Many industries have complex supply chains, but the food and beverage industry has some of the most unique issues. A great example of sophisticated transportation execution is Topco Associates, one of the largest retail grocery cooperatives in the United States. Topco provides sourcing, innovation, packaging, label management, quality assurance and nutritional assistance through store brand and private label services. The true competitive advantage Topco provides to members is based on the sourcing and aggregation of its volume. In addition, Topco offers a number of logistic services to its members, including managed freight services, consolidation distribution centers, dairy perishable distribution centers, and rapid replenishment.
Because of the complexity of member labels – 74 brands, 44,000 different items, and more than 1,000 different supply points – as well as the transactional nature of the company, Topco needed a transportation management system (TMS) with robust visibility and reporting capabilities. Topco also wanted to maintain control of its freight, while not adding any headcount.
After reviewing several solutions and deployment options, Topco selected a software-as-a-service (SaaS) solution. Since the nature of the SaaS model allows for an ideal cost structure for many organizations, Topco found the return on investment was large and easy to prove.
To benchmark and gain visibility into the supply chain, Topco leverages a freight rate intelligence tool that is integrated with the TMS. The tool aggregates shipper and carrier market transactions for dry van and refrigerated shipments across North America, and it tracks contract as well as spot markets. This freight rate intelligence tool also helps Topco by serving as a basis for procurement planning while providing an accurate, real-world window into the transportation market.
“The benchmarking tool is fantastic. It allows us to put in any two points and quickly understand what the price we should be paying is against what we are actually paying,” said Michael Cavill, Corporate Logistics Manager at Topco. “By using this tool, we are able to see that we have a 12% opportunity on all our lanes; we can put in an RFP to improve our savings opportunities.”
Another opportunity for Topco was developing a regional carrier base. By leveraging a procurement technology platform, Topco sources more carriers to continually expand its base, which in turn provides far better pricing and bid optimization, as well as contracting rates, capacity and lanes. Topco continues to see the majority of its savings coming from this technology.
A number of Topco’s transportation pressures – reducing costs, increasing volume, keeping headcount constant, improving service levels, and improving metrics that are reported back to the business – were addressed by implementing the SaaS TMS. Topco is able to better manage its transportation process by utilizing reporting capabilities to:
- Track by carrier real-time acceptance and identify carriers that are not approving or accepting tendered loads very often;
- Identify paid versus tendered versus upcoming expectations;
- Run one-time service reports by lane, by carrier or by warehouse.
Topco expects to double its activity volume in the next year, and by leveraging transportation management technology, there will be very little impact to human resources in logistics. Furthermore, the visibility and reporting capabilities of the TMS provides Topco with critical metrics that allow the company to be proactive in a number of situations and focus on root-cause issues and continue to expand its membership network.
Chris Timmer is Chief Operations Officer at LeanLogistics. Chris is responsible for overall strategy, positioning and growth of the LeanLogistics solutions, including SaaS platform development and deployment and the expansion of the company’s service footprint internationally. Chris has over 20 years of experience in transportation and logistics management and he regularly speaks at industry events and has been recognized as a leader in the SaaS solution space.