case study - globaltranz · hoh water technology, a family-owned business based in palatine, il, is...

Modernizing The Supply Chain Through A Managed Transportation Services Partnership

CASE STUDY:

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Supply Chain Overview

HOH Water Technology, a family-owned business based in Palatine, IL, is a dynamic and innovative leader in water treatment technology, serving the needs of commercial and industrial facilities across a variety of industries, providing solutions for cooling water, steam boiler water, wastewater, closed systems, and water safety. Additionally, HOH offers equipment installation and servicing, laboratory analysis, and provides its customers consultative analysis and customized water treatment plans with an emphasis on providing exceptional customer service.

HOH ships its water treatment products from its Palatine, IL and Sioux Falls, SD manufacturing facilities to distribution centers located in Greendale, WI, Walled Lake, MI, Largo, FL, and Tempe, AZ, as well directly to customers, primarily via Less-Than-Truckload (LTL). The product is shipped in drums or pails, either on pallets or in totes, and approximately 65-75% of the shipments include hazardous materials. Prior to implementing a Managed Transportation Services (MTS) solution, HOH was utilizing a large carrier base, which it was managing manually (i.e. without the benefit of a Transportation Management System, or TMS), as well as a small private fleet. All inbound freight was vendor-routed.

For HOH’s customers, speedy, highly responsive service is critical. When a water treatment facility experiences an unplanned or emergency upset, quickly getting products to the point of use is essential to getting the facility back online, and represents an important part of the HOH value proposition to its customers. Whereas other providers may take weeks to fulfill an order, HOH prides itself on offering the fastest order lead time in the industry.

The majority of U.S. shippers and manufacturers still operate without the resources needed for a modern logistics solution. HOH Water Technology was in that same category until they became aware of the potential to leverage the latest logistics technology and external resources to enhance their supply chain and profitability. The HOH team, working with a consultant, went to market in order to become aware of the solutions available to them. Like other companies that have implemented technology solutions and accessed resources through strategic partnerships, HOH now has a modern, enhanced supply chain that drives significant enterprise value.

The following case study provides a detailed overview of HOH’s challenges, partner selection process, the solution proposed and implemented by GlobalTranz, HOH’s chosen logistics provider, and the results of GlobalTranz’s solution.

Simply put, our supply chain is strategically important to

our customers’ satisfaction and to the future growth of our

business,” said Mr. Reid Hutchison, Director of Operations

at HOH. “We knew that in order to build on HOH’s 50-year

legacy with new, scalable growth,” continued Mr. Hutchison,

“we would need to take a close look at our approach to

transportation and logistics.”

“

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Despite the relatively large, and growing, nature of its transportation needs, HOH was operating without a holistic supply chain solution and TMS. As a result, HOH operated in a decentralized fashion, which allowed the management team at each location to make transportation procurement decisions independently of the other facilities, including implementing pricing strategies and tariffs which were unique to each location. This “hyper-local” approach created an environment in which some facilities were purchasing transportation at competitive rates, whereas in other cases the transportation spend was not optimized and opportunities for savings were not realized.

The lack of TMS created not only a lack of visibility between facilities and departments; it also created a lack of visibility for shipments and billing oversight. For example, without a TMS, there was no efficient way for the HOH team to manage expected spend vs. actual spend for any given shipment. Any such auditing was conducted only when significant discrepancies arose.

“Our lack of robust shipment-level data resulted in a lack of business intelligence, hindering strategic management and impeding growth of the business,” said Mr. Hutchison. “The lack of technology, supply chain expertise, and decentralized operations created inefficiencies, a reactive environment with limited control, and a challenged environment for change management. We strongly believed that savings opportunities existed, but we lacked the data, technology, resources, and processes necessary to identify and seize them.”

In order to address these challenges and to improve the efficiency of their supply chain, HOH executives initiated a thorough process to identify a logistics partner. According to Mr. Hutchison, “HOH realized that, given the nature of our challenges, what we needed was to identify a strategic partner” that could help the HOH team achieve the following goals for their organization:

Through the partner selection process, the HOH team evaluated five leading candidates, assessing the relative capabilities and merits of each organization. As a rapidly growing family-owned business, the HOH team sought a partner that would meet their strategic goals, provide exceptional, hands-on service, and offer the flexibility to grow along with HOH. Mr. Hutchison remarked, “We needed to be sure that the partner we chose would be culturally aligned, and provide us the attention, technology, and resources we needed to drive change and growth, not just for today, but long term. With GlobalTranz, we felt confident that we had found that partner.”

GlobalTranz was invited to participate in the HOH partner selection process and began by conducting discovery meetings with the HOH team to fully understand their supply chain needs, challenges and opportunities, and importantly, how these needs differed across multiple departments, roles, and all facilities. GlobalTranz then requested that HOH provide 6-12 months of shipment-level data in order to conduct a detailed transportation analysis to identify opportunities to optimize their network, consolidate shipments, and reduce transportation costs. The combination of the qualitative and quantitative created a holistic approach focused on reducing total landed costs while enabling HOH to achieve strategic goals.

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2

3

Create a strategic partnership to leverage expertise and resources

Maintain or improve service levels to HOH clients

Implement technology for visibility, control, and efficiency gains

4 Manage costs

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6

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Standardize processes across all facilities

Capture data for improved business intelligence and strategic management

Implement continuous improvement best practices for change management and profitable growth

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Challenges

Supply Chain Partner Selection Process


Implementation of an MTS delivers improved visibility and control for both real-time exception management and enhances business intelligence for improved strategic management. This drives On-Time Delivery, improves customer satisfaction, and creates opportunities for process improvements that manage costs and drive growth. For example, an MTS with best-in-class technology that proactively captures shipment-level data expedites analysis and optimization on a per-customer basis.

Enhanced visibility improves internal communication, and empowers all members of the organization with timely, accurate data to measure their respective KPIs and progress toward shared strategic goals. The TMS acts a central repository for all transportation data, allowing the creation of customized reporting that drives strategic management and change management.

The proposed TMS was key to realizing the supply chain enhancements which HOH had identified, creating a single electronic platform for visibility and control, including:

Interdepartmental visibility necessary for organizational alignment

Connection of all parties in the supply chain

Customer ASNs and delivery notifications

Real-time visibility to carrier network, transit times, rates, and performance

Automated load tendering and status updates

Shortened order-to-cash cycle

Customizable user views and capabilities

Customizable business intelligence and reporting based on business needs

Accounting efficiencies, including the flexibility and scalability to handle peak season volumes

Ability to allocate cost to orders

GlobalTranz, headquartered in Scottsdale, AZ, was ultimately selected to be HOH’s logistics partner. GlobalTranz proposed to provide a Managed Transportation Services (MTS) solution to achieve HOH’s strategic goals. This solution included:

Implementation of a TMS to drive visibility and control, scalability, business intelligence reporting, and growth opportunities

Deployment of a dedicated Account Manager and support team

LTL, Partial, Truckload, and Expedited services

Leveraging HOH’s incumbent service providers while gaining access to GlobalTranz’s provider network for savings, flexibility, and scalability to support growth

Enhanced reporting and business intelligence

Hands-on customer service and partnership based on continuous improvement

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Solutions

GlobalTranz, in collabora�on with the client, will conduct a thorough process mapping exercise to determine current state.This process map is then used to define & iden�fy areas for improvement.

GlobalTranz then measures a baseline performance for the current business.The client and GlobalTranz come to an agreement on the baseline measures which will be used for future state goal se�ng.

GlobalTranz defines future state solu�on and process with key stakeholders assigned to each phase.Once the client signs off, GlobalTranz will share detailed implementa�on plan with key stakeholders to ensure alignment.

GlobalTranz leads and manages collabora�ve implementa�on plan with the client.

This phase includes frequent status mee�ngs with the client and mul�ple points for client approval.

GlobalTranz & the client review implementa�on to ensure that goals set in the “Measure” phase have been met.

GlobalTranz & the client iden�fy areas for future improvement & develop con�nuous improvement plan.

Define

Measure

Plan

Implement

Assess

Improve


A TMS also facilitates route guide creation and compliance. Effective route guide compliance and proactive exception management is a critical tool which ensures that each and every shipment is handled by the optimal carrier, based on specific business needs. A route guide should be dynamic and fully customizable, allowing for agility and flexibility in the current environment and as business needs evolve. Implementing a route guide creates an automated and standardized process which creates efficiencies for organizations with multiple manufacturing and/or distribution facilities.

Through the implementation of a TMS and the resulting greater visibility and control, creation of standardized processes, and the oversight of a dedicated Account Manager and operations team, GlobalTranz proposed a reduction in cost of 14.91%. Furthermore, the data captured by the TMS and the resultant enhanced visibility set the stage for future supply chain enhancements, enabling HOH to achieve its strategic goals of solving current challenges while preparing for future growth.

Upon selection, the GlobalTranz team initiated the implementation process, which was led by its Project Management Office (PMO) team, with the goal of providing seamless change management. The PMO team created a detailed implementation plan, covering all aspects of the integration, including customer, carrier, vendor, and rate set-up within the TMS. Customer, carrier, and vendor set-up included establishing and configuring user accounts, scheduling and conducting user training, and end-to-end testing of the system. Rate setup included the creation of carrier rate tables, establishing and configuring carrier/customer API rating credentials, and thorough system testing.

The implementation team worked closely with HOH’s Warehouse, Accounting, IT, and Executive teams to map out current state processes and develop the ideal future state. Internal and external SOP/routing guide documentation was created and distributed to each HOH location to ensure consistent adherence to the new processes.

GlobalTranz’s dedicated Account Manager met onsite with the HOH team in order to ensure a smooth implementation, including putting orders through the TMS, providing in-person training and troubleshooting.

Overall, the implementation process took approximately 30 days. At the conclusion of the process, HOH was poised to reap the benefits of a comprehensive solution, including best-in-class technology, dedicated Account Management, improved visibility, efficiency gains, defined processes, a new and automated routing guide, and business intelligence for strategic management.

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Implementation Process

Implementation Methodology

Results


Implementation of a customized MTS solution on behalf of HOH was not the end of the process; rather, it marked the beginning of a new phase in the evolution of HOH’s supply chain.

Prior to the implementation of a Managed Transportation solution, HOH was operating in a decentralized and data-poor environment with lack of alignment and little to no shipment visibility. One of the immediate effects of the newly created supply chain visibility was to reveal other supply chain challenges of which the HOH team had been unaware.

For example, with greater visibility came a better understanding of the nuances of HOH’s final mile delivery. Apparently, some receivers require extensive inside deliveries that HOH was not fully aware of, requiring the driver to take the delivery inside, remove the product from the pallet, and take the pails of product down multiple flights of stairs to a storage closet. Gaining awareness of the additional time and service required for these deliveries allows HOH to better schedule deliveries and charge more appropriately for this service. As a result, the GlobalTranz team developed a process by which, upon occurrence, GlobalTranz notifies the HOH team of all instances when special delivery requirements are necessary. GlobalTranz captures the occurrence in the TMS under the location file, and notifies the HOH warehouse to do the same in order to streamline deliveries to these locations.

This improved visibility and control also created opportunities for improved strategic management of the business, cost-savings, and efficiency gains:

Dynamic Pricing Data capture and analysis has allowed HOH to adjust shipment pricing on a per-customer basis. Based on the service levels desired by the customers, the cost target can be efficiently changed, allowing the HOH team to find the sweet spot balancing cost and service for each customer.

Improved Strategic Management:

Ultimately, GlobalTranz’s Managed Transportation solution delivered the following results:

Cost To Serve A greater understanding of the cost to serve its customers ultimately allows HOH to drive greater profitability.

Organizational Alignment Each HOH facility utilizes unique processes, however, it is critical that these processes are aligned with the overall corporate strategy. Greater visibility and control through the MTS enables both standardization and customization where appropriate.

Optimization GlobalTranz leveraged its network to replace a carrier that routinely required 3-4 days for a transit with one that could expedite shipments by 1-2 days, given proper advance notice, while still representing a significant savings vs. the next best national carrier.

Cost-Savings & Efficiency Gains:

Route Guide Compliance While reviewing the HOH invoicing, the GlobalTranz team learned that one of the HOH branches was not adhering to the route guide and was not always choosing the least-cost option. This information was shared with the HOH team and corrected, ensuring that HOH realizes its full potential savings.

Active Carrier Management The TMS enabled the capture of the necessary data for determining which carriers to retain and which to remove from the route guide, ensuring the optimal balance of cost and service.

Reduced HOH’s costs by approximately 15% overall

Eliminated at least 10 hours per month of tedious manual processes

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In addition to the immediate results, HOH is in a position to utilize data and business intelligence to drive change management and continuous improvement throughout their organization:

The GlobalTranz team supplies a monthly report of all missed savings due to route guide noncompliance, as well as the reason codes for each miss. The GlobalTranz team works with the warehouses on an ongoing basis to ensure proper reason code usage.

The shipment data collected by the TMS allows the HOH sales team to identify customer order patterns in order to drive increased sales and also to better manage customers so that potentially loss-making last-minute rush orders are avoided.

Customer-level reporting also provides visibility to transfer procedures and the opportunity to discern patterns to create scheduling and help drive consistency.

GlobalTranz is conducting an analysis of inbound shipment data in order to identify additional efficiencies and cost savings.

HOH and GlobalTranz are currently exploring other supply chain consulting projects, including cost to serve insights, SKU rationalization, the transition of Vendor inbound freight to collect, and more, to drive additional value for HOH.

We could not be more pleased with the value that GlobalTranz has delivered for HOH,” said Mr. Hutchison, “and we look forward to identifying areas in our supply chain where the GlobalTranz team can provide additional expertise and value.

- Reid Hutchison, HOH Director of Operations

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Continuous Improvement


GlobalTranz is a technology company providing award-winning cloud-based multi-modal Transportation Management System (TMS) products to shippers, carriers, 3PLs and brokers. GlobalTranz is leading the logistics software and services market in innovative technology that optimizes the efficiency of freight movement and matches shipper demand and carrier capacity in real-time. Leveraging its extensive independent agent network, GlobalTranz has emerged as a fast-growing market leader with a customer base of over 1 million product users and 25,000 shippers. In 2018, Transport Topics named GlobalTranz a Top 10 largest freight brokerage firm in the U.S.

To learn more about GlobalTranz, please contact us:

www.GlobalTranz.com

866-275-1407

[email protected]

case study - globaltranz · hoh water technology, a family-owned business based in palatine, il, is...

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