Managing Complex Freight Rate Structures with Ease
Toward the end of 2019, Kellogg’s, the beloved global cereal brand, started a new process to optimise their logistics set up. A long-standing Transporeon customer, Kellogg’s wanted to explore the potential of the latest technologies available from Transporeon. Although they were using Time Slot Management and Transport Assignment, there were some processes and systems that could be used differently to support of full optimisation.
Analyzing the Situation
When Arturo D' Errico, E2E Performance Manager at Kellogg, took on the project, he first analysed the situation in order to understand what Transporeon was able to deliver and then set up a three-year roadmap, broken down into individual steps. His plan was approved by the board and officially kicked off in January 2020 with the first go-live steps in April.
Aligning the processes and bringing them into sync
The first big change was to align the Transport Assignment, so it runs efficiently with the automated transport allocation No-touch Order and Best Carrier spot bidding. Together, these additions help Kellogg’s ensure market transparency, cover needed available capacity, and assign shipments to a specific carrier using fully automated shipment execution.
Gaining visibility of distribution costs
The second big change that Arturo made was to introduce Rate Management to help Kellogg manage the pricing structures for freight rates. As is the case for many global companies, Kellogg had challenges in gaining full visibility — and thereby control — of their distribution costs due to the complex nature of operations and freight pricing. However, with the introduction of Rate Management Kellogg now have quick access to costs and can clearly see how their distribution costs are split by region, service, and so on.
“It took so much time to crunch data,” said Arturo. “Now all this information is readily and easily available. Rate Management supports improved transport assignment and ensures that the right carriers are used for the right transport volume as determined by their quota.”
Almost immediately after implementation, Rate Management began delivering prices with 99.98% accuracy — and the 0.02% failure rate is process-dependent, not system-dependent.
Shut down but not delayed — thanks to teamwork
Though this of course wasn’t planned, both of these go-lives took place remotely during the pandemic. Still, everything was able to be done remotely without delays thanks to short, frequent meetings which were problem-solution oriented. This is a testament to the close working relationship Kellogg’s has with Transporeon — the two teams were able to work efficiently together to solve problems and identify solutions, even at a distance.
The future is real-time enabled
Looking ahead, Kellogg is working to gain complete real-time visibility of all their transport flows.
“Real-time visibility is important because, as a shipper, once a transport is on its way, you can’t control it anymore,” said Arturo. “If a truck arrives three hours late without prior notice, most of the time it cannot be unloaded at arrival. This generates costs for everyone involved, and the goods recipient is unable to plan his resources.”
Right now, Kellogg’s is onboarding real-time visibility-enabled carriers. Already the first transports are being successfully tracked. The ultimate goal is to track all intercompany transports as well as domestic and key international transports in the UK, Spain, Belgium, and Poland.
One tool Transporeon has provided is a shareable link that can be sent to customers to track expected goods. This enables Kellogg’s customers to autonomously and efficiently plan resources in their warehouses by live-tracking the vehicle and monitoring the continuously updated ETA.
“Being able to generate a link to send to customers so they can track the goods they are expecting is amazing,” said Arturo. “I’m very much looking forward to seeing additional benefits from full real-time visibility implementation and passing those on to our customers.”
Stay tuned! The second part is coming soon.