Cindi Hane – Logistics Management “Show Me the Time Management Money”
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Breakout Presentation from Elemica's inSIGHT 2013 Conference
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Cindi Hane – Logistics Management “Show Me the Time Management Money”
- 1. Show Me the Time Management Money Logistics Management Breakout – inSIGHT 2013 Presented by Cindi Hane
- 3. Elemica’s Logistics Management Suite Road Transport Execution Ocean Transport Execution Time Slot Booking & Optimization Terminal and Warehouse Visibility Freight Invoice Management
- 4. Agenda • The Need for Time Slot Management • The Elemica Solution • Quantifying the Value
- 5. 5 What is Time Slot Management? Shipment Booking Appointment Planning Appointment Execution Loading DayShipment 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
- 6. 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
- 7. 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
- 8. 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-to4 hours 2-to3.5 hours 1.3 to 2 hours
- 9. (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
- 10. 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
- 11. Optimize Site Resources Peak Arrivals Before TSM Peak Arrivals After TSM 15% reduction in Site Labor Costs Source: Analysis based on Elemica data
- 12. Agenda • The Need for Time Slot Management • The Elemica Solution • Quantifying the Value
- 13. 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 DayShipment 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
- 14. Site Hierarchy
- 15. 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
- 16. 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.
- 17. 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
- 18. 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
- 19. Agenda • The Need for Time Slot Management • The Elemica Solution • Quantifying the Value
- 20. 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.
- 21. 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
- 22. 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
- 23. “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: