Jeremy Carter Land O\'Lakes Presentation

LAND O’LAKES PURINA FEEDLAND O’LAKES PURINA FEEDFort Worth, TexasFort Worth, Texas

Purina Feed MillPurina Feed Mill

Jeremy CarterJeremy CarterBaylor UniversityBaylor University

Distribution ManagementDistribution Management&&

TechnologyTechnology

Fort Worth PlantFort Worth Plant Customer Service RepresentativesCustomer Service Representatives Transportation ModesTransportation Modes Lane Types & Transportation CostsLane Types & Transportation Costs Transportation PlannersTransportation Planners Lead Transportation PlannersLead Transportation Planners OTM Area’s of ConcernOTM Area’s of Concern Cross DockCross Dock ILS ILS - Inbound Logistic Specialist- Inbound Logistic Specialist

DRPDRP- Distribution Replenishment Planner- Distribution Replenishment Planner

Load FactoringLoad Factoring Other SuggestionsOther Suggestions QuestionsQuestions

OverviewOverview

Fort Worth PlantFort Worth Plant Fort Worth facility on average produces 1,000 Fort Worth facility on average produces 1,000

tons of product a day and 260,000 tons a yeartons of product a day and 260,000 tons a year An estimated 45 outbound trucks of Bulk and/or An estimated 45 outbound trucks of Bulk and/or

Bags leave Fort Worth every day and about Bags leave Fort Worth every day and about 11,700 a year11,700 a year

65% of inbound ingredients are brought in by 65% of inbound ingredients are brought in by rail and 35% by truckrail and 35% by truck

Customer Service RepresentativesCustomer Service Representatives Customer Order ResponsibilitiesCustomer Order Responsibilities

• Lead timeLead time• Taken on dateTaken on date• Request by dateRequest by date• ETA – Estimated Time of ArrivalETA – Estimated Time of Arrival• Requirement Description (shipping type)Requirement Description (shipping type)

Affects Affects • Production levels of the plantsProduction levels of the plants• Customer Delivery dateCustomer Delivery date• Transportation PlanningTransportation Planning

Uses E1 for order inputUses E1 for order input Excel spread sheets for specials from Excel spread sheets for specials from

the Distribution Centerthe Distribution Center

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and sugar level.

RailRail TankerTanker HopperHopper BoxBox

VanVan Dry VanDry Van ReeferReefer

LTLLTL Less than truck loadLess than truck load

IntermodalIntermodal Container (rail to road)Container (rail to road)

BulkBulk HopperHopper DumpDump Pneumatic Dry BulkPneumatic Dry Bulk (Emptied by Air Pressure)(Emptied by Air Pressure) Walking FloorWalking Floor Liquid TankerLiquid Tanker Special – AugersSpecial – Augers

Transportation ModesTransportation Modes

Types of LanesTypes of Lanes• Straight LoadStraight Load• Split LoadSplit Load• Back HaulsBack Hauls

Types of Transportation CostsTypes of Transportation Costs• Flat RateFlat Rate• Per Mile RatePer Mile Rate• Per Ton RatePer Ton Rate

• Assessorial ChargesAssessorial Charges Fuel SurchargesFuel Surcharges Wash Out ChargesWash Out Charges Extra/Excessive MileageExtra/Excessive Mileage Stop ChargesStop Charges

Lane Types & Transportation CostsLane Types & Transportation Costs

Planners are assigned by lanes or product typesPlanners are assigned by lanes or product types Planning of loads in OTMPlanning of loads in OTM

• Selecting Inbound, Outbound or Query type to pull up Selecting Inbound, Outbound or Query type to pull up ordersorders

• Selection of CarrierSelection of Carrier• Allocating Load to CarrierAllocating Load to Carrier

Bulk Plan Tendering LoadBulk Plan Tendering Load• Based on Lane and CostBased on Lane and Cost

Manual Tendering LoadManual Tendering Load• Transportation ModeTransportation Mode• Service ProviderService Provider• Estimated Service TimeEstimated Service Time• Estimated CostEstimated Cost

• Understanding the codes and SymbolsUnderstanding the codes and Symbols• SCAC Code for CarriersSCAC Code for Carriers• Plant Codes and NamesPlant Codes and Names• Indicators Colors – status of the line itemIndicators Colors – status of the line item

Transportation PlannersTransportation Planners

• Scheduling & Confirmation from Carriers with ability to Scheduling & Confirmation from Carriers with ability to handle the loadhandle the load

SID number (shipment Identification)SID number (shipment Identification) Sending the ReportSending the Report

• Phone Phone • EmailEmail

OTM Report OTM Report Excel Spread SheetExcel Spread Sheet PDF filePDF file

• FaxFax OTM ReportOTM Report

Transportation PlannersTransportation Planners

ResponsibilitiesResponsibilities• Withdraw orders/tendersWithdraw orders/tenders• Look up rate recordsLook up rate records• Multi-Stop ShipmentsMulti-Stop Shipments• Finding new carriersFinding new carriers• Open-PO ReportsOpen-PO Reports• PC MilerPC Miler

Industry standard software used to determine route distanceIndustry standard software used to determine route distance

• Planning transportation for Rail Car TankersPlanning transportation for Rail Car Tankers BNSF web siteBNSF web site

• Web Tender Training for CarriersWeb Tender Training for Carriers• Insurance Claims and DamagesInsurance Claims and Damages• Proof Insurance, DOT AuthorityProof Insurance, DOT Authority• Rate Contracts w/carriersRate Contracts w/carriers

Lead Transportation PlannerLead Transportation Planner

Additional ResponsibilitiesAdditional Responsibilities• E1 - Supply & Demand and Inquiry MenuE1 - Supply & Demand and Inquiry Menu

Researching & Tracking Researching & Tracking • What type product was shipped, shipment status, What type product was shipped, shipment status,

changes of dates, changes of freight carriers, changes of dates, changes of freight carriers, cancelations, and tracking individual transactionscancelations, and tracking individual transactions

Lead Transportation PlannerLead Transportation Planner

Planning a bulk load just over 1 truck (54,000 Planning a bulk load just over 1 truck (54,000 lbs) the system will automatically make the lbs) the system will automatically make the 2nd truck a LTL 2nd truck a LTL • Today: system may not allow desired carrierToday: system may not allow desired carrier

Ability to add or remove weight from loads post Ability to add or remove weight from loads post tendered/secured tendered/secured • Advantage: Advantage:

Eliminate un-tendering and re-tendering for Eliminate un-tendering and re-tendering for plannersplanners

Eliminate multiple SID numbers on one truckEliminate multiple SID numbers on one truck OTM weight Counter as you build the load, with OTM weight Counter as you build the load, with

out having to assign an SID numberout having to assign an SID number• Today: manually calculate the weight on a Today: manually calculate the weight on a

calculatorcalculator

OTM Area’s of ConcernOTM Area’s of Concern

Function:Function:• ST - used to maintain inventory levels in WarehousesST - used to maintain inventory levels in Warehouses• TO - used to fill customer picks / ordersTO - used to fill customer picks / orders

Area’s of concern:Area’s of concern:• What causes the discrepancies between Cross Dock What causes the discrepancies between Cross Dock

numbers in FWDC emails and the Dock Door numbers numbers in FWDC emails and the Dock Door numbers pulled by Fort Worth Transportation Planners in OTM?pulled by Fort Worth Transportation Planners in OTM?

• Add-onsAdd-ons• Back orders (Special) – TP can not distinguish in OTMBack orders (Special) – TP can not distinguish in OTM• Late orders – TP can not distinguish in OTM, only know by Late orders – TP can not distinguish in OTM, only know by

emailsemails Suggestions: Suggestions:

• Strict deadlines and cut offs for add-onsStrict deadlines and cut offs for add-ons• Input back orders and date changes correctlyInput back orders and date changes correctly• Better records in OTMBetter records in OTM

Cross DockCross Dock

Inbound Logistics SpecialistInbound Logistics Specialist Lead ILS uses MRP/excel spread sheets to control Lead ILS uses MRP/excel spread sheets to control

proper levels of inbound ingredientsproper levels of inbound ingredients Responsible for raw material needs to maintain Responsible for raw material needs to maintain

adequate production levelsadequate production levels DemurrageDemurrage

• Helps determine the cost of ingredient inventory Helps determine the cost of ingredient inventory managementmanagement

• Measures how well carriers and suppliers delivery product Measures how well carriers and suppliers delivery product based on averages based on averages

• Measures when the product ships, period it stays, transit Measures when the product ships, period it stays, transit average based on historical averages, tracks cost (variable average based on historical averages, tracks cost (variable costs), and lead timecosts), and lead time

Days on hand reportDays on hand report System 1 Railroad – BNSF, UP, CN, NSSystem 1 Railroad – BNSF, UP, CN, NS

• Tracking costsTracking costs Wait TimeWait Time Box Cost Box Cost Delivery CostDelivery Cost Per tonPer ton

DRP MinnesotaDRP Minnesota Distribution Replenishment PlannerDistribution Replenishment Planner

• Located in MinnesotaLocated in Minnesota• Responsible for replenishment of Responsible for replenishment of

products for distribution centers and products for distribution centers and warehouses and customer picks for warehouses and customer picks for plant locationsplant locations

ResponsibilitiesResponsibilities• Communication between DRP and Communication between DRP and

transportation planners through email transportation planners through email to add and cut weight of loads to to add and cut weight of loads to maximum transportation costsmaximum transportation costs

PlanningMovementof Goods

Communicationwith

TransportationPlanners

Analyze MaterialsNeeded for

Replenishment

Add or CutLoad

Weight

Planningof Load

to Carrier

Inventoryback to

Adequate levels

DRPDRP

CYCLECYCLE

Load Factoring - Project Scope Load Factoring - Project Scope Objective:Objective:

• To Improve Load Factoring and Decrease Cost of To Improve Load Factoring and Decrease Cost of TransportationTransportation

Tools Used in Analysis:Tools Used in Analysis:• Business Objects ReportsBusiness Objects Reports

Weekly ReportsWeekly Reports Filtered DataFiltered Data

• E1E1• PC MilerPC Miler• DRP TeamDRP Team• Transportation Planners Transportation Planners • DOCK Door InformationDOCK Door Information• Customer Service PersonnelCustomer Service Personnel• Cross Dock Emails/Numbers/PersonnelCross Dock Emails/Numbers/Personnel• OTM – Oracle Transportation ManagementOTM – Oracle Transportation Management

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FTW to LUBB - weekly report FTW to LUBB - detailed report FWDC to LUBB - weekly report FWDC to LUBB - detailed report

Southwest Region

To

ns

ACTUAL

GOAL

Data Discrepancies - Load FactoringData Discrepancies - Load Factoring

21.1821.1821.7321.73

16.9016.90

18.9618.96

How to ensure accurate and effective data reports?How to ensure accurate and effective data reports? By having detailed and traceable dataBy having detailed and traceable data

• From input point to storage locationFrom input point to storage location

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FTW to ARCOLA FWDC to ARCOLA FTW to GONZ FWDC to GONZ

Tons

ACTUAL

GOAL

Lost Free Freight – Load FactoringLost Free Freight – Load FactoringFTW = FULL LOADS : FWDC = < FULL LOADSFTW = FULL LOADS : FWDC = < FULL LOADS

21.5421.54 21.9321.93

17.6017.60 18.0618.06

$32,000$64,000

Why are the Plants maintaining full loads, yet the Warehouses can not?Why are the Plants maintaining full loads, yet the Warehouses can not? Should these loads be combined or have alternative planning methods?Should these loads be combined or have alternative planning methods? Lost Free Freight: Arcola = $32,000 yearly, Gonzales = $64,000 yearlyLost Free Freight: Arcola = $32,000 yearly, Gonzales = $64,000 yearly

Suggestion 1:Suggestion 1:• Use products sold in high volume as filler to maximize Use products sold in high volume as filler to maximize

truck loadstruck loads Outcome 1:Outcome 1:

• Create storage/floor space to alleviate ability to Create storage/floor space to alleviate ability to holding inventoryholding inventory

• Combine filler product with pick orders to maximize Combine filler product with pick orders to maximize load sizesload sizes

Suggestion 2:Suggestion 2:• Transparency of transportation carrier plan to the DRPTransparency of transportation carrier plan to the DRP

Outcome 2:Outcome 2:• Emails closest to real time response between DC and Emails closest to real time response between DC and

DRP to fill trucksDRP to fill trucks

Improving Loading FactoringImproving Loading Factoring

Suggestion 3:Suggestion 3:• Increased lead times from customer order to delivery, Increased lead times from customer order to delivery,

strict deadlines for ordering to improve the opportunity strict deadlines for ordering to improve the opportunity to combine orders into larger loadsto combine orders into larger loads

Outcome 3:Outcome 3:• Currently used with Tracker Supply CenterCurrently used with Tracker Supply Center• Advantage: Higher loads weights, ability to combine Advantage: Higher loads weights, ability to combine

more orders into one loadmore orders into one load

Improving Loading FactoringImproving Loading Factoring

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FORT to LUBB FORT to ARCOLA FORT to SHLA FORT to GONZ FORT to OKLA

Southwest Region

To

ns

ACTUAL

GOAL

Potential Load Factoring SavingsPotential Load Factoring Savingsto Lubbockto Lubbock

$20,340$20,340SAVINGSSAVINGS

to Arcolato Arcola$42,720$42,720

SAVINGSSAVINGS

to Shreveportto Shreveport$62,640$62,640

SAVINGSSAVINGS

to Gonzalesto Gonzales$64,800$64,800

SAVINGSSAVINGS

to Oklahomato Oklahoma$24,000$24,000

SAVINGSSAVINGS

TOTAL YEARLY SAVINGS 0FTOTAL YEARLY SAVINGS 0F

$215,000$215,000

Other SuggestionsOther Suggestions Electronic record storage of Dock DoorsElectronic record storage of Dock Doors Ability to run multiple OTM sessions at onceAbility to run multiple OTM sessions at once Finger print for OTM transactionsFinger print for OTM transactions Should FWDC to FTW have movement records?Should FWDC to FTW have movement records? RFID Readers at Loading/Unloading DocksRFID Readers at Loading/Unloading Docks

• Why?Why? Increase inventory management traceabilityIncrease inventory management traceability Real time movement of goodsReal time movement of goods Increased accuracyIncreased accuracy

• Long Term Commitment!Long Term Commitment! Why are shipments being sent to OKLA plant and OKLA Why are shipments being sent to OKLA plant and OKLA

warehouse in the system?warehouse in the system? Why not just the warehouse, which is the shipping Why not just the warehouse, which is the shipping

destination in realitydestination in reality Should shipments that are LTL’s be noted (Business Objects) Should shipments that are LTL’s be noted (Business Objects)

or sent to a separate storage file location?or sent to a separate storage file location?

QUESTIONSQUESTIONS