turn to an outside service for help, said Surrett. Before you make that decision, consider legal and operational impact of where the expertise belongs -- in-house versus outsourced. As you shop around, be sure to explore solutions that allow you to place your entire transportation operation on a single platform. MercuryGate s TMS, for example, can capably handle both sides of the equation and serves as a viable Putting the Right System in Place pg 8

9 choice for firms that want to simplify and consolidate their IT infrastructures while at the same time scaling up to meet the needs of global stakeholders and/or customers. Look at all of the solutions that are available on the market, Surrett advised, and select the one that can capably handle both functions. Finally, consider a SaaS solution for its seamless and userfriendly approach to software delivery. The international world of transportation comprises many different factions and entities most of which will want and/or need access to the information that s being stored on the platform. Unlike in the domestic arena, where a shipper and consignee round out the number of involved parties, your international shipments will include at least four parties (a shipper, consignee, bill payer, and carrier). Depending on the size of your company, there may also be interplay between your domestic and international networks (as in the case of Hexcel, for example), said Surrett. This creates opportunities from a cost perspective to begin overlaying the two networks to be able to leverage transportation savings yet another benefit of using a single, global transportation solution. This creates opportunities from a cost perspective to begin overlaying the two networks to be able to leverage transportation savings yet another benefit of using a single, global transportation solution. Vice President of Global Logistics at MercuryGate Ultimately, managing global transportation from a single, web-based platform that s available to users 24/7 puts shippers in the driver s seat and allows them to see and control their end-to-end supply chains in unprecedented ways. With all activities orchestrated through a single system that can handle both domestic and international freight movement, companies can rest easy knowing that they ll be able to respond and execute quickly in today s competitive business environment. Putting the Right System in Place pg 9

10 About MercuryGate International, Inc. MercuryGate International, Inc., delivers collaborative, global transportation management solutions for shippers, carriers, brokers, freight forwarders, and third party logistics providers enabling them to plan, optimize, execute, and settle global transportation movements while providing complete endto-end control tower visibility and decision support. With MercuryGate s configurable architecture and workflow engine, MercuryGate s clients are able to manage parcel, LTL, intermodal, and truckload shipments as well as complex multi-leg, ocean, air, and rail movements. MercuryGate International, Inc. 200 Regency Forest Drive, Suite 400 Cary, NC P:

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