Schneider Logistics fashions new SCM concept for the paper industry
A top executive of a large supplier in the automobile industry is reputed to have said: "As soon as a customer orders a car with pure leather seats, General Motors wants the cow in the field to start trembling."
This hopefully apocryphal statement can be seen as an accurate summary of recent developments in business and industry.
Over the past few years, most companies have focused on improving their internal processes. In the majority of cases, this phase has now been completed, and commercial and industrial companies are currently concentrating on optimising interactions between individual firms. Companies are not only using sophisticated supply chain management systems (SCM) and innovative computer-based products to cut costs, however.
When planning, drafting and implementing SCM solutions, they have also the following goals in mind:
• avoidance of duplication,
• improvement in the quality of their production processes,
• reduction of transit times,
• improved transparency of order management,
• reduction of waiting and storage times,
• creation of «shared values» for all companies involved,
• establishment of continuous information flows and integrated databases (without troublesome partitions and interfaces),
• integration of e-commerce, warehousing and logistics and
• introduction of customised processes.
Schneider Logistics ahead of its competitors
The objectives mentioned above were some of the main considerations that led to a major contract being awarded to the large American logistics provider Schneider Logistics Inc. In March this year, the company headquartered in Green Bay (WI) reached an agreement with Blue Ridge Paper to provide a fully outsourced supply chain solution for its products. Blue Ridge Paper produces packages and paper for the food service industry and is based in Asheville (NC). According to Schneider Logistics,
Blue Ridge Paper is the second largest producer of packages for milk and soft drink products in the United States.
Under the terms of the agreement, Schneider Logistics will take over order management, shipment planning, carrier management, damage claims administration, performance reporting and network engineering. Schneider Logistics will also manage a multi-modal transportation network of inbound and outbound freight for the eight manufacturing facilities throughout the United States, Mexico and Canada.
"We were impressed by Schneider Logistics’ supply chain experience, along with its infrastructure and technology-based services," said Max Baumgartner, director production planning/logistics of Blue Ridge Paper.
"We are confident that Schneider Logistics’ services will help us meet our business objectives of managing costs and improving shipment visibility, reporting capabilities and service."
Schneider Logistics was selected through a competitive tender process. Blue Ridge preferred Schneider Logistics to its tough competitors because of its considerable technological advantages.
Chris Lofgren, CEO of Schneider Logistics, was very pleased with the new partnership. "We are delighted that we can make an immediate and positive impact on their supply chain by providing cost-effective services and carrier optimisation," Lofgren said. He called the agreement with Blue Ridge Paper a "major new win" for Schneider Logistics.
Only two months after signing the contract with Blue Ridge Paper, the US logistics provider announced that it had delivered an enhanced version of its "MySumit" application to the Internet. With this step Schneider has become an «applica-
tion service provider». "This move provides shippers of all sizes access to our powerful proprietary technology at a fraction of the cost and with less risk than if they developed such technology internally. With
The «Rate Server» allows customers to store and retrieve comprehensive rate contract terms. The «Planner & Optimizer» helps them to plan cost-effective domestic or international shipments. The third tool is called «Transportation Manager» and allows users to manage freight from shipment planning through delivery.
Substantial cost savings
The «Supply Chain Integrator» is the centrepiece of the applications, combining cost rating, planning and optimisation and transportation management technology and providing complete transparency throughout the supply chain for shippers and all their partners. The fifth tool is a «Carrier Partner Program». It is designed to meet the needs of carriers as its name indicates. According to Schneider Logistics, participating carriers can make substantial savings on fuel, tyres and maintenance through this web-based information system.
But there is more to come: «MySumit» also offers extensive online freight payment services. The carrier enters its invoice onto the Internet. Then the customer checks the invoice and makes a freight payment.
Errors and overbilling can therefore be avoided.
Last but not least, the computer-based product provides a program for interactive analysis. It specialises in data processing and in identifying weak points and hidden costs in the supply chain.
The «MySumit» application leverages Schneider’s sixty years of transportation experience with state-of-the-art technology to reduce supply chain costs for shippers,»
Lofgren continued. «By taking full advantage of the
Schneider created these tools to reduce the number of required personnel and to cut inventory costs. In Lofgren’s opinion this helps to improve customer service.
As already mentioned at the beginning of this article, a large number of businesses in various sectors of the
industry have already integrated supply chain management into their company structures. And it is not surprising that it has caught the attention of other branches as well, particularly the paper manufacturers:
1. These companies have already exploited all their internal potentials for saving costs.
2. «Application-hosting» has established itself as an everyday tool in the Internet.
3. The timber and paper manufacturing industries are also undergoing a process of streamlining and consolidation.
Schneider Logistics at a glance
Schneider Logistics was founded in 1993. The company currently employees about 1100 people and manages a network of 1300 carriers. Annual freight turnover amounts to USD 6.2 billion or about FUR 6.9 billion. In the logistics provider ‘s own words, it has more than 250 customers, including large multinational corporations, industry consortia and Internet market places.
Schneider Logistics Inc. is a wholly-owned subsidiary of Schneider National Inc., Ashwaubenon (WI), one of the largest truckload transportation carriers in the United States for complete loads and intermodal transport. 12,000 contract drivers and independent companies work for Schneider National. A year ago, the company management announced that it intended to "spin off" from Schneider Logistics. The transaction was planned for the end of 2000. At the end of June 2001, however, Schneider National declared that it would wait until the economic climate had improved before puffing its subsidiary on the stock exchange market.
