Shipper centralizes supply chain operations with SMC³’s freight transportation sourcing solution
Authored by SMC³ on March 3, 2020
The world of LTL is slow to embrace change. Business anachronisms permeate current supply chain processes. These vestiges of the way things used to work define the LTL freight transportation procurement process of many modern shippers. But for one shipper, automating its LTL freight transportation procurement process held the key to streamlining its business.
Founded in 1980, Central Garden & Pet has spent the last three decades growing from a small garden supply company to a provider of a range of products from dog chews and bird seed to soil supplements and natural insecticides. For much of its life, the company shipped these disparate goods via LTL and truckload carriers to retailers throughout the country, relying on each business unit to negotiate directly with their freight transportation providers. This arrangement worked fairly well for a small company, but as Central Garden & Pet expanded, leadership decided to consolidate decision making.
Jesse Burnett, the company’s transportation project manager, helped centralize the transportation decision making in 2015 with SMC³’s Bid$ense®. Before Bid$ense, every business unit operated independently as far as negotiating with carriers.
“There were a lot of different things just floating around,” he said. “We didn’t have master agreements in place; no national pricing at all. The pricing from carriers was just all over the place, depending on where you were.”
The transformations he saw with Bid$ense were immediate. Burnett has been using the tool about every other year since its implementation at the company. Central Garden & Pet’s $19.6 million 2019 LTL bid saved the company just more than 9 percent when compared to its historical average. For Burnett, though, bid automation extends far beyond savings.
“Bid$ense really just gave us the platform where we were able to combine all these different locations, all these different freight classes, and get it all into one centralized location and provide us with a pricing output from a corporate, strategic level,” he said.
“We knew that we weren’t getting the best pricing offer from our carriers just because nothing was centralized,” he continued. “We knew that if we combined everything from all these business units and paired it with one corporate offering, then it would drive some cost benefit with it.”
When the company initially decided to centralize bid procurement, executives researched a number of different bidding methodologies and technologies. In the end, though, Burnett found that Bid$ense was both widespread and well known, and that his carrier partners already knew how to use the application. Burnett also highlighted the data-cleansing process as a major benefit, saying the rigorous process ensures that carriers always return the best price.
With its robust, efficient communication and analysis protocols, Bid$ense achieves significant savings measured not just in dollars, but also in hours for IT, freight payment and procurement departments. The days of choosing the wrong carriers, the wrong service levels, the wrong discount scenarios, and even the wrong base rates are gone. And while Bid$ense has helped Central Garden & Pet unify its operations and streamline processes, price is a major driving factor in Burnett’s decision to continue utilizing the product.
“It definitely has helped drive savings,” he said. “Any time you go out there and you drive that competitiveness with the carriers and they know they’re in a bid environment, it seems to sharpen their pencils.”
With Bid$ense, shippers can develop a strategic implementation plan that saves them time and money, but also helps them create strong relationships with their carrier partners. These carriers appreciate the solution’s data-cleansing process; when carriers receive a complete shipment history and future volume forecast, they don’t have to guess on pricing. Carriers that receive more data from shippers get a complete picture of that shipper’s freight, allowing them to accurately plan instead of simply preparing for the worst-case scenario. Clean data presented through an automated system can lead to both bigger shipment savings and a lasting partnership between carrier and customer.
Whether customers are looking to streamline LTL bidding by automating the RFP process or create an entirely new, centralized sourcing process, Bid$ense has the analytical horsepower to get the job done.