Rock-Tenn Company is one of North America's leading manufacturers of paperboard, containerboard, packaging and merchandising displays with annual net sales of $3bn. Its 9,500 employees operate a total of 92 facilities in 26 states, Canada, Mexico, Chile and Argentina. This network of plants house state-of-the-art equipment that provides low-cost, innovative solutions to its customers. As a result, the company has recently racked up record revenues and earnings that allow it to grow rapidly both organically and through acquisitions.
Transportation is now a vital part of the company's on-going success, but according to Ben Cubitt, Rock-Tenn's vice president of supply chain, that has not always been the case. Until fairly recently, each of Rock-Tenn's many plants and converting sites independently handled its own freight, from carrier and mode selection to scheduling and billing. Some of these sites had employees managing freight full time, while in others, customer service representatives or other staff handled transportation in addition to their other responsibilities. No standardized transportation management practices were followed, and no carrier performance or key performance indicator monitoring was required.
"The lack of freight visibility across the national network prevented Rock-Tenn from recognizing and taking advantage of milk run routes, backhauls and similar optimization opportunities," says Cubitt.
The Norcross, Ga.-based company is highly integrated. For example, the waste division sells paperboard from the mills to its folding carton and corrugated divisions making it one of the leading recyclers in the industry. However, integration in the transportation function has lagged behind other company operations. Truck drivers that delivered to a paper mill rarely carried a load back out. In addition, inconsistent expertise and reliance on manual processes exacerbated the inefficiencies of the existing system.
Rock-Tenn defined its goal as migrating from a daily-shipment model to a transportation optimization model using a transportation management system enabled load control center (LCC). With a transportation management system to automate planning, scheduling, optimization, execution and reporting, and an LCC to provide national network visibility and robust computerized decision support, Rock-Tenn would be well-equipped to leverage total freight spend, facility adoption of best practices and drive strategic cost saving initiatives.
After analyzing the capabilities of several potential providers, Rock-Tenn chose Transplace. According to Cubitt, the company based its decision on four factors:
1. Transplace offered a strong TMS that included all the technology Rock-Tenn considered essential to meeting its optimization objectives
2. Rock-Tenn was sold on Transplace's unique freight allocation module (FAM) tool for supporting carrier optimization by identifying capacity and transportation partners
3. Rock-Tenn wanted the support of an LCC, but did not desire to be a pioneer in that area
4. Rock-Tenn felt confident that Transplace would support and add value to its change management strategy.
The benefits of implementing the Transplace TMS are measurable, according to Cubitt. Rock Tenn can now track on-time delivery and pickup as well as monitor and improve performance and customer satisfaction levels.
"Pre-TMS, we had to rely on anecdotal rather than statistical evidence to identify poorly performing carriers," says Cubitt. "Our key performance indicator metrics give us strong ammunition now to go back and demonstrate with facts when certain carriers are not performing."
The FAM tool is uniquely architected to support Rock-Tenn's key goals. Cubitt says that his team is using it aggressively every day, which allows the transportation department to determine lowest-cost capacity per load and per lane.
"The FAM tool from Transplace has reduced costs significantly," says Cubitt. "Also Transplace's routing technology enables us to direct more freight to our preferred carriers, contributing to cost savings."
Transplace's LCC supports comprehensive shipment management from order placement to delivery. It also promotes continuous improvement through accurate and timely reporting. Outsourcing to Transplace versus building its own LCC was the right decision for Rock-Tenn, which continues to move forward with the TMS rollout schedule that's expected to be completed by year end.
"Our partnership with Transplace continues to add value and provide superior support, accelerating the transformation from daily shipping to true transportation management," says Cubitt. "We have global visibility, which makes us much more efficient, we are able to move from reactive to proactive. This capability helps Rock-Tenn create an effective strategy to drive maximized performance."
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