DR Power Equipment / Country Home Products Inc. manufactures and markets high-end outdoor power equipment and home and garden accessories under the global DR Power and Neuton brands. Its outbound less-than-truckload (LTL) shipping volumes range from 30,000 to 35,000 shipments a year, while small package volumes range from 195,000 to 225,000 shipments per year. A large percentage (95%) of deliveries are direct-to-consumer, managed by six primary trucking companies that the company relies on for U.S.-based deliveries. DR Power Equipment/Country Home Products was using manual processes for its freight audit and approval functions. Not only was this time consuming, it also created the potential for errors. As the company’s operations grew, it needed a transportation management system (TMS) that would streamline administrative processes, reduce costs and improve overall supply chain management efficiency.
Challenge
After several years of sustained growth, the company found that using manual processes for certain logistics and related financial reporting was becoming a challenge. “We knew we couldn’t use manual processes for dealing with logistics-related transactions and finding ways to reduce our annual transportation costs,” said Steve Charles, the company’s Manager of Traffic & Logistics.
Charles said the company was facing three major business challenges. The first was time. “It was a time-consuming process to manually audit, approve/reject and pay carrier freight invoices. This also increased the potential risk of freight overcharges/payments.”
The second was visibility. “There was no way to tie the freight cost to the order at the product level, or to be able to analyze the data,” explained Charles. “When we entered an order for a customer, we didn’t know the actual revenue we were generating because costs, such as shipping, were not tied to the order.”
The third challenge was human resources. Staff members were spending so much of their effort on freight audit and approval processes for invoices that they weren’t available to handle more value-added supply chain management functions, such as cost negotiation, cost reduction/control, improving delivery and carrier evaluation.
Solution
The company implemented freight audit and approval software from the Descartes transportation management system (TMS) to automate paper-based processes, as well as integrate freight costs and other metrics to its ERP systems for improved reporting.
Results
- One full-time staff allocated to another department ($40,000 a year savings)
- Time spent on freight audit and approval reduced from seven hours to 20 minutes a day
- Elimination of paperwork for 200 invoices a day through automated processing
- Carrier invoice error rate reduced to less than 1%
- Recovered about $100 per day in carrier overcharges
- Improved financial reporting
- Ability to ensure optimal pricing from suppliers