Hardly asleep at the switch, Rachel Mantle Levy, director of manufacturing operations for Sleep Innovations (www.sleepinnovations.com), is using a transportation management system (TMS) to streamline the company's order management procedures.
Overhauling what had been a manual process was one of those tasks keeping Levy awake at night. Sleep Innovations, a manufacturer of pillows, foam mattress toppers and other bedding products, does not sell directly to consumers. Instead, it sells through large and small retailers, catalogs, clubs, department and specialty stores.
The New Jersey-based company opened its first manufacturing plant a year ago; prior to that, fabrication had been outsourced. According to Levy, manufacturing was brought in-house “partly because of growth in our business and partly to take control of our own destiny.”
The company located its California plant in Rancho Cucamonga because that's where many of its foam suppliers have their plants, Levy explains. “Foam is our largest component so we want to minimize travel distance to minimize freight cost.”
Depending on the Sleep Innovation retailer, it either delivers to a warehouse or distribution center (DC). Since some retailers have either eliminated their DCs or never had them, Sleep Innovations will deliver directly to their stores.
Since its products are made to order and are pretty large, the company doesn't use warehousing. On average, it ships between five to 10 truckloads a day per plant. “Product is waiting on the floor for the trucks to back up,” says Levy. “Depending on the retailer, it can be floor loaded or on pallets. We are constantly having raw material come in and finished goods go out, all day, every day.”
In dealing with the country's large retailers, Sleep Innovations has to follow its customer's routing guides. Levy says that in meeting customer shipping requirements, 80% of what is shipped goes freight collect, either truckload or less-than-truckload (LTL).
“We route orders based on their needs that we receive by phone, fax, web or e-mail,” she explains. “They all have their own transportation back-end systems, and tell us which carrier to use.”
For load building, because of the nature of its products, Sleep Innovations cubes out rather than weighing out. Levy provides an example of the challenge. The company may receive 400 orders from one retailer, all of which may have to ship to one DC. “So we group these orders together to derive the weight, number of cases and the cube,” she explains. “Then we must go to our customer's web site and inform them of the date it's going to be available, the number of cases, the weight and the cube, and the pickup time. They will then tell us who the carrier is for that particular shipment.”
Although most TMS solutions include rate-shopping features, that wasn't an important consideration for Sleep Innovations since 80% of its shipments are freight collect — “We can't choose the carrier,” Levy points out. What did convince the company to adopt a TMS, though, was the opportunity to eliminate manual reports.
Going live this month with a TMS from HighJump Software (www.highjump.com) that includes order consolidation and automatic load optimization features, Sleep Innovations expects to gain real-time visibility to order status. “Our sales and customer service departments will be able to go online to locate the carrier, bill of lading, when it was shipped and other necessary data,” Levy says.
Another key benefit Levy foresees is that each plant will now have a schedule and be able to see what customers and orders are due, and which carriers are supposed to pick up on what day and at what times.
“We will also be able to provide feedback to our retailers if we have problems with certain carriers,” she adds. “For example, certain carriers are assigned to pick up certain loads and they keep canceling. The new TMS will allow us to have trending visibility. We will be recording the appointment time and actual pickup time. We will then be able to measure carrier performance. Since the retailers are the ones negotiating with the carriers, we can furnish them with our performance metrics.” LT