ChemPoint.com, an e-distributor of chemicals, found its growing business outstripped its ability to provide visibility into shipments that customers demanded. It found the right provider to manage its complex transportation needs.
Q: How much business is too much business? A: Wrong question. It's not the amount of business that can be troublesome but the complexity created. That's what can bedevil company processes, siphon employees' time and energy, and lead to customer dissatisfaction.
Ask Jeff Trimble. He's vice president of operations and technology at ChemPoint.com, an e-distributor of specialty and fine chemicals that handles more than 100 product lines for more than 13,000 customers worldwide. Clearly that's an impressive growth arc in its relatively short life of 11 years. But moving that much product for that many enterprises that much distance can get quite complicated.
Trimble: "Well, to sum it up, complexity was our challenge. We had grown so much that by 2007 we had reached a point where our processes around transportation were very time consuming and complex. Our communication was less than optimal, and we weren't always finding the best solution for moving a product from the warehouse to a customer."
Much of the burden fell on the customer solutions team: working with routing guides, weighing national carriers vs. regional transportation operators, trying to divine the "who did what better where" question given the particular service need.
The job, and the attendant headaches, kept growing. Illustrating the myriad details that had to be dealt with, Trimble says: "Do we need a freeze-protect truck or one with a lift gate? This carrier might be the best one to get from point to point, but they don't do lift gates very well, so I need to go find a different one."
The inability to verify that shipments went out timely was one of the greatest problems, and one that had multiple ramifications. Not only were customers inconvenienced but it delayed ChemPoint's invoicing process. And time, always a precious commodity, could be entirely wasted. Trimble says, when customers asked where their shipment was, you could spend a couple of days tracking that information, and when you got back to them, you might find that they had received it the day before.
And the quality of the carrier selection? "We could have made better choices in freight spend, but in a real-time world of getting things processed and out the door, we just couldn't see things clearly."
So, the challenges were crystal-clear: Lack of visibility into shipments status created significant extra work. Transit time metrics and service levels at times were inconsistent and unpredictable. And carrier service levels and rates sometimes varied.
So ChemPoint decided to explore outsourcing. It needed a 3PL, but it needed to exercise care in that selection. After all, transportation and supply chain execution are extensions of a shipper's brand. ChemPoint needed a provider with the right blend of industry, people, process and technology.
It had worked with C.H. Robinson Worldwide previously, using its services from time to time on some inbound shipments. But the 3PL was more of a carrier choice than anything else at that point, says Trimble. "It wasn't a partnership. It wasn't really an outsourced relationship."
But it was an introduction, so C.H. Robinson was in the mix of providers considered for the collaboration that ChemPoint had in mind. Following the vetting process, Robinson emerged with the contract for a number of reasons. Certainly, technology was important, says Trimble. So was the "cultural fit" between it and ChemPoint. A third, and very important, factor was like minds on strategic control. Obviously the provider is tasked with keeping transportation spend manageable, but "we maintain final decision in terms of scope, not necessarily striving toward the lowest possible cost but the optimal cost for the customer service level required."
What a difference a partnership makes. The routing responsibilities were lifted off the shoulders of the customer solutions team. Now, C.H. Robinson receives the order, then matches customer requirements and needs with distribution capabilities from point to point.
The partners started with a pilot in one warehouse, and within 60 days it was determined to expand the relationship to the entire ChemPoint network, which involves more than 20 warehouses in North America and Europe.
Now the e-distributor is able to invoice quicker, the importance of which can't be dismissed. But, says Trimble, it is even more important that his company now has the visibility to tell customers when shipments will be received.
"To be able to build a proactive shipment confirmation that we could email to customers saying that the shipment went out and when, with which carrier - so that customer could track it and see it's on its way. That's a nice benefit for the customer base. The benefits from that would be huge."
The positives extended internally as well, Trimble says. First, he estimates that the productivity of the customer solutions team has risen by about 25 percent. Moreover, there has been no need to change headcount. The business continues to grow, according to Trimble, but the staffing was and is "small."
In fact, he says, before C.H. Robinson was engaged, ChemPoint seriously considered building an in-house transport team, but those plans went by the wayside once the 3PL came on board. The ChemPoint customer solution team "owns" the relationship with the provider, but Trimble describes it as more high-level management than actual day-to-day tactical activity.
The provider's take on things? ChemPoint's order flow was challenged, says Bruce Gustas, general manager at C.H. Robinson Worldwide. It was "reactionary" to transportation needs. Efficiency and direction would require innovation and rethinking the entire process so the correct parties were always informed of what was taking place.
Now that C.H. Robinson handles all of ChemPoint's outbound, from public warehouses to the end customer, there is continuous improvement in the information flow, data integrity and transportation metrics, Gustas says.
"Communication has become almost real-time. They can invoice a heck of a lot quicker. Accuracy is better. That means, in LTL, being able to validate shipment size, quantity and so forth, so they don't have to go back and do things two and three times."
Gustas clearly feels ChemPoint has realized overall cost improvement. "The hard-cost side of that is that they are more competitive; the soft-cost side is internal because their productivity is up."
Wearing his salesman's hat, Gustas says the provider follows a methodology it calls the 'Four I's" - something it brought to the partnership with ChemPoint. Briefly, they are to investigate the current state of a customer's transportation situation; innovate a future state; integrate needed systems and processes; and, finally, continuous improvement must be built in.
"It's the foundation of our program and what we've done with ChemPoint."
Final word is Trimble's: ChemPoint's transportation often was needlessly costly. "You know you might have to take a drum of material and fly it first-class to get it to the customer on time. Those things came down dramatically, and that had a big impact on the bottom line."
C.H. Robinson Worldwide
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