why freight estimating and quoting are critical to customer service and profitability at xse group
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Why Freight Estimating and Quoting are Critical to Customer Service and Profitability at XSE Group. Hosted by: Craig Baratta, Director of Operations & Information Technology Diego Fernandez, Senior Manager, Premier Group. - PowerPoint PPT PresentationTRANSCRIPT
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Why Freight Estimating and Quoting are Critical to Customer Service and Profitability at XSE Group
Hosted by:
Craig Baratta, Director of Operations & Information Technology
Diego Fernandez, Senior Manager, Premier Group
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• Leading wholesaler of imaging products, with a selection of OEM and compatible printer, fax, copier and data media products. Also offer print management solutions that integrate the sales, service and supplies of printing
• In business for over 20 years.• Revenue growth of 40% over the last 4 years• Three distribution center model – CT, TN, CA• Operate under three “brands” – ImageStar (wholesale), Aztec
(leasing and service), and Tonerworld.com (direct to consumer)• Two of three warehouses opened within 18months
Overview of XSE Group
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JD Edwards usage
• Started running JD Edwards in 2000• Currently have 86 users on the system• Run Financials, Distribution, integration with custom
WebSphere app for web based orders• Currently at release level Xe SP24• Final stages of 9.1 upgrade underway
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Infrastructure 2004
Pennsylvania
Middletown
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Infrastructure 2005
Buffalo
Pennsylvania
Middletown
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Infrastructure 2009
San Clemente
Buffalo
Miami
Pennsylvania
New York City
Tarrytown
Middletown
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Infrastructure 2010
San Clemente
Buffalo
Miami
PennsylvaniaSpringfield
Providence
New York City
Worcester
Tarrytown
Middletown
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Infrastructure 2013
Fresno
San Clemente
Chicago
Memphis
Buffalo
Miami
PennsylvaniaSpringfield
Providence
New York City
Worcester
Tarrytown
Middletown
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A couple of “beauty shots” of part of our warehouse …
Upper level, with conveyor to lower level …
Lower level, packing and filling area …
Warehouse is about 35,000 Square feet
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• 1995-2012: Next day delivery nationwide at UPS Ground rates– One warehouse in Middletown, CT– Aggressive rates and fuel surcharge cap with DHL– New UPS rates, while discounted, see significant increase over DHL– Overall freight subsidy projected at $3MM if no action taken– Begin a shift to 2day model for all customers
• 2012-Present: Two additional warehouses– Increase 1-2day coverage with ground service to 80+% of zip codes– Next/Second day subsidy decreasing from 78% of total shipments to 25%
Wholesale Business Model
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January 2012
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XSE was subsidizing $3MMin freight each yearo Goal was to reduce subsidy by $1MMo Increase billable freight from 40% to 65%o Reduce freight cost as a % of total sales from 6% to 3%o At the time 78% of all orders Shipped Next day and
22% were ground
Business Challenges - 2012
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Research
Worked with UPS and Fedex to determine placement to increase 2 day ground reach
Analyzed our competition for freight programs o Found most had standard 2 day ground programso All charged a $2.50 or higher handling fee separate from Freighto All charged small order fees for orders under Specific $ amounto Competition was determining freight rates based on UPS
published rates and often charged full load or aboveo All were charging more than UPS published saver rates for
NEXT DAY Service
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Open 2 more warehouses Temporarily subsidize shipments during transition phase Default all of our customers to ground shipping as our standard Develop standard minimum freight deals for reps to offer based
on MOT Create multiple freight options in JDE for each warehouse and
each MOT so that we could offer customized freight by MOT and location
Pick up regional freight carriers that would add strategic benefit for 1 day ground transportation
Create ground programs for all customers that were previously given a next day freight program that would be better cost savings than their current program
Business Challenges - How do we get there?
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• Manage Multiple Carriers and Modes of Transportation– Maintain rates by weight, by warehouse for each
carrier/mot– Must be able to compute and upload in bulk– Mechanism to assess handling fees and insurance– Ability to provide price breaks and free freight at
certain dollar breaks as well as small order fees
Business Challenges - JDE
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XSE was subsidizing 3mil in freight each yearo Goal was to reduce subsidy by 1 milo Increase billable freight from 40% to 65% - We are currently
hovering around 60%o Reduce freight cost as a % of total sales from 6% to 3% - we
are currently at 3.14%o At the time 78% of all orders Shipped Next day and 22% were
ground- Now 75% of packages ship ground, 15% ship next day and 10% ship 2nd day air.
Business Challenges – 2013 – Where do we stand?
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• Default freight programs by Carrier/MOT/Company– Each Business Unit needs different options for
delivery with their own company defaults– All companies offer variants by Bill-To and Ship-To– eCommerce applications must be able to use identical
calculations
Business Challenges - JDE
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August 2012
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June 2013
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• Inventory Branch Allocation by Destination Zip– Inventory Branch(SDMCU) represents physical
warehouse location– Must be selected based on time in transit and UPS
zone to allocate each order to the closest warehouse to the destination
– Destinations overridden at point of sale, not from address book records
Business Challenges - JDE
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April 7-11, 2014The Venetian and Sands Expo CenterLas Vegas, Nevada
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Attend COLLABORATE 14 to hear high-level, strategic education for the JD Edwards audience. Register through Quest to receive exclusive JD
Edwards updates, materials and networking events.
Registration OPEN! Early Bird rates end February 12, 2014.