Hitting a Freight Management Bull’s Eye

Ben E. Keith, one of the oldest and largest foodservice distributors in the United States, had an increasing need to make its 30,000 yearly inbound freight loads as full and efficient as possible. So the company took a hard look at its logistics program and zeroed in on its antiquated transportation management system (TMS).

Ben E. Keith, headquartered in Fort Worth, Texas, is a heavy hitter in the crowded food distributor playing field. It offers a full line of food service products: produce, frozen foods, meats, dry groceries, paper goods, and equipment. The foodservice division serves 14 states and includes a beverage division.

The company employs more than 4,000 people and purchases more than 2 billion pounds of product from close to 2,000 vendors. It services about 18,000 retailers throughout Texas. Ben E. Keith has to manage all of this product as it flows through its eight distribution centers (DCs).

A serendipitous encounter at a trade show led the company to ArrowStream, a foodservice logistics software developer, and to its performance management platform. Crossbow sits on top of the company’s TMS, and gives Ben E. Keith access to the information it needs to see into its routes, loads, and timing in a more usable way, leading to consistently fuller trucks and lower freight costs.

Most importantly, Crossbow allows the purchasing and logistics departments to partner together to increase managed freight—by 20 to 30 percent in some departments.

Owen Stull, Ben E. Keith’s director of logistics, has to keep track of all these moving parts. He says the journey that led to incorporating Crossbow software was indirect. In 2014, his department started seeing some stagnation in its mature logistics program. After 13 years in place, the transportation management program had become antiquated.

"We knew the TMS was not up to date," he says. "And the way our program and company were growing, we needed to see what we could do to be more efficient." The company was not looking at optimization at that time, but the more it investigated TMS programs, the more it realized a new system was needed to grow to the next level.

"We had conversations with our logistics managers at the DCs, and from those discussions, we developed a wish list for the new TMS," Stull recalls. "As those discussions evolved, we realized we needed a new tool to capture the freight’s full potential.

"As we were evaluating the different systems on the market, we couldn’t find one that addressed our issues," he says. "Ben E. Keith was good at monitoring progress, but did not have a system to help us make intelligent decisions."

TIME FOR AN UPGRADE

Stull and his DC managers were searching for a bigger and more actionable picture of their program. With the old TMS, in order to retrieve data to make decisions, for example, the company needed to download data into spreadsheets and sift through a lot of information.

Stull and his team were frustrated because by the time they came up with a productive idea, it was already outdated. The team needed a way to access the data in real time, and be able to take immediate action based on that data. They also wanted a centralized view so the general office could offer help to the DCs.

The company needed a bird’s eye view of all its moving parts. "We do a lot of load consolidations," Stull explains. "Our networks are big, and we could not figure out where the changes were needed to prevent situations when one truck would be overloaded while another truck was empty.

"If we could affect the order sizes, we could do a better job of routing the orders," he adds. "But because we could not see the whole picture, we would often fix one problem and create two more."

Ben E. Keith made its TMS choice when it upgraded its software through a foodservice group that the company belongs to. And although the new system allowed for load tendering and certain levels of auto routing for simple loads, it did not have the deep level of optimization the group needed.

Then Mike Roach, who was president of the company at the time, happened to visit with ArrowStream at an industry trade show, and started the discussion about Crossbow, the new Software-as-a-Service (SaaS) technology ArrowStream had developed.

Stull’s search was unexpectedly over. "We found out ArrowStream was thinking along the same lines as we were about load optimization, so from the beginning, it was a natural fit," Stull says. "Crossbow concentrates on inbound logistics and food service. The platform sits on top of the TMS, so we could integrate it without turning our operation upside down."

"Ben E. Keith is buttoned up managing their supply chain," says Bill Michalski, chief solutions officer at ArrowStream. "It has a process for managing inbound freight and everyone is aligned with it. But it was seeing unpredictability and volatility, and had a project underway to figure this out. But it is not something you can take on manually—there is too much data."

IMPROVING EFFICIENCY

The first thing ArrowStream’s team did when the companies started working together was set up a structure to see the inefficiencies. They established plans for the freight lanes and began measuring the buyers’ adherence to those plans. That was crucial because it offered the metrics to measure the impact on freight costs.

Then they looked at what they could do to create freight efficiency. This is the ongoing part of utilizing the software. For example, Ben E. Keith had a set of vendors with perishable products and one-way moves with varying volumes. Using the information Crossbow extracted and compiled, they changed the configuration of the loads and routes for those vendors and were able to take 20 percent of the trucks off the road.

"We can group vendors into super vendors, and then sit down with purchasing to discuss the merits of grouping those vendors together," Stull says. "And they can see if it is a good idea from their cycle standpoint and make sure it is not damaging inventory levels or increasing carrying costs.

"Knowing up front that it will work is a lot better than what we were doing in the past, which was hit and miss," he adds.

"Crossbow allows companies to analyze their order patterns and identify opportunities to change them without negatively impacting inventory levels," Michalski says. "There is an ingrained assumption that what is good for one side is not good for another.

"Inbound logistics typically asks purchasing to buy in larger increments, but that assumption doesn’t reflect reality," he adds. "You can manipulate the patterns to order more frequently and yet fill the trucks better.

"If you bring in freight from a vendor twice every month with full truckloads, no one is ever going to think about or route those trucks any differently. With another vendor, you are only partially filled weekly," Michalski says. "The Crossbow system will find that you can take those full trucks, run them weekly, and swing by and get the inventory from the other vendors. You can run four trucks instead of six trucks."

HEADING INTO THE FUTURE

The two companies worked together successfully to train the staff. "It has been a big change from how we were doing business in the past," says Stull. "Using the technology is easier than getting all our supply chain partners to be proactive. They are used to being reactive. The buy-in has been good."

Ben E. Keith has seen some impressive results:

• Freight under management increased by 3 percent.
• 55 percent of all managed freight is now measured against pre-optimized ordering and routing plans.
• 77 percent of orders meet the pre-optimized targets.
• Increased freight consolidation drove an average of 8.7 percent year-over-year reduction of total inbound freight costs.
• For orders projected to fall short of freight financial targets, 14 percent of potential savings loss is avoided through real-time monitoring and corrective action.

Stull says the technology is a success story, and he and his team are continuing to explore Crossbow’s functionality. They are also extending their partnership with ArrowStream as beta testers of new functions.