Electronic Freight Management (EFM) technologies enable significant improvements in supply chain visibility, productivity, and effectiveness through simultaneous data sharing.
Broad industry experience with the electronic freight management systems
Subsequently, as a supplement to the Columbus EFM prototype testing, additional analysis was conducted to further examine industry-wide benefits and lessons learned from additional case studies. Highlights from the follow-up report are documented below.
Broad Industry Benefits
A September 2008 case study entitled Beyond Visibility: Driving Supply Chain Responsiveness included an expanded survey response from a total of 349 companies. One-hundred and one (101) respondents partially or fully estimated the economic impact of the supply chain visibility technology.
- 46 percent of smaller firms report benefits of greater than $100,000
- More than twice as many smaller firms report meaningful benefits (>$100,000) than report no payoff or loss
- Almost as many smaller firms report significant benefits (>$500,000) as report no payoff or a loss
- Twice as many large firms report significant benefits (>$500,000) as report no payoff or a loss from a visibility software project
- Half of the firms that reported measuring benefits were large firms with revenues greater than $2.5 Billion, although only 42 percent of the 349 companies in the overall survey were large firms
- For the 23 percent with more than $3 million in benefits (23 companies), 56 percent (13 companies) are large companies with revenues greater than $5 billion
The following benefits highlighted in the report were derived from the primary source documents identified below.
Reduced Transportation Costs
- 30 percent reduction in transportation costs through use of transportation planning software product (Infor - 2008)
- Reduced expediting of shipments by 75 percent (Distribution Group - 2005)
- Reduced cost per parcel by 14 percent (Zuckerman - 2008)
- 20 to 30 percent improvement (Viking Logistics - undated)
- Reduced processing effort by 8 to 15 percent (Accenture - 2002)
- Reduced transportation overhead by 10 to 30 percent (Supply Chain Digest - 2008)
- Reduced costs of manual data capture and entry by 10 to 15 percent (Goodman - 2006)
- 20 percent faster response to rate evaluations (Manufacturing and Logistics IT Magazine -2008)
- Reduced shipping administration process time by more than 50 percent (Murphy – 2004)
- Increased shipment consolidation by 5 to 25 percent (Skinner – 2007)
- Reduced safety stock inventory by 20 percent (Goodman - 2006)
- Reduced inventory levels by 25 to 60 percent (Viking Logistics - Undated)
- Improved transportation controls and reporting by 2 to 5 percent (Skinner - 2007)
- Reduction in time to resolve in-transit problems by 50 percent (Goodman - 2006)
- Improvements in delivery performance by 16 to18 percent (Viking Logistics - undated)
- Improved reliability of delivery time to 90 percent (Goodman - 2006)
- Improved on time delivery performance from 94 to 97 percent (P&G - undated)
- Improved cycle time by 10 to 50 percent (Distribution Group - 2005)
- Visibility cost savings of 7 percent (Peleg–Gillai - 2006)
- Increase in on–time deliveries of 12 percent (Peleg–Gillai - 2006)
- Increase in access to supply chain data of 50 percent (Peleg–Gillai - 2006)
- Increased timeliness of shipping information of 30 percent (Peleg–Gillai - 2006)
Viking Logistics, “Principles of Supply Chain Management,” White paper on Logistics HQ page on Viking Web site, Undated.
Infor Solutions Webinar. October 22, 2008.
Distribution Group, “Developing an Effective Business Case for a WMS.” 2005.
Zuckerman, Amy. “Transportation Management Systems Give Shippers Power to Make Smarter Trucking Choices,” World Trade Magazine. 3 January 2008.
Accenture, with Rolls Royce, Diageo, Ernst and Young, Capgemini, Shell and AT&T, “Building the Business Case for e–Procurement and ROI.” 2002.
“Where is the ROI in Transportation Management Systems?” Supply Chain Digest. 15 June 2008.
Goodman, Russell. “Dow’s Innovative Ways to Cut Shipments of Dangerous Goods,” Global Logistics and Supply Chain Strategies. December 2006.
“Global Link Logistics Boosts Productivity by 50% with Management Dynamics Solution,” Manufacturing and Logistics IT Magazine, 8 May 2008.
Murphy, Jean C., “Sunoco’s Shipping Process Inside its Plant Goes from Manual to Highly Optimized,” Global Logistics and Supply Chain Strategies, September 2004.
Skinner, Michael, “The Time has Come: Visibility into the Transportation Process is now affordable and soon to be expected.” Chemlogix White Paper. 2007.
Peleg–Gillai, Barchi, Bhat, Gauri, and Sept, Leslie, “Innovators in Supply Chain Security: Better Security Drives Business Value,” published by the Manufacturing Institute, Stanford University. July 2006.
Author: Troup, K.; D. Newton; M. Wolfe; and R. Schaefer
Published By: U.S. DOT Research and Innovative Technology Administration
Prepared by SAIC for RITA
Source Date: March 2009
EDL Number: 14495
Other Reference Number: Report. No. FHWA–HOP–09–053URL: http://www.ops.fhwa.dot.gov/publications/fhwahop09053/fhwahop09053.pdf
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