It goes without saying that you are buying potential trouble when you manually manage your transportation. Mistakes, such as double invoicing, can go undetected. Over time, errors like that can add up to huge sums. They are much easier to identify and correct when you move to a sophisticated, automated transportation management system.
M&G DuraVent, one of the premier companies of the venting industry, learned that fairly quickly. Within a few short months of automating its processes, it pinpointed tens of thousands of dollars’ worth of overcharges from various carriers, says Jack Hines, director of distribution.
M&G DuraVent traces its lineage back 50 years to the Netherlands. Over the years, it has innovated and introduced a number of products to the HVAC, chimney and hearth markets. Among other things, it makes the chimney and bathroom sheet metal vents and pipes that are sold at Home Depot and other building products retailers.
The manufacturer, which uses SAP for its enterprise resource planning/warehouse management system, needed a transportation management system to manage and automate its less-than-truckload and truckload shipments.
The company utilizes as many as 16 LTL carriers, Hines says, where the lowest-cost carrier can be hundreds of dollars cheaper than the No. 2-12 carriers in each lane. M&G DuraVent went live with Cloud Logistics in early April 2015 to handle its carrier selection process. The carriers are tendered via EDI 204 and tracked through EDI 214. The match-pay process is managed via EDI 210 electronic invoice messages.
Cloud Logistics’s offering includes a patent-pending configurable workflow architecture, customizable alerts, dynamic dashboard widgets, and ad-hoc reporting, all delivered in a cloud-based network. Social technology for business allows each person involved with an order or shipment the ability to attach documents, claims photos, and proof of delivery signatures within a private secure community.
“When we first created Cloud Logistics, our goal was to compress the average project cycle time from months to weeks to days,” said Mark Nix, chief executive officer of Cloud Logistics. “This new offering shows that we surpassed that goal and can now help customers start saving on the first day.”
Last year, the provider introduced Same Day TMS, designed to get users up and running in one day. It offers the same features that any shipper would expect from a transportation solution, including freight rating, carrier selection, load tendering and visibility as well as match pay. The solution provides communication with the nearly 1,000 carriers already on the Cloud Logistics network via the Carrier Portal. Additional capabilities, such as mobile, a vendor portal and 3PL billing are also available to the shipper and can be deployed shortly after go-live.
Hines Joined DuraVent after it was decided to partner with Cloud Logistics, but he is well aware that after the company decided to drop manual management, the system DuraVent initially employed was hardly sophisticated.
“They were using an outside source, but it wasn’t optimal,” he says. “It would just go out and get your quotes online; it could only do TL, it couldn’t do a mix of your transportation needs. Going to Cloud Logistics was a smart move on their part.”
Hines declines to characterize DuraVent’s transportation scenario as highly complex. “I wouldn’t say that. We just want to get the best rates and the best lanes, and Cloud picks that for you.”
That can’t be overstated. As the company moves product from its manufacturing plants in Canada, New York State and California to various DCs and then on to customers, having complete visibility to lanes and pricing is invaluable.
However, the billing and invoicing process, enabled by Cloud’s technology, is truly key, Hines says.
Again, every process, including accounting, had been performed manually before. “We would still pay things electronically, but none of the invoices came in that way.”
“Now, if there’s an issue, if a carrier tries to double bill us or if there is a weight discrepancy, for example, we can check into it so much easier. I can go in and look at things daily, along with everything else that I do, and it’s easy.”
In fact, the accounting process has been so streamlined that two people in that department have been reassigned, he says.
The beauty of the partnership, as Hines sees it?
“Basically, it allows us to put all of our freight out there for bid, at least with TL carriers,” he says. “As far as LTL goes, we negotiate our own rates. We put our own tariffs into the Cloud program, then it tells us who has the best rate, whether we’re shipping from California, New York or wherever. It tells me the cheapest rates, not necessarily the best, but it gives me options, and that’s important.
“But what’s key is that it tells me if there’s a problem with an invoice,” Hines stresses. “So now, instead of the old paper invoices and saying -- how do we verify that was what we were quoted when we shipped it? – now we know. With the EDI version coming in, we see our rate quote up front. We know what our price should be.
“That means when the LTL or TL carriers bill us, either through the Cloud Logistics portal or by EDI, if the prices don’t match what we were quoted when we sent the shipment, it goes to an issues tab. Noting gets paid until we can verify what happened. Was there a weight discrepancy, did they try to bill us twice, was there a lift gate charge added on? It gives us a chance to investigate everything versus just paying blindly whatever the invoice says.”
By way of illustration, Hines says 10 questions appeared in the issues tab in the time that a reporter spoke with him for this article. “In the past, people probably just paid it when it came through because they had nothing to verify it.”
How much money has the system saved M&G DuraVent? In the tens of thousands, by Hines’s reckoning. Some discrepancies result from honest mistakes, others occur because partners aren’t necessarily reliable in their own accounting. In either event, Hines says his manufacturing company is ahead of the game.
Timely, incisive articles delivered directly to your inbox.