Idahoan’s Journey to Achieving Sustained Transportation Savings

In their quest to achieve sustained transportation savings, many companies are leveraging both technology and managed services from third-party logistics partners. Idahoan is a great example. The company, a leading manufacturer of dehydrated potato food products, is working with TranzAct and using its Constellation transportation management system (TMS) and managed services to meet its transportation goals and requirements. Cameron Kelsey, Transportation and Inventory Manager at Idahoan, was my guest on Talking Logistics recently where he shared some insights and advice on the company’s journey to achieving sustained transportation savings.

“One of the goals we had was to have a system that could help us make the right routing decisions looking at both cost and service,” explained Kelsey. “We also wanted a system that could automate a lot of the more administrative tasks, like tendering to carriers, paying invoices, and checking up on loads. As we looked at establishing a partnership, there were a few attributes we were looking for in a partner. We wanted someone who was an extension of us. When you think of a third-party logistics provider, sometimes you worry that they won’t care about your business as much as you do, so we wanted a partner who cared and knew about our business as much as we did. We also wanted someone who felt comfortable making decisions and executing them and bringing us into any exceptions or issues that came up along the process.”

Kelsey highlighted several important capabilities they were looking for in a TMS, including waterfall tendering to carriers, self invoicing, visibility, and dock scheduling.

With regards to visibility, “a key report for us is carrier on-time performance since we are heavily scorecarded in the food industry,” said Kelsey. “We also get a lot of reports on accessorials, like detention fees and insight into which consignees are causing a lot of detention for us. We use all of this visibility [to track cost and service performance relative to plan] and to provide our carriers and customers with data to drive continuous improvement.”

Mike Regan, Co-Founder and Chief of Relationship Development at TranzAct, shared some additional insight into why there’s growing demand for visibility and business intelligence capabilities from shippers:

“Part of it is being fueled by some of the demands that retailers are putting on manufacturers. For example, Walmart and Target have tightened up their delivery time windows, so now carriers have a very narrow time window to arrive at a facility. If a carrier gets there 2-3 hours before the window opens, he has to sit and wait, which is why some shippers are getting pushback from their carriers about delivering to certain consignees.

One of the ways visibility helps is by providing shippers with info about when a truck actually shows up, what happened when it got there, what’s happening with the truck while the goods are in transit, and as we move forward we’re going to see a lot more focus and emphasis on visibility, down to the carton and SKU level, as customers place greater demands on shippers. It used to be you could just show up within a certain time period and everything was cool, but today it’s a lot different.”

Kelsey also shared some interesting insights on dock scheduling. Watch the short clip below where he discusses the challenges Idahoan faced before using the Constellation TMS and the benefits they’re now achieving.

“We have several local warehouses and prior to having the dock scheduling solution, carriers would have to call a warehouse to make an appointment,” explained Kelsey. “But the corporate office also wanted to know when trucks were coming in, so we would share spreadsheets around and it was a very confusing process…If you look at a two-pick load, a carrier might call the first warehouse and get an appointment and then call the second warehouse but that appointment doesn’t work for them. With the dock scheduling solution, a carrier can go online, make appointments at both facilities, escalate to us if there are any issues, and do all of that work without us having to have clerks sitting at every warehouse waiting for them to call.”

So, what advice would Kelsey give to other shippers who are just beginning their journey to improve their transportation performance?

“My advice is to take an honest look at how you currently manage your transportation operations. If you’re still picking up the phone to call a carrier to see if they can pick up a load, or if you still have clerks taking appointments by phone, or if you’re paying paper bills — those are all very expensive activities. Change is hard, but if you take an honest look at what you’re doing today, you will realize that a good TMS can not only help automate a lot of these administrative tasks, but also provide the visibility to improve your business.”

I encourage you to watch other clips from my conversation with Cameron and Mike for additional insights and advice on this topic, including segments on how self invoicing saved Idahoan time and money and how to find the right TMS and managed services partner. Then post a question or comment and keep the conversation going!