Sapa Puts a Dent in Freight Costs
An aluminum solutions producer extrudes costs and ineffi ciencies with a cloud-based TMS.
As the world's largest producer of extruded aluminum solutions, Sapa Extrusions' work crosses into nearly every industry segment, including automotive, transportation, building and construction, and thermal management. Sapa's extrusion plants take aluminum alloy in billet form, and force it under high pressure through the shaped opening of a steel die to create an extruded shape or "profile." Based in Rosemont, Ill., Sapa maintains locations in more than 40 countries, and operates 23 production facilities in North America that make custom aluminum profiles of different sizes and capacities.
"Extruding aluminum, which is a tremendously versatile metal, brings a variety of key benefits that have helped our company grow," says Kevin Mitchell, Sapa's North American manager of transportation and logistics.
Despite its success, Sapa had an information problem. The range of locations in North America—not only geographically but also in terms of size and type of operations—meant that the company generated a lot of data, such as cube, weight and route sequence, available capacities, and delivery windows. But money was leaking out the front doors of its facilities across companies because Sapa was not harnessing that information in order to operate efficiently.
Also hindering its ability to operate efficiently was a lack of accurate visibility into the freight it was moving across North America. "We also saw a lot of opportunity for cost savings," Mitchell notes.
The company needed to assemble all its data into one place to enable key performance indicator (KPI) reporting, especially because its facilities across the company are not uniform; some companies became part of Sapa through acquisition.
Sapa lacked a central location to track what was going on across its organization. This led not only to redundancies, but also to what Mitchell calls "maverick freight purchases"—having to request last-minute quotes for unplanned shipments.
Looking to the Cloud
To address these issues, Sapa partnered with Cloud Logistics, a West Palm Beach, Fla.-based transportation logistics solutions company that provides transportation management solutions for the global supply chain market. The two companies had not previously worked together. Mitchell found Cloud Logistics through an online search.
"I looked at about 10 different transportation management systems (TMS) before selecting Cloud Logistics," he recalls. "Cloud Logistics offered systems that were easy to use, and easy to modify; those were the biggest factors that led me to select it over other providers.
"Cloud Logistics saw our vision and identified our needs immediately," adds Mitchell.
"With multiple companies, each one running its own enterprise resource planning [ERP] system, Sapa needed a single, centralized system to provide factory-to-customer optimization and visibility," says Mark Nix, CEO of Cloud Logistics.
For example, as part of its work in North America, Sapa acts as a major automotive supplier. To make those deliveries, the company heavily leverages flatbed carriers for multi-stop shipments across its network. In the past, information about these deliveries was missing, but for the company to improve its operations, it needed to identify and fix any transportation inefficiencies.
"For example, some of Sapa's flatbed truckload shipments have 15 stop-off deliveries, so they must quickly find the best carrier, based on performance and price, to move the load," says Nix.
To address the issue, the two companies created a solution that used Cloud Logistics' existing APIs for Oracle, SAP, Microsoft, and other ERP business management systems while also using "comma-separated value uploads," which involve "taking 45 seconds to manually key in a shipment for smaller sites that ship 10 to 20 shipments daily," says Nix.
"Once this architectural design and feature was set, Sapa was able to quickly get its shipments rolling," he adds.
No More Going Rogue
Cloud Logistics' Request for Quotation function provided a quick return on investment for Sapa "by limiting maverick freight purchases across existing carrier contracts," notes Mitchell. "It allows us to react quickly and get competitive rates without being taken advantage of in a last-minute expedite situation."
As a result of its partnership with Cloud Logistics, not only is Sapa seeing more efficient operations, but it is also saving on operational costs: The company doesn't need to maintain the software, purchase the TMS program plus third-party software, and pay maintenance fees for multiple systems. Nor does it need a database manager or IT staff to monitor and maintain the system.
Nix credits Cloud Logistics' modern interface and rapid implementation for the successful rollout, which spanned three months and included less than half a day of training for end users. "We are able to train users in a few hours because we hid the complexities of older technologies behind the configurable workflow architecture, and our navigation bar simplifies the overall experience," explains Nix.
The easy adoption on Sapa's end was crucial, too, not just in setting a new tone for logistics, but in making each facility comfortable with the new system. "The go-live was a smooth one-day non-event," recalls Mitchell.
Not only did Sapa achieve immediate return on investment, but it expects to see that return increase as it continues to use Cloud Logistics' solution, which allows multi-stop truckload selection, tendering, rating, match-pay, analytics, alerting, and end-to-end visibility.
At press time, the TMS was still relatively new, but Sapa has seen a 6.5-percent savings "just in carrier selection," says Mitchell. "And we have already seen ROI from giving our sites and carriers better visibility." He expects to derive more benefits from the system—and take account of total savings—as the Cloud TMS rolls on.