Shipping is a cost-intensive and time-consuming component of product sales and delivery. This is especially true for manufacturers of industrial products like heaters, boilers and air conditioning equipment. Typically, these manufacturers have different business entities (divisions) for each line of business. Their customers often buy more than one product from them. Take, for example, a grocery chain setting up a new store. The chain may order air conditioning and ventilation equipment along with food chillers and freezers from the same manufacturer. At the front end, the sales booking system of the manufacturer takes the order and distributes it to different business entities at the back end for fulfilment. Each business entity may have its warehouse separated from the other by just a few blocks but each makes its own delivery to the customer. As a consequence, air conditioning equipment reaches on one day, freezers reach on another and ventilation on a third. Multiple deliveries add to the inconvenience a customer is subject to with sub optimal truck loads also adding to freight costs. Ultimately, someone—either the customer or the business—is paying for it. It is evident that large saving opportunities exist in consolidating and optimizing shipments.
The problem is the result of two or more business entities belonging to the same manufacturer being unable to share data between themselves. Transactions are siloed within business entities, each using a different and isolated order fulfilment system. If data between the business entities can be merged, shipments can be consolidated thus unlocking savings.
There are two points in the order management process that allow data to be shared. The point of sale where the order is recorded—and before it is distributed to the back end—can be used to identify orders that need to be merged for shipment. The second point is with planners who work with the same logistics partner to ship products. The planners can exchange data to identify opportunities to merge shipments.
Wipro executed a system for a large manufacturer of cooling and heating equipment in the US that not only consolidates orders but also provides a number of other convenient features. The system provides trucks with a warehouse-wise schedule for loading the consolidated shipment; once the truck is loaded, the data is provided to the system to generate an invoice; when the invoice is generated, the truck is allowed to leave for delivery.
In addition, cargo load planning and cube optimization was part of this integrated solution, which simulates truck load plans. This ensures the best way to load mixed size products for optimal truck estate usage. The system also intelligently determines loading sequence to make the unloading process faster and simpler based on the sequence in which products need to be delivered.
- Ensured lowered fleet size, reduced delivery costs and increased customer convenience
- Enabled maximum truck volume usage, increasing fleet capacity
- Ensured faster and easier off-loading of shipments
A similar system was created for a grocery store where each shipment was additionally labelled (dairy, poultry, vegetables, medicines, etc.) that enabled the store to offload the shipment and rapidly distribute it across the store without having to examine each container.
These capabilities resulted in additional benefits: When a truck is packed to capacity, there is no room for the shipment to bounce around and damage goods in transit. More importantly, consolidation lowers emission and the ecological impact of using multiple trucks for delivery. Everyone wins, including the environment.