technologyreview
BY MARK B. SOLOMON, SENIOR EDITOR
TM S’s
low-hanging fruit
Leveraging transportation management systems for
carrier selection can yield big gains, advocates say.
AT OLYMPIA CHIMNEY SUPPLY CO., A MAKER OF CHIMNEY LINERS AND
components, using a manual system to select its freight carriers was tantamount to the
“devil it knew.” Trouble was, the status quo was giving the company a devil of a time.
Scranton, Pa.-based Olympia would take orders over the phone, then research up
to 10 transportation agreements, ZIP code ratings, and fuel surcharge charts to iden-
tify what it thought to be the low-cost carrier. But that process proved both time-con-
suming and imprecise. Carriers’ delivery estimates and prices from published rating
guides were not always accurate—which could create difficulties for Olympia. The
chimney supply specialist offers free shipping on 30 percent of its orders, which
means it absorbs those costs. Furthermore, the company is in a commodity business,
Using a transportation management system (TMS) developed by Transite
Technology Inc., Olympia in 2008 automated its carrier selection
process. The results were noticeable right away. Least-cost shipping
options were instantly available to Olympia’s service representatives,
enabling them to give customers real-time information on shipping
costs and the best carrier to handle the delivery. The software also
ensured that company reps were quoting correct information on
service levels. On top of that, the system provided financial
reporting data and conducted freight audits.
For Olympia CFO Scott Brickel, the experience was an eye-
opener. “Some of our reps are really familiar with certain car-
riers and thought they knew who was providing the best
rates,” he says. “We found out that wasn’t true.”
Olympia’s conversion came as the supply chain was being
roiled by record-high oil prices. But Brickel says the newfound effi-
ciencies helped offset rising fuel surcharges. In fact, in 2008, Olympia’s
shipping costs as a percentage of sales remained about the same as they
were in 2007.
