Collaborative Transportation Management

Collaborative Transportation Management

What, Why, and How?

Joel SutherlandManaging Director

Center for Value Chain ResearchLehigh University

[email protected]

2

Table of Contents – CTM White Paper

Chapter 1:CTM Introduction and Executive Overview(What is CTM?)

Chapter 2:Business Case for CTM(Why do it?)

Chapter 3:CTM Process and Enablers(How to do it?)

Chapter 4:Guidelines for Adopting CTM(Getting Started)

3

• Collaboration is much more than cooperation…

– All parties work actively together towards common objectives

– Cultures are meshed

– Everyone involved must benefit

Leverages the Power from Uniting as True Trading Partners

What is CTM?

4

Eliminate inefficiencies in the transportation component of the supply chain though collaboration

to bring benefit to all trading partners

Overall CTM Objective

What is the Objective of CTM?

What is CTM?

5

CTM Eliminates Inefficiencies (“Waste”)

ECRECR

JITJIT

JIT IIJIT II

VMIVMI“Lean”“Lean”

CPFRCPFR

“Pull”“Pull”

WasteWasteIPCIPC

Time

Motion

Inventory Errors

Space

SixSigma

SixSigma

TQCTQC

What is CTM?

6

… It is a Holistic Process

Private Marketplace

Private Marketplace

RateNegotiation

RateNegotiation

Inbound Management

Inbound Management

RoutingGuide

RoutingGuide

StandardBOL

StandardBOL

DockScheduling

DockScheduling

Continuous Move

Continuous Move

AppointmentScheduling

AppointmentScheduling

YardManagement

YardManagement

CollaborativeLTL

CollaborativeLTL

ModeshiftingMode

shiftingTerms

ConversionTerms

Conversion

What is CTM?

BackhaulBackhaul

ReengineeredBusiness Process

ReengineeredBusiness Process

7






8

Proactive: A firm’s strategic intentions, such as a desire to share risks, pool resources, and increase asset utilization

Reactive: External market-driven forces such as competitive threats and current trends

AMR Research reported that…

“business trends such as mass customization and e-commerce are forcing manufacturers and retailers to shorten planning cycles, re-plan and reallocate on

the fly, and expedite execution.”

It is recognized that transportation has become a critical opportunity in these processes which, if managed collaboratively, can eliminate cost and service inefficiencies and ultimately support the competitive effectiveness of firms in

today’s constant-evolving business market.

AMR Research reported that…

“business trends such as mass customization and e-commerce are forcing manufacturers and retailers to shorten planning cycles, re-plan and reallocate on

the fly, and expedite execution.”

It is recognized that transportation has become a critical opportunity in these processes which, if managed collaboratively, can eliminate cost and service inefficiencies and ultimately support the competitive effectiveness of firms in

today’s constant-evolving business market.

Do you want to be a Leader or a Follower?

Why do it?

9

Time

Fleet routing and scheduling

Shipment and carrier management

ROA Impact

CTM Value Increases with Planning Time

Transportation procurement

Supply chain strategy/ Network design

Transportation planning and modelingOperational

(Days)

Tactical(Months)

Strategic (Years)

?

Why do it?

10

CTM has the Potential to Improve Profits and Leverage Assets

CTM Opportunity

Improved Profitability

Improved Balance Sheet Performance

Increased Sales

Reduced Costs

Improved Transportation

Asset Utilization

Inventory Reduction

Improved DSO

Comments

• CTM enables improved service levels and on-shelf availability across the board

• Shippers and carriers with CTM capabilities become "go-to" parties for major retailer events

• Opportunities exist to minimize/eliminate costs associated with miscommunications across the extended supply chain, e.g.:

– Expediting/last minute shipping – Poor truck utilization – Freight bill and shipment administration

• Collaboration facilitates better use of transportation and warehousing assets for all participants, e.g.:

– Continuous moves– Shared warehousing – Fewer fixed assets

• The ability for participants to take a system-wide view of supply and demand minimizes unnecessary inventory

• Better communication between partners creates the opportunity to reduce DSO

Why do it?

11

Metric Documented ResultsReduced transportation costs • 3% to 20+% reduction

Increased asset utilization • Deadhead reduction 16% to 3% • 25% improved private fleet utilization

Improved service levels • 98+% on-time performance (varies based on definition)

Increased visibility • 100% visibility by SKU from load tender to delivery

Improved end-customer satisfaction • Increased “perfect orders”: complete order; correct items; damage free; delivered on-time; billed correctly

Increased ability to grow business • 50% inventory reduction• Working capital freed up for business growth

Documented CTM Results

Why do it?

12

Description

Periodic process between a shipper and a carrier to arrange for transportation capacity -- may include the use of a transportation marketplace

Proactive control of inbound goods flow and management of transportation by the receiver

Aggregating truckload freight across multiple locations or divisions of a company or across multiple shippers

Ability to solicit capacity from other select/core carriers

Collaborators Transaction Area

Capacity Procurement

Inbound Management

Integrated Movements

Transportation Marketplace

Shipper Carrier

Shipper

Carrier

Receiver

Shipper

Carrier

Receiver

Shipper

Carrier

Why do it?

CTM Opportunities Exist Across Four Key Transaction Areas

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Source

Example Opportunities in a CTM Initiative: Carrier – Example –

Wal*Mart/JBHunt/P&G Pilot

Wal*Mart/JBHunt/P&G Pilot

NistevoAutoZone reported 25% improvement

Best Buy

Team Estimate

Team Estimate

Results Achieved/Estimated

Single integration point for trading drives savings of $5,000 per transaction/ customer

Difficult to quantify but logically collaboration experience/capabilities would drive buyer preference

Opportunity

Improved Asset Utilization

Fleet Utilization

Better Use Of Human Resources (e.g., Drivers)

Reduced Administrative Expenses

Increased Sales

20%15%

(% Dead Head Miles)

12% 17%

15% improvement

33

(Dwell time Per Week/Truck)

28

15% improvement

60%

(% Truck Fill)

80%

33% improvement

100%

OTR Driver Turnover

85%

15% improvement

Source: CTM Case Studies; Team Analysis

Why do it?

14

Source

Example Opportunities in a CTM Initiative: Shipper – Example –

AutoZone

Team Estimate

Team Estimate

Best Buy Pilot

Best Buy Pilot

Results Achieved/Estimated

Improved internal planning has potential to reduce need for premium freight by over 20% and opportunity to consolidate loads from LTL to TL can be significant

Early planning and visibility reduces need for detention -- LTL to TL dramatically reduces damage due to less handling

Opportunity

Reduction In Freight Costs

Reduction In Administrative Costs

Reduction In Damaged Product

Improved On-Time Performance

Increased Sales

10%8%

Administration as a % of Transportation Expense

4% 8%

20% improvement

Significant improvements in on-time performance are achieved -- Best Buy pilot reported a 35% improvement

100%

123%

23% improvement

Sales


Why do it?

15

Source

Example Opportunities In A CTM Initiative: Receiver – Example –

Best Buy Pilot AutoZone experienced a 50% improvement

Best Buy pilot

Best Buy Pilot AutoZone transit time reduced from 7 days to 1.5 days (average)

Team Estimate

Results Achieved/Estimated Opportunity

Inventory Reduction

Improved On-Time Performance

Order Lead Time Reduction

Reduced Administration Costs 10%

(Days On Hand)

8%

20% improvement

5%

4%

50% improvement

12.3

6.5

(% On-Time)

110% improvement

(Lead Time -- Days)

10% improvement

18.8

16.9

(% Admin Costs)

32.1%

67.4%


Why do it?

16

Strategic Profit Model

Sales

Cost Of Goods Sold

Direct Expenses

Indirect Expenses

Inventory

Accounts Receivable

Other Current Assets

Gross Margin

Total Expenses

Current Assets

Fixed Assets

Total Assets

Sales

Sales

Net Profit

Net Profit Margin

Asset Turnover

Return On Assets

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

%

.

% Times

Net ProfitNet Sales

Net SalesTotal Assets

-

+

+

+

-

+

÷

÷

Net ProfitTotal Assets

Converting the Benefits of CTM to “C” Level Metrics

Increased Sales

Reduced Costs

Improved Transportation

Asset Utilization

Inventory Reduction

Improved Days’ Sales

Outstanding

– Example –

Why do it?

17

Indirect Expense

Sales

2000

300

1500

100

400

100

100

500

400

600

400

2000

1000

5%


-

+

++

÷2

100

10%

2000

Sales

Cost Of Goods Sold

Direct Expense

Inventory

Accounts Receivable


Gross Margin

Total Expenses

Current Assets

Fixed Assets

Total Assets

Sales

Net Profit

Net Profit Margin

Asset Turnover

Return On Assets

Times

Net ProfitNet Sales

+

-

÷

CTM Financial Impact: Base Case – Example –

Why do it?

18

Indirect Expense

Sales

2005

297

1485

100

396

99

100

520

397

595

400

2005

995

6.13


-

+

++

÷2.02

123

12.36%

2005

Sales

Cost Of Goods Sold

Direct Expense

Inventory

Accounts Receivable


Gross Margin

Total Expenses

Current Assets

Fixed Assets

Total Assets

Sales

Net Profit

Net Profit Margin

Asset Turnover

Return On Assets

Times

Net ProfitNet Sales

+

-

÷

CTM Financial Impact: A 0.25% Improvement in Sales, 1% Reduction in Costs, Asset Utilization, Inventory, and DSO Drives Significant Gains in ROA

23.6% Improvement in ROA

– Example –

Why do it?

19






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The Investment Required to Capture the Opportunity is Mostly the Resource Time Required for Culture Change

Investments Required

People

Capital

This is in most cases the most significant investment -- resources and commitment are required to build internal readiness for CTM and to create the collaborative culture within and between parties

Assets

In most cases no additional assets are required, assuming sufficient information system infrastructure to capture and process needed information

Some funds may be required in the testing phase, but can be limited by ensuring a tightly scoped pilot

How to do it?

21

Information Technology is Essential to CTM

Advanced technology is essential to successful CTM playing three important roles:

• Enables CTM by providing the necessary tools to make collaboration feasible e.g.:

– Real-time data transfer; automated communication

• Supports collaborative inter-organizational relationships e.g.,

– Reduction of transaction costs/risks with automated process

• Provides the opportunity for outsourcing of core logistics processes between CTM logistics partners

Advanced technology is essential to successful CTM playing three important roles:

• Enables CTM by providing the necessary tools to make collaboration feasible e.g.:

– Real-time data transfer; automated communication

• Supports collaborative inter-organizational relationships e.g.,

– Reduction of transaction costs/risks with automated process

• Provides the opportunity for outsourcing of core logistics processes between CTM logistics partners

Information technology (IT) by itself is not enough to lead to successful collaboration. Firms must know how to use IT to reap the benefits of CTM. Human contribution, through data analysis and information utilization, is where the true benefits of IT lie. Therefore, the enabling and supporting role of IT to CTM processes can only be realized if the technology is employed effectively

Information technology (IT) by itself is not enough to lead to successful collaboration. Firms must know how to use IT to reap the benefits of CTM. Human contribution, through data analysis and information utilization, is where the true benefits of IT lie. Therefore, the enabling and supporting role of IT to CTM processes can only be realized if the technology is employed effectively

Role of Information Technology Comments

Human contribution, through data analysis and information utilization, is where the true benefits of IT lie.



How to do it?

22

Transportation Best Practices are Separate from CTM but Create the Needed Foundation for CTM

Transportation Best Practices

• Increase operational control and centralize transportation management

• Establish a Core Carrier program; rationalization and reduction

• Institute proper contract terms and conditions

• Optimize daily transportation plan: Consolidation (economic loads) and selecting lowest cost carrier

• Implement Electronic Tendering

• Implement Shipment Status Reporting and Visibility for orders, shipments, and inventory

• In-source Freight Payment; implement Self-Billing– Eliminate freight bills for contract carriers; pay on agreed milestone/timeframe

• Establish concise KPIs & Metrics; insure compliance– Implement trading partner report cards & quality reviews– Establish Continuous Improvement programs

• Implement accurate freight cost allocation and cost/unit reporting

• Implement Transportation Financial Analysis

How to do it?

23

Shipment characteristics

Shipment tendering results

In-transit shipment information

Actual pickup and delivery times

Claims information

Freight payment information

Key Data Element To Collect

Assess actual vs. planned for key performance metrics:

• Forecast accuracy • Capacity utilization • On-time shipment availability

Measures carrier responsiveness and ability to provide equipment

Enables visibility to potential late shipments

Insight into on-time pickup/delivery, carrier dwell time, dock availability, and loading/unloading times

Assess carrier performance; better determine value of goods damaged or lost in-transit

Measures accuracy and timeliness of carrier settlement

Comments

Key Data Collection/Sharing Creates a Collaborative Resource

How to do it?

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3 Distinct Components: Strategic

All Parties define:

• Scope: Steps, measures, terms, and protocols that define the nature of the collaboration

• Goals: Specific benefits that the collaboration is expected to deliver

• Specific process steps • What data will be shared and how • Freight terms, geographic scope • Distribution strategies • Exception management protocols • Perf. metrics, how benefits will be

shared E.g.:

• Reduce costs by X%• Improve on-time delivery by Y%

Operational (Manage Actual

Shipments)

Tactical (Plan for Transportation

Equipment Needs)

Strategic (Define the Relationship)

Phase 1 Phase 2 Phase 3

How to do it?

25

Three Distinct Components: Tactical

• All parties share a shipment forecast – Developed from the initial product

order forecast– Leverages pre-determined load

building strategies• Responsible Partner addresses load

building and carrier assignments • Carriers review shipment forecast and

plan equipment • If capacity is unavailable, exception

management protocols are used


Shipments)


Equipment Needs)

Strategic (Define the

Relationship)

Provides advance look at expected shipping volumes to help carrier(s) anticipate future equipment demands by

Potential resolution scenarios include:• Changing delivery requirements on some

shipments • Using pre-specified alternative carriers • Using public marketplace/exchange

Phase 1 Phase 2

Phase 3

How to do it?

26

3 Distinct Components: Operational

Planning, executing, and accounting for actual shipments

• As firm orders are placed, plan shipments using optimal distribution strategies

• Carriers will receive electronic load tenders and employ agreed upon exception protocols, if capacity-constrained

• Schedule appointments and reserve shipping/receiving resources

• The shipper prepares ASN, Shipment status documents prepared by carrier

• Freight accounting processes are employed as planned


Shipments)


Equipment Needs)

Strategic (Define the

Relationship)

Unlike most current processes, CTM leverages already agreed-on protocols, e.g.:

• Distribution strategies • Exception management

protocols

Phase 1 Phase 2 Phase 3

How to do it?

27

Doing things the old way

Conventional accounting practices

Tax laws

Limited view of supply chain

Annual negotiation process

Time investment

Inadequate communication

Inconsistency

Betrayal

Impediment

Making the Process Work Requires Recognition and Avoidance of the Key Impediments to Collaboration…

There's a natural resistance to change that confronts any broad initiative like supply chain collaboration

These practices become impediments to collaboration when they focus on the traditional accounting role of determining the value of a single firm, rather than measuring cross-company values

Tax laws dictate the need for a clear "price paid" and "price sold" to determine profitability. Yet these practices can obscure the synergistic, and often indirect, cost savings that are primary drivers of supply chain collaboration

This is a legacy of the traditional silo organizational structure in which people thought only about their own functional area

Annual negotiations consume time and energy, plus they are usually adversarial. There are better alternatives

Collaboration takes time and a lot of hard work. To get people to make the necessary effort, they have to be clearly shown the expected benefits

When communication between supply chain partners is nonexistent or inadequate, the potential for problems increases exponentially

Behavioral attitudes and operational execution must be consistent at all interfaces in the supply chain relations

Lying, misleading, misrepresenting -- these may be the ultimate barriers to successful collaborative relationship

Comments

Source: John Mentzer, James Foggin, Susan Golicic (Supply Chain Management Review)

How to do it?

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Common Interest

Openness

Recognizing who and what are important

Mutual help

Clear expectations

Leadership

Working together and adjusting to one another

Cooperation, not punishment

Trust

Benefit sharing

Technology

Impediment

… and Adoption of Key Enablers

Both parties need to have a stake in the collaboration's outcome to ensure their ongoing commitment

For a relationships to work, the partners must openly discuss their practices and processes. Sometime this means sharing information traditionally considered proprietary

Not all partners and supply chain activities are created equal. Choose those that will deliver the greatest benefits

When addressing supply chain problems or opportunities, the old adage applies" two heads are better than one"

All parties need to understand what is expected of them and others in the relationship

Without a champion to move collaboration forward, nothing significant will ever be accomplished

There's no CEO of the supply chain, so the partners have to work collaboratively to figure out how to get the job done

When things go wrong in a relationship, punitive actions seldom make them better. The right approach is to solve the problem jointly

This basic human quality must be evident throughout the organization -- at every management level and functional area

In a true relationship, the partners need to share both the pain and the gain -- use of a shared modular supply chain scorecard can help

It's not the be all and end all, but advanced technology is essential to enabling a collaborative relations across the supply chain

Comments

Source: John Mentzer, James Foggin, Susan Golicic (Supply Chain Management Review)

How to do it?

29

How to Achieve CTM Benefits

SupplierSupplier BuyerBuyer

CarrierCarrier

3PL3PL

The value of CTM can be obtained through two primary avenues:

1. Direct communication between Shipper(s), Receiver(s) and Carrier(s)

2. 3PL facilitation of the communication and execution process

The value of CTM can be obtained through two primary avenues:

1. Direct communication between Shipper(s), Receiver(s) and Carrier(s)

2. 3PL facilitation of the communication and execution process

How to do it?

30

Level of Collaboration

Traditional Vendor• Transactional• No visibility

Trading PartnerCollaboration• Shared forecast by lane of

traffic• Automated transactions

Partnership Collaboration• Shipper, Receiver, and Carrier• Shared forecast• Committed capacity• Visibility and security

Consortium Collaboration

• Multiple Shippers, Carriers• Third-party facilitation• Information Hub• Relationship management

Value

CTM Value Continuum

Opportunity to add value through CTM increases as multiple shipper

networks are integrated, carriers are connected, and communication

and execution capabilities are enhanced

Opportunity to add value through CTM increases as multiple shipper

networks are integrated, carriers are connected, and communication

and execution capabilities are enhanced

How to do it?

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32

Potential Approach for Getting Started

Pilot Perform A

Collaborative Supply Chain Audit

Select CTM

Partners

Define Joint Next

Steps

Engage CTM Partners

Step 1: Partner Selection

Step 2: Partner Engagement

Step 3: Collaborative Assessment

Step 4: Pilot Testing

Step 5: Determining Next Steps

Key Activities:

• Establish criteria for selection

• Evaluate and select potential partners

• Identify potential benefits and opportunities of a CTM collaboration initiative with selected partners

• Meet with selected partners to review benefits and propose a course of action

• Complete collaborative assessment of joint logistics process

• Benchmark current performance vis á vis agreed to metrics

• Define and gain agreement to a test pilot, e.g.:

– Proposed changes in operations

– Duration – Expected

results/ targets

• Define root causes of success or failure

• Meet to agree on a proposed course of action moving forward

Getting Started

33

Would a CTM collaboration likely result in tangible benefits to the partners business?

Is there a significant opportunity to improve the performance of the business by collaborating with the partner?

• Important to your business?

• Current performance of the partner significantly less than it could be?

• Opportunity for multi-vendor consolidation or LTL minimization?

Is the potential partner ready/capable of leveraging a CTM collaboration to improve performance?

• Could partner translate better information into improved performance?

• Is partner capable of providing needed information and capabilities/ capacities to help capture the opportunity?

Step 1: Partner Selection

Engage the

partner

Engage the

partner

Do not engage

the partner

Do not engage

the partner

Yes

Yes

Yes

No

No

No

Example Partner Selection Logic

Getting Started

34

Comments/LearningsKey Discussion Point(s)

Step 2: Partner Engagement

1. Articulate Potential Benefits, e.g.:• Advance product level visibility• Reduction of lead time• Advance scheduling opportunities • Elimination of freight bill and shipment administration • Ability to scorecard and quantify root causes • Consolidation opportunity • Continuous moves • Increase in business • Advance notification/projecting of moves• Expense minimization

2. Present a broad outline of a potential plan and requirements to capture the opportunity • Suggest a collaborative assessment of logistics processes • Critical requirements for you and the partners to make it

successful (e.g., early involvement of transportation group)

3. A suggested approach for moving forward together • List of suggested next steps • Suggested teams/resources to be involved

Its important to demonstrate the full breadth of potential opportunity for all partners involved

Translating the opportunity into a tangible set of operational requirements will help partners to see that the opportunities are real and attainable and give them something to grab on to and engage in a discussion

Suggesting next steps will move the discussion to action

Key Discussion Points With Potential Partner

Getting Started

35

Finished Goods Inventory

Delivery (On-Time)

Delivery (In Full)

Out of Stock Frequency -- Finished Goods

On-Shelf Availability

KPI

Avg. Value of Inventory = $5,000Avg. Daily Sales = $400Inventory = 12.5 days (5,000/400)

Ordered; Product A = 100 cases; Product B = 60 cases Delivered On Time; A = 80 cases; Product B = 60 cases % Orders on time for lines = 50% (1 out of 2) % Orders on time for cases = 87.5% (140 out of 160)

Ordered; Product A = 100 cases; Product B = 60 cases Delivered; A = 100 cases; Product B = 50 cases on time, 10 cases one day later% Orders in full for lines = 50% (1 out of 2) % Orders in full for cases = 93.75% (150 out of 160)

OOS should be measured as frequently as capabilities allow. The target is a systematic approach to daily measurement. However, key is to measure OOS based on whatever capability exists (daily, weekly, audit)

There is a wide range of measurement methods. It is recommended to agree on the measurement among the trading partner's including the time of measurement

Example

Source: CPFR® Metrics

Days

% Order On Time

% Order In Full

% OOS

% On-Shelf Availability

Measure

Value/units of inventory (cost of goods) divided by the value/units of average daily sales (calculation based on past 6 months history or on forecast for next 6 months) of these products

Number of order lines/cases/SKUs delivered on time divided by the total number of lines/cases/SKUs ordered

Number of order line/cases/SKUs delivered in full divided by the total number of lines/cases/SKUs ordered

Number of items not available divided by the number of items

Number of days/hours the product is available on the shelf divided by a defined period of time

Definition

Step 3: Establish Performance Metrics Affected by CTM

Getting Started

36

Finished Goods Order Lead-Time

Capacity Planning

Transportation Planning

Full Truck

Vehicle Fill

Empty Running

Distribution Costs

Invoice Accuracy

KPI

Order sent at noon. Picked and shipped at 17:00 the next day. 6 hours transit timeFinished Goods Order Lead Time = 35 hours (1.4 days)

A manufacturer plans its capacity two months in advance and does not adjust it afterwards; KPI =60 days

A supplier has scheduled three trucks two weeks in advance and does not change the plans; KPI = 14 days

Number of full trucks during May = 20Number of trucks filled less than 95% of their capacity during May = 10 % Full Truck = 66.6% (20 out of 30)

Number of full trucks = 20Number of trucks filled with 80% = 10 % of Vehicle Fill = 93.3%

Number miles driven empty = 300Total miles driven = 6,000% Empty Running = 5% (300/6,000)

Total distribution cost = $750Total sales = $2,000 KPI: % of Sales = 37.5% (750/2,000)

16 lines ordered 10 had 100% match % Invoice Accuracy = 62.5% (10/16)

Example

Days /Hours

Days

Days

% Full truck

% Vehicle Fill

% Empty Running

% of Sales

% Invoice Accuracy

Measure

Number of days/hours it takes from finished goods order generation to order receipt

Number of days for frozen period of capacity plan

Number of days for frozen period of transportation plan

Number of trucks with over 95% of volume full divided by the total number of trucks shipped

Average volume of vehicles used divided by total volume of vehicle

Number of miles driven empty divided by the total number of miles driven

Total distribution cost of products (e.g., warehousing, transport, people) divided by value of total sales of product

Number of lines with matching data (specification and price) divided by total number of lines

Definition

Source: CPFR® Metrics

Step 3: Establish Performance Metrics Affected by CTM (cont.)

Getting Started

37

Comments/IssuesKey Elements

Step 4: Pilot Testing – Draft –

1. Define the Procedures In Detail

2. Ensure Clear Responsibilities

3. Establish The Timeframe/Duration Upfront

4. Agree On The Benefits

5. Clearly Define The Resource Commitment

6. Develop a Communications Plan Upfront

How will the procedures be modified to capture the opportunity?

Who will be responsible for each element of the transport planning and execution process? e.g.:

• Terms of Purchase • Terms of Routing

What is the appropriate timeframe/duration of the pilot to ensure that there is enough time to see the benefits?

What is the target improvement vis á vis the metrics and benchmarks established?

How will those targets change over the next 30/60/90 days?

Who will be involved in the pilot from each participant and how much of their time will be spent on the pilot?

How will we communicate progress/issues/results over time (e.g., weekly conference calls, monthly meeting)

Key Elements to Include in the Pilot

Getting Started

38

Where do we go from here?

Step 5: Defining Next Steps

Key Elements to be Addressed in Evaluating Pilot Results and Defining Next Steps

What did we learn?

Why did the pilot meet/not

meet/exceed its objectives?

What is the appropriate path moving forward?

How did we do relative to our targets?

Were there unanticipated beneficial lessons?

Are there modifications to the procedures that should be made?

Were our communications effective?

Were our objectives reasonable/rationale?

What are the real root causes for our change or lack of change in performance?

Are there elements of the pilot that we can/should implement now?

Is there further testing to be done?

How will we institutionalize the changes we are ready to make?

Are there capabilities that one or more partners needs to develop before we can go further?

How will we know that we are going to achieve the benefits?

Where is the money?

Getting Started

39

Lessons Learned and Best Practices from Previous CTM Pilots

Lessons Learned Area

Mindset

Unbiased Guidance

CTM Readiness

Face-To-Face Meetings

Values of the Interaction

Scheduling

Commitment to Supply Chain Improvement

The mindset of the individuals participating on the CTM team has to be one of collaboration. While CPFR specifically may not be the requisite mindset, a willingness to share information and jointly manage the process is critical to success

In order to keep the process focused, and to enable the interaction among companies in the process development stags, third-party unbiased guidance is recommended

Once there is commitment to the concept of CTM, it can be used by each individual partner as a tool to build relationships with other business partners, where the existing relationships may not be as strong

The value of face-to-face meetings is crucial to maintaining the momentum of the project, and to ensuring the quality of the CTM process that is developed

As a result of face-to-face, telephone, and e-mail communications, companies tend to encounter unanticipated opportunities along the way, even if there is not 100% follow through on some initiatives

To ensure participation in face-to-face meetings, scheduling the sessions a month in advance compels participates to make them a priority

While CTM is focused on "transportation" management, its impact is spread throughout the supply chain

Getting Started

CTM Paper published in Montgomery Research’s

ASCET, Volume 6

Collaborative Transportation Management

Business

ctm process

ctm opportunities

ctm introduction

objective of ctm

ctm initiative

ctm capabilities

documented ctm results

management of transportation