While shoppers might enjoy the tremendous variety of cheese in their supermarket's dairy case, they probably give little thought to how these products get there -- to the right place, in the right quantities, at the right time.
To make it happen, somebody has to rationalize these daunting logistics, and for Sargento Foods, that person is Keith Hartlaub, general manager of Sargento Transportation LLC, located in Plymouth, WI. The company's parent, Sargento Foods Inc., produces packaged cheese for distribution to stores, restaurants, and other food manufacturers throughout the country. The privately held company is the second-largest producer of natural cheese sold in the U.S., with net sales exceeding $500 million annually.
Hartlaub and his team recently implemented Sterling Commerce's Transportation Management module, a component of the vendor's supply chain software suite. Sargento Transportation had found that its previous transportation management system (TMS) was falling short on functionality, and selected the Sterling software earlier this year to address the company's needs for incoming order management and optimizing individual truckloads of outgoing product, as well as for the software's reporting and financial tracking capabilities specifically, says Hartlaub. The company ships approximately 160 truckloads of cheese products per week, normally to 38 states.
"With each truck making between three and seven stop per run," keeping track of all the resulting data can become very complex, Hartlaub explains.
Hartlaub and his team evaluated four vendors after making the decision to replace the original TMS. Two of the vendors offered an on-demand product; the others were traditional on-premises applications. Hartlaub says that although his organization had not used on-demand software prior to the implementation of Sterling Transportation Management, Sargento Foods -- with which Transportation shares a contracted IT staff -- has Web-based applications in place. The choice was clear, however, after considering the cost benefits that attend the use of an on-demand system, such as freeing up IT resources that otherwise would be involved with the maintenance of in-house software. Sargento pays an annual fee to access the Sterling system.
In addition to the financial benefits, Hartlaub liked the flexibility of an on-demand system that allows his managers the ability to access the system outside of the office building (and normal business hours) in the case of an event requiring an urgent response.
While this is the company's first on-demand system, Sargento Transportation is familiar with Sterling. The company has used Sterling's Electronic Data Interchange (EDI) platform for several years to manage transactions with its trading partners.
In terms of implementation, Hartlaub says that once over the initial IT hurdles of mapping the TMS system with existing infrastructure including EDI, and test procedures to ensure it was communicating properly with the company's SAP ERP system, it was smooth sailing. "The implementation process started end of March/beginning of April, and the system was 'turned on' June 26."
In addition to the Sterling EDI and TMS, Transportation runs a warehouse management application from RedPrairie on the supply chain side, all three of which communicate with the SAP ERP on the business management side.
Hartlaub says his major requirements for implementing a new TMS included the need to create "better" (more cost-effective) shipment loads, greater reporting insight into the business's financial records, delivery and performance metrics, and the ability to communicate via EDI or the Internet with electronic messaging with supply chain partners. Automating a manual settlement process was particularly significant. In fact, the company plans to move to an entirely paperless invoice management process enabled by the TMS within the next three months.
Transportation has not yet put a lot of effort into nailing down specific numbers for ROI on the Sterling TMS software, but Hartlaub says the benefits are tangible already. The response from his carriers, required to interact with the new TMS, has been positive, as well. In fact, Hartlaub has found that any extra work on the part of carriers to cooperate with the system has been more than compensated for, as they've reported increasingly streamlined processes on their end.