At a glance
Leading the New Zealand market in structural timber, plywood and laminated veneer lumber, Woodproducts NZ manufactures product from 13 major production plants country-wide. Their timber products are sold to domestic and international customers, as well as supporting Woodproducts Australia with complimentary products.
Business objectiveImprove efficiency, accuracy, visibility and achieve greater control over distribution process and costs.
SolutionA flexible and easily integratable total logistics management solution.
OutcomeA streamlined distribution process, integrated with two SAP ERP systems. Flexibility for eCargo to adapt with Woodproducts' changes and growth.
Before eCargo’s software was implemented, managing the complex distribution of thousands of customer orders each week by phone and fax between numerous carriers required huge manpower for Woodproducts NZ. Time consuming, costly and vulnerable to human error, the transport management process didn’t mesh particularly well with their SAP ERP system.
Woodproducts also wanted to improve visibility and control over associated freight costs. Reconciling invoices received from external transport providers was a very manual and difficult process, with no reliable data source to check against. “It didn’t happen as well as we wanted it to”, says Richard Shannon, Woodproducts NZ Finance Manager. “Back then our accruals were based on a standard rate held in SAP, which didn’t provide us with as accurate figures as we would have liked”.
eCargo now sits between Woodproducts NZ’s SAP ERP systems (they have 2 different versions) and their freight managers and carriers. As soon as customer orders are created in SAP by any Woodproducts' business unit, eCargo takes over, managing the entire supply chain communication process. Providing data to multiple parties and their associated systems in a standard recognised format requires only a single interface.
Since the original implementation over 10 years ago, Woodproducts' distribution process has seen many changes that eCargo’s flexibility has been able to fully support. Rather than deal with numerous transport providers directly, eCargo communicates all domestic delivery requirements to a single Freight Management provider, Matrix Logistics. Matrix co-ordinates and executes transportation with their sub-contractors. eCargo is kept updated with critical information as deliveries are progressed and completed. This in turn feeds back through to Woodproducts' SAP system automatically, keeping information updated in real-time. Following a very similar process, eCargo automatically makes all export order details available to Lodestar, Carter Holt Harvey’s export and coastal shipping managers.
“eCargo is the hub bringing everything together”, says Lodestar’s National Distribution Manager, Marc Frewin. “It is very easy to use, but yet delivers all the features we need in a dispatch and freight management system. eCargo provides a standard method for communicating our freight requirements to our suppliers, and in turn our suppliers communicating back to us, in real-time. Up to date DIFOT information is sent back into our core systems for enterprise level reporting, this provides us with full visibility over our supplier and customer performance”.
Holding a rate table of agreed freight costs directly within eCargo, Woodproducts can now reconcile and verify freight invoices for payment extremely quickly and accurately. “eCargo builds up a database of all our freight movements as they occur, which we use to check that freight costs we are charged actually happened and have been billed at the right price” says Shannon. “It also enables us to accrue accurate costs between the last invoice received and month end as soon as deliveries are made”.
Woodproducts' Assistant Accountant, Tania Teddy, explains the process: “Once a freight invoice is received, we check it against the accounts receivable listing in eCargo. We can view in summary format or download to Excel for details of every order line item charged on an invoice. The reconciliation is already done for us and any exceptions requiring further investigation are very easily identifiable. Although invoices are paid through SAP, eCargo provides the verification and true costing figures for our domestic and export distribution”.
Benefits and outcomes
eCargo has enabled us to dispatch our product more efficiently; our end to end distribution process has improved in its timeliness, accuracy and visibility. We can measure our performance and get around issues often associated with large, cumbersome legacy systems that are not generally well aligned with transport managementMarc Frewin, Carter Holt Harvey, National Distribution Manager
Woodproducts' Putararu Dispatcher, Kath Pedersen tells us, “I wouldn’t want to have to go back to the old way of doing things manually, and by fax. eCargo just does everything we want it to and it’s very straightforward”. Tania Teddy agrees. “eCargo now does the hard work of checking invoices for us. Where processing weekly invoices from a single supplier used to take around a day and half effort, we’re now completing that in an hour and we trust the results”.
eCargo has done more than just provide an accurate verification and accrual process for freight charges. It’s enabled Woodproducts to effectively manage their freight costs. More complex freight rates now work in practical terms, so carriers can charge based on how complex the job actually was to complete. This has also empowered Woodproducts to select the most efficient form of transportation, minimising drop-offs and optimising loads. “It’s been a win-win for all parties and we’ve definitely banked savings. We estimate financial savings in the region of a quarter of a million dollars each year”, says Shannon.
Having a single, rather than multiple, communication interface also brings benefits in terms of ease of system maintenance. Setting up new Woodproducts sites is now an extremely straightforward process. “We’ve found the web solution works very well for us. We’ve got sites all round the country using it every day and have no complaints about speed or accessibility” reports Shannon.
Shannon, Frewin, Teddy and Pedersen all praise the collaborative eCargo approach. “The eCargo team are always helpful and extremely receptive to our suggestions”.
Frewin substantiates this; “eCargo has developed an in-depth understanding of our business, their key strength is their ability to understand a businesses logistics operations and translate these into a scalable IT solution. They have connected our multiple legacy systems and many logistics processes and delivered a single standard solution across our entire business.”
Visit the CHH Woodproducts NZ website: http://www.chhwoodproducts.co.nz/