January 2001 | Case Studies | I.T. Toolkit

The Right Route with the Right Rate

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Can a dot.com company take complexity and cost out of supply chain management? SupplyLinks says it can.

As we head into the new year, companies now have time to reflect on mistakes they may have made when delivering goods during the holiday season. Did your goods get there on time? Did you pay the best rate? Did you choose the best carrier?

If not, a new supply chain management company that offers route optimization and landed cost calculation could position you solidly for the year. SupplyLinks, South San Francisco, Calif., is an Internet-based B2B global supply chain network that links users to multiple transportation modes and service providers through a single platform.

Founded in June 2000, SupplyLinks was formed through a partnership between G-Log (Global Logistics Technologies) and New Meadows Venture Partners, with a goal to enable manufacturers, retailers, and distributors to manage and bring innovation to their supply chain processes. New Meadows provides capital and G-Log provides the technology capabilities through its Global Command and Control Center.

The company is headed by CEO David Beatson, formerly chairman, president and CEO of Circle International and Emery Worldwide. Beatson was approached to head several dot.coms this past year, but chose SupplyLinks because it has "a compelling business model and is a good fit with my background and experience," he says.

"Our vision and strategy are simple," says Beatson. "We want to take the complexity and costs out of implementing an integrated supply chain management solution. We link all components of the supply chain, enabling our customers to transform the way they manage their businesses globally."

SupplyLinks streamlines the use of a supply chain management system, helping companies automate and simplify the processes of buying, transporting, and managing goods worldwide through a global network of service providers. Manufacturers, retailers, and distributors can manage their supply chain processes by optimizing transportation routing, fulfillment, and landed cost of finished goods.

As an ASP (application service provider), SupplyLinks gives companies access to multiple transportation modes with established carrier and forwarder tariffs.

"If customers want to know landed costs prior to making a procurement decision, we provide the ability to calculate landed cost. This includes product cost, duty fee, excise tax, and transportation cost, under the optimal solution," Beatson says.

After companies compare two different vendors with the total landed cost calculated, on the execution side SupplyLinks provides a network of service providers—LTL and truckload carriers, air and ocean forwarders, and parcel carriers—with links to these providers, according to Beatson.

"Once a company selects the right mode of transportation, we provide the ability to click and ship on our web site. This is done in a completely seamless environment," Beatson says. "We also provide complete track and trace capabilities and in-transit visibility. If something goes wrong in the process, we are able to contact the carrier to determine alternate routings that could still meet the needs of the customer."

IT and Service Providing

"SupplyLinks is an IT company and a service provider, not strictly a software provider. We enable customers to make the right routing and mode selections, implement those decisions, and follow that freight through to delivery," Beatson says. "For small to mid-sized customers, we also negotiate rates with service providers. We aggregate space, and provide customers with a discounted rate that they may not have gotten otherwise."

The logistics dot.com playing field is jammed with e-commerce companies, many of which are exchanges or auctions. That's not the SupplyLinks model.

"We try to find the optimal mode, not take a nickel off the rate per pound on a given shipment," Beatson says.

SupplyLinks sells a bundled service of IT solutions on an ASP basis to small to mid-sized companies. The company also targets B2B exchanges that bring buyers and sellers together, becoming the logistics solution that a lot of these exchanges don't address.

"We also deal with large shippers who use us as an ASP to provide transportation optimization, landed cost optimization, and in-transit visibility," Beatson says. "We use carriers' established tariffs because these carriers have already negotiated the rates. They use our solution on an ASP basis, and we download the carriers' proprietary rates, rather than using our aggregated rates."

The REACTOR

One SupplyLinks customer is ATOMIC29, Los Altos, Calif. Founded in March 2000, ATOMIC29 provides printed circuitry manufacturers with commercial, technical and human capital.

"We work with our partner manufacturers and look into what makes their business more profitable," says Jeremy Louwerse, ATOMIC29's vice president of e-business. "That's where SupplyLinks and logistics come into play. Logistics is an important element of the printed circuit manufacturing industry's business model that hasn't been focused on much in the past few years."

ATOMIC29's e-business application allows manufacturers to become e-business enabled, providing end users with online quoting, ordering, and technical services. SupplyLinks gives ATOMIC29 the ability to help clients manage the transportation planning and delivery of their products throughout the world.

"We are always on the lookout for tools to help our partners operate a more efficient and profitable business," says ATOMIC29 CEO Frank Lonergan. "Manufacturers of printed circuitry are under increased pressure to provide more visibility into the supply chain and deliver product with just-in-time precision."

SupplyLinks gives ATOMIC29 a seamless solution that allows the company to provide its partner manufacturers with the logistics solution they can access through ATOMIC29's web interface called the REACTOR, Louwerse says.

The ATOMIC29 REACTOR is a browser-based application that provides printed circuitry manufacturers with complete e-business functionality. The application can be seamlessly integrated into a manufacturer's existing online presence, or function as a stand-alone resource.

"When partner manufacturers need to manage the logistics piece, they enter into the SupplyLinks solution via our REACTOR," says Lonergan.

This allows them to optimize a logistics solution, or get a landed cost optimization at the time of quote, so ATOMIC29 partners can provide their customers with a more realistic quote, taking in all aspects of the transaction.

"Prior to this, partner manufacturers had to guess what the actual landed costs would be, and they weren't able to weigh different options," Lonergan says. "Once the deal is done, the SupplyLinks solution gives them a click-and-ship solution. We can turn over the whole logistics process to SupplyLinks."

ATOMIC29 has been working with SupplyLinks for the past six months.

"We chose SupplyLinks because of its people. They seemed to best meet our goals economically, and are well versed in logistics. We didn't want to find an IT provider that knew the printed circuit board industry. We wanted to find the best IT provider in the logistics industry," says Lonergan.

Mick Fountain, divisional chief executive for Exel's global freight management and technology group, a $2.6-billion company that specializes in supply chain services, uses SupplyLinks for a different purpose than ATOMIC29.

"SupplyLinks is a sales channel for Exel," Fountain says. "Exel has a link on the SupplyLinks web page. When customers choose their transportation mode, they can access our services right there. The relationship could, however, end up becoming more in depth than this because there are various other e-commerce ventures that Exel may want to get involved with that link in with what SupplyLinks and David Beatson do."

Fountain's division has a similar relationship with another IT provider, but not to the scale and potential of the relationship with SupplyLinks, he says.

"There are numerous exchanges and markets on the e-commerce scene, but at some stage they will need to be profitable. Who survives will be determined by the value proposition presented, its compelling nature, and ultimately, the execution. I think SupplyLinks can succeed," Fountain says.

Other Benefits

SupplyLinks is used on an ASP basis, so companies don't have to license the software. They get a pay-as-you-go solution.

"It's a completely internationally focused solution, aimed at the needs of the transport buyer more than the carrier. We're building this model to support consignees and empower them to have complete visibility into freight that is moving inbound to them," Beatson says.

ATOMIC29 has not been with SupplyLinks long enough to determine how much money it has saved, but that isn't the company's focus.

"It comes down to efficiencies," says Lonergan. "If we can use logistics to more efficiently manage transactions to the manufacturers' advantage, that can add to the bottom line for the finished product. Optimizing this process brings a lot of benefits."

Another part of the SupplyLinks solution includes not only price, but also carrier quality rating. The company provides users with the optimal mode solution, and options on each of those modes. In addition, users get access to both the price and quality ranking that has been established for that particular transportation partner, according to Beatson.

SupplyLinks is having discussions with several companies that could be announced as customers in the future. Beatson says the company is also planning to partner with companies in the ITL (international trade logistics) space as part of the solution it offers.

"What it comes down to is that the SupplyLinks solution is bulletproof," says ATOMIC29's Louwerse. "Technology can be either too robust or too simple; sometimes it doesn't get to the heart of the matter. But SupplyLinks does."

Go to www.supplylinks.com or www.atomic29.com for more information on both companies.

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