Business Situation

In today’s B2B world, visibility into the supplychain is crucial, both for cost-cutting andprofitability purposes. These business pressuresprompted a provider of world-class supply chainsolutions and services to turn to us to increasethe transparency of its supplier compliance andcarrier management processes.

Our client provides supply chain services to itsparent company and more than 50 other leadingcorporations throughout the world. It operates119 facilities and offices in 23 countries on sixcontinents and provides full-service capabilitiesto companies in a variety of market sectors,including automotive, industrial, mining, oil andgas, aerospace, technology, consumer durables,manufacturing logistics, and maintenance, repairand operations (MRO).

Challenges

The supply chain services and solutions providerwas experiencing a number of business challengesin its supplier compliance and carrier managementprocesses. As a result, it was looking to improveits supplier-carrier communications and visibility,as well as collaboration with its transportationcarriers.

Our client’s business challenges included the fol-lowing:

• Suppliers shipped materials using high-cost ornon-compliant carriers due to minimal visibilityinto negotiated contract rates.

• Because transportation planners had littlevisibility into carrier contracts, there wasincreased use of spot rates instead of negotiatedrate contracts, resulting in higher transportationcosts for the customer and a direct impact onthe bottom line.

• Transportation arrangement processes werenot highly automated or integrated with theclient’s transportation management system(TMS). As a result, carrier selection and ten-dering were time-consuming processes, andthe client had minimal visibility into trans-portation execution events.

Solution

The client’s TMS lacked the ability to expose ratesto suppliers, resulting in the use of non-optimal/non-compliant carriers. Moreover, mostnegotiated contracts were maintained indisparate sources, either in paper form or inspreadsheets, which made it difficult and time-consuming to look up optimal rates.

To resolve this, we developed a wrapper aroundthe client’s TMS, which was the centralizedrepository for carrier rates. The wrapper gavesuppliers access to carrier rates in the TMS, thusproviding the visibility they needed to chooseoptimal carriers. This also enabled the client tomore effectively measure supplier compliance inusing optimal rates.

To ensure that load planners and suppliers canaccess rates in a timely manner, we also devel-

case study | july 2011

Standardizing Carrier Management for aLeading 3PL Company

• Case Study

oped a streamlined method to enter lanes andrates from disparate sources into a centralizedrepository. We did this by re-engineering theclient’s rate management process, creating stan-dard carrier rate templates across modes. As aresult, existing rates and new ones can be collect-ed, stored and retrieved by suppliers and loadplanners, thus providing them with a more accu-rate picture of freight costs, more quickly.

This solution enables our client to effectively cre-ate and manage both buy-side and sell-side ratesdigitally. It also gives load planners the ability tocentralize disparate rate management systemsinto a single, global system that can optimize car-rier rate management processes and effectivelyleverage rate information to improve productivi-ty, profitability and customer service.

We also introduced a common API that can beused by other Web service-enabled applicationsto obtain rates for a specific origin, destination,mode and weight.

Another challenge was trading partner communi-cation. The process was very rudimentary, involv-ing telephone calls and e-mails, with minimal

communication via electronic data interchange(EDI). As a result, our client lacked visibility intotransportation execution events, as well as theability to react to them.

To resolve this challenge, we defined the carrierEDI processes, including EDI 204 (Carrier LoadTender), 990 (Carrier Tender Response) and 214(Load Execution Events). This resulted in completeautomation of the load execution process andeliminated the time-trap the client experiencedwith its transportation arrangement process.

Benefits

The program resulted in a multi-million-dollarannual savings in transportation costs. Qualitativebenefits of this program include:

• Faster upload of carrier rates into the TMS,amounting to about $36,500 in annual savings.

• Enhanced customer service (on-time and low-cost delivery) and reduction in transportationcosts through improved supplier compliance.

• Effective management of disparate sources ofrate information in a single place.

2case study

Validate Data(Postal, etc.)

Copy Data to Standard Template

Upload Data to Rate Repository

SMC3 RatingEngine

Transportation Planning &

Optimization

Transportation “What-If”Analysis

Freight/Supplier Compliance

Audit

PC Miler RatingEngine

Routing Guidefor Suppliers

Bid Tool

Rate Management

Rate Repository(TMS)

Carrier Rate Management Process

• Improved data quality due to minimal manualintervention.

• Improved visibility into events in real time. • Enhanced ability of the transportation controlcenter to proactively monitor and respond tocarrier events.

• Increased routing guide compliance with sup-pliers, conforming to the client's terms andleading to greater efficiencies. This hasaccelerated the realization of the solution’sbenefits.

• Centralized storage of transportation rate data,improving enterprise-wide transparency andvisibility for monitoring routing guide compli-ance.

• Improved measurement of carrier compliance.

As part of this program, we also introducedinnovative processes and technologies to ourclient’s internal IT organization. The internal ITorganization serves the needs of the client’sbusiness units, and we serve as its strategic ITpartner.

The client’s IT organization faced severalchallenges. For instance, over the years, thenumber of non-integrated applications andpackaged tools had grown, making it difficult tocreate an end-to-end process flow. The internal ITorganization was also facing difficulties integrating

and supporting legacy systems with packagedtools, resulting in high development and supportcosts.

With our experience delivering high-value/high-impact technology solutions to various bigcorporations around the world, we were able tointroduce innovate, sophisticated and easy-to-maintain technologies and processes to our clientIT organization.

For instance, we were instrumental in introducingJ2EE/Spring/AJAX to speed the client’s develop-ment process and ease application support. Wealso introduced IBM WPS and Web services tointegrate the custom applications and packagedtools that the client has amassed over the years.

Perhaps most significantly, all of our projectsexceeded the client’s quality evaluation process,and we were the only one of the client’s IT servicespartners to do so.

Our client received numerous benefits and valuesby partnering with us, including:

• Reduced time to market due to a shorterdevelopment and support life cycle.

• Portable, scalable, usable and supportableapplications.

• A service-oriented architecture that adheres

to its organizational standards.

case study 3

About Cognizant’s Man-Log Practice

Our Manufacturing and Logistics Practice hasdedicated industry specialists and technologyexperts who continually track and analyzemanufacturing industry trends to deliver qualitysolutions to clients. We have worked with severalorganizations to define IT roadmaps that improvesupply chain visibility and allow customers tostrengthen product development processes. Ourpractice is committed to leveraging its domainexpertise to provide business-aligned IT solutionsfrom conceptualization through implementationand maintenance.

At a time when companies are relentlessly pushingto compete better, move faster and fight harder,Cognizant is the global technology partner with asingle-minded passion: Dedicating our systemsexpertise, industry intelligence and globalresources to make your business stronger.

For more information on how to drive your businessresults with Cognizant, contact us atinquiry@cognizant.com or visit our Web site athttp://www.cognizant.com.

About Cognizant

Cognizant (NASDAQ: CTSH) is a leading provider of information technology, consulting, and businessprocess outsourcing services, dedicated to helping the world's leading companies build strongerbusinesses. Headquartered in Teaneck, New Jersey (U.S.), Cognizant combines a passion for clientsatisfaction, technology innovation, deep industry and business process expertise, and a global,collaborative workforce that embodies the future of work. With over 50 delivery centers worldwide andapproximately 111,000 employees as of March 31, 2011, Cognizant is a member of the NASDAQ-100, theS&P 500, the Forbes Global 2000, and the Fortune 500 and is ranked among the top performing andfastest growing companies in the world.

Visit us online at www.cognizant.com for more information.

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