Show Me the Time Management Money

Logistics Management

Breakout – inSIGHT 2013

Presented by Cindi Hane

Elemica’s SmartLink Platform

Elemica’s Logistics Management Suite

Road Transport Execution Ocean Transport Execution Time Slot Booking & Optimization Terminal and Warehouse Visibility Freight Invoice Management

Agenda

• The Need for Time Slot Management • The Elemica Solution • Quantifying the Value

5

What is Time Slot Management?

Shipment Booking Appointment Planning Appointment Execution

Loading Day Shipment 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

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

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

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-to

4

hour

s

2-to

3.5

ho

urs

1.3 to 2 hours

(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

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

Optimize Site Resources

Peak Arrivals Before TSM

Peak Arrivals After TSM

15% reduction in Site Labor Costs

Source: Analysis based on Elemica data

Agenda

• The Need for Time Slot Management • The Elemica Solution • Quantifying the Value

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 Day Shipment 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

Site Hierarchy

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

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.

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

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

Agenda

• The Need for Time Slot Management • The Elemica Solution • Quantifying the Value

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.

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

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

“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:

Elemica Time Slot Management