Third-party logistics provider Transplace had a lot to prove when it was selected by Del Monte in April 2006 to manage the company's transportation and logistics operations. Del Monte, one of the country's largest producers, distributors and marketers of branded food and pet products, recently had ended another third-party engagement that "did not work out well for us," says Bill Pollard, vice president of transportation at the San Francisco-based company.
Pollard had joined Del Monte the prior January and his first mission was to "figure out what to do with transportation management." Taking the transportation function back in-house was considered, but was not a feasible option for several reasons. "For one thing, Del Monte doesn't have the systems to support bringing transportation management fully back in-house," says Pollard. "Second, when we did the first outsourcing, we had redeployed people involved in transportation management to other departments, so we didn't have the people. And we had a self-imposed time constraint that would not have let me address the first two issues within the time frame needed to make a change."
Del Monte ultimately selected Transplace, Plano, Texas, from a short list of three candidates because of its scale and depth of experience in transportation management, particularly in the truckload sector. "About 65 percent of our domestic transportation spend is TL, so somebody with scale and deep experience there was very important," says Pollard. A second deciding factor was technology. "We wanted a partner with systems capable of managing transactions as well as giving us visibility to what was happening," he says. "And, third, we wanted engineering capabilities that would enable our provider to work with us on network optimization studies and helping us find step-change improvement opportunities in our network."
Transplace has delivered on all counts, Pollard says. One key achievement was elimination of nearly 8 million miles from Del Monte's network. "This had a direct impact on costs as well as a direct impact on service, because we also reduced our average length of haul to customers by roughly 20 percent," he says.
Transplace also provides the visibility that Del Monte wants. "Through the Transplace Web interface and our EDI connections, we see updates to delivery appointments or delivery confirmations in our legacy system as soon as they are made in the Transplace system," says Pollard.
Transplace also provides "actionable analytics" that have directly resulted in service improvements. "My favorite example involves our largest customer," says Pollard. "We worked with a dedicated analytical resource at Transplace to help us improve our on-time performance to this customer. Over the course of a couple of months, this analyst was able to drill down into very granular information that was housed in the Transplace system to identify problem lanes and problem carriers. The Transplace operations group then made changes and our on-time delivery to that customer is up 700 basis points, year-on-year. That is a really significant improvement." Particularly satisfying, says Pollard, is the service recognition Del Monte has received from this as well as other customers.
Del Monte's relationship with Transplace now has matured to a point "where we are starting to share information with each other beyond trucks and trains," says Pollard. Transplace, for example, is involving some of Del Monte's people in a Six Sigma process improvement project. "And we are trying to expose Transplace people to different parts of our organization, such as sales, inventory planning, demand planning and manufacturing," Pollard says.
"We are starting to see each other as family-related by marriage but not by blood," he says. "It's a good relationship and we both agree there is still plenty of upside stuff to work on."
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