The balancing of capital, cost and service is in some ways the essence of supply chain management. It’s depicted in a commonly used triangle framework, the ‘Supply Chain Triangle’. By adding a layer of real-time transportation visibility (RTTV) to a supply chain, new operational capabilities are unlocked, which can in turn optimize capital use, costs and service levels. South Africa-based Sappi Limited, one of the leading global providers of pulp, paper, packing and sustainable wood fibre products and solutions, shares with us examples of how Shippeo’s visibility platform has helped them transform their supply chain’s capabilities.
Sappi Europe produces 3.7 million tons of paper and 1.12 million tons of paper pulp each year across ten mills, employing over 5,300 people. Despite their dominant position within the market, they face their fair share of challenges. There is an ever-increasing supply in the market resulting in overcapacity and prompting the need for cost reduction and a greater customer focus to respond to B2B customers with increased demands. As a result, there are mounting pressures to digitize operations, with their supply chain being a key area of focus.
Sappi’s main objective is to run “a sustainable and cost-efficient supply chain that manages end-to-end flows, requiring very little intervention.” So how does a RTTV solution help achieve this goal?
A real-time transportation visibility platform helps to speed up delivery times in a number of ways. Objective real-time tracking data provides reliable and accurate insight for Sappi to optimize future transport operations, including routes and journey timings. LTL tracking also allows for more optimized loads, potentially increasing the carrying capacity of transport assets. All supply chain collaborators share the same real-time singular view of shipments. This is particularly important for a company like Sappi who works with over 300 forwarding agents and subcontracted carriers. Visibility also helps teams meet evolving B2B customer expectations by sharing more delivery information and at the same time reduces the number of contacts the customer service center receives. For Sappi, 50% of their customer service enquiries were “Where is my paper?”. By being able to share automated notifications proactively on shipment statuses and delivery ETAs they are able to dramatically reduce the number of enquiries. This of course relies on highly accurate and reliable ETA predictions, which requires a skilled data team using advanced machine learning algorithms and data cleansing techniques to achieve. Sappi has found Shippeo’s ETA calculation to be more developed and takes into account more variables than other visibility platforms.
Increased supply chain visibility helps to reduce costs in several ways for a company like Sappi. General efficiencies brought about by access to real-time shipment information, including proactive notifications for delays or early arrivals, allow for more dynamic or ‘on-the-fly’ actions to be taken, such as dynamic slot bookings at loading sites. This reduces the time vehicles are on the roads, in turn reducing transport costs and keeping warehousing costs to a minimum. Late penalties can also be reduced since accurate and reliable ETAs alert teams in advance if there is the potential for delay. There are administrative cost savings too. With paperless workflows, electronic proof of delivery helps to reduce or even avoid litigation costs. Likewise, the reduction in customer service enquiries reduces demand on team resources.
Finally, capital associated with Sappi’s supply chain activities can be reduced with better transportation visibility. When supply chain partners have more visibility of operations and stock levels for upstream materials or components, there is less guesswork involved in managing inventories. This results in lower buffers and greater stock turns, reducing the amount of warehouse or distribution center storage required. Having visibility down to the handling unit or goods level helps achieve a more efficient use of transport assets. Similarly, pallet scanning capabilities make tracing the whereabouts of returnable packaging possible, potentially avoiding considerable replacement costs.
Hear more from Sappi Europe’s Director of Supply Chain Rudi Barthels on their specific supply chain challenges, many of which are shared with other industries, and how real-time transportation visibility is helping them overcome them in our webinar recording Why transportation visibility is critical for your supply chain.
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