Podcast Feature: Inbound Logistics

Podcast Transcription:

Vice President of Supply Chain Solutions, Frank Dreischarf Joins the Inbound Logistics Podcast:

Inbound Logistics: You’re listening to the inbound logistics podcast with today’s guest, Frank Dreischarf, Vice President of Supply Chain Solutions, R2 Logistics. 

Every supply chain needs a good TMS to move their product around but defining a “good TMS” means something different to different companies. For some it’s ease of use or comprehensive data for others it means efficient classification vs. effective training & support. Frank Dreischarf, Vice President of Supply Chain Solutions for R2 Logistics joins us to explain how ineffective TMS execution might be negatively impacting your supply chain spend.

Today on the Inbound Logistics podcast, we are joined by Frank Dreischarf, Vice President of Supply Chain Solutions for R2 Logistics. Frank, thank you so much for joining the show. 

Frank: Thank you very much for having me. I appreciate it. 

IL: And it’s great to have you. How are you doing by the way with everything that’s going on in what is quickly becoming our new normal?

Frank: Yeah, I’m doing about as well as can be expected. We’re adjusting and settling in. My wife is extremely happy that the kids will be going to school this year and she won’t have to be homeschooling and I won’t have to worry that our teacher might, uh, might have a glass of wine or two in the afternoon.

IL: So very true. Very true. Well, good. I’m glad everybody’s healthy. Frank, we want to introduce you to our audience. So if you could take us through a little bit about you, a little bit about your background, and what you’re currently doing with our R2 Logistics today. 

Frank: Sure. So again, thank you very much for having me. My name is Frank. I’m the Vice President of Supply Chain Solutions here at R2 Logistics. R2 Logistics is a third-party logistics company where we’re one of the larger ones operating within the United States. I manage our multimodal efforts, our supply chain consulting, as well as our LTL division. Prior to R2,  I spent 20 years plus as a shipper, working for a variety of multinational companies, managing their logistics in warehousing and multiple geographies across the globe. I’ve managed spins from as small as $7 million annually to as large as 300 to 400 million and spent that time managing every form of transportation essentially known to man from ocean, air parcel, bulk tank truck, to barge truckload, and LTL.

Frank: I got my start in logistics working for an LTL carrier right out of college. And from there went on to manage warehouses and distribution locations, DCs, and transportation. And now I get to work sort of on the other side of the table, if you will, for a 3PL.

IL: You mentioned  managing all kinds of transportation with everything that’s gone on, uh, with the, uh, increased consumer demand signal, why are transportation management systems such an important tool in today’s LTL market space?

Frank: Well, we’re seeing a significant amount of volatility in the US market right now. Really globally, right? We’re seeing increased costs across every mode of transportation. We’re seeing, severe disruptions inside of the supply chain and a good TMS system is absolutely vital to allow a shipper to effectively manage their LTL and transportation spend. A good TMS system essentially shines a bright light on portions of the supply chain that are typically hidden. For example, not too long ago, I was speaking with a CFO of a roughly $200 million or so revenue company, and we were chatting about his inbound transportation costs as well as his cost to service his customers. And I asked what I thought was a fairly basic question, which was just, you know, what is your cost to serve the customers you’ve shipped to? And how much does inbound transportation influence your cost?

Frank: You know, he replied,”I honestly have no idea.” Which sort of prompted me to ask then, well, doesn’t that bother you a little bit? And he said, well, now that you bring it up, it sure does. You know, in reality, a good TMS system makes all of that data readily available.

Right? Additionally, a good TMS system allows a shipper to identify what I like to call their failure costs. Now failure cost is either a failure to plan or a failure to execute properly. You know, for instance, right. A failure to plan shows up in your transportation spend as an expedite cost.  Your logistics group or your transportation group inside of any company is unique in the supply chain in that they’re the only ones that can really turn four days into two days. 

And they do that by expediting freight or, you know, God forbid, air freighting. Now your TMS system should provide you with that data, right. It should help you see when that is occurring. Similarly, a good example of a failure to execute properly might show up as an unplanned accessorial such as, you know, like corrected bills of lading or freight reclassification. Our TMS system helps you identify those costs and orders so that you can fix the root cause issue. A lot of times, you know, a shipper will think, or a company will think, man, our freight costs are too high. We must do a terrible job of negotiating.

Well, no, you know, you might do a great job of negotiating your freight rates. You just have terrible execution all throughout your supply chain and you’re bearing those costs on the freight line of the PNM.

IL: You mentioned a good TMS. What features hould companies be looking for when they want to work with a good TMS?

Frank: It really, really boils down to ease of us,e how intuitive the system is. Are your people able to understand what they’re supposed to do and are they able to execute at a high level? Right. And then after that, it’s about data aggregation and reporting. You know, most systems have the same basic functionality, but some systems are much easier to use than others.

Some systems have great reporting. Some have lousy reporting. Others require you to, you know, dig for days or heaven forbid, you know, hype hire a bunch of outside consultants that, that you need to pay needlessly in order to get the data that you require in order to effectively manage your business.

So how easy it is to get your data and how easy it is to interpret that information really helps you accelerate the decision-making process. 

IL: You mentioned a few things there. So can you summarize the benefits then that a company can gain from using a TMS for their LTL? 

Frank: Yeah. You know, one key benefit really is program adoption and adherence.

It’s one thing to have a solid plan for your LTL spend. I think Mike Tyson wants that everybody has a plan until they get punched in the face. Your logistics team might have a very, very solid plan for your LTL spin. You know, we’re going to use these carriers and these lanes, you know, that sort of thing.

It’s a whole other thing to execute that plan and to have an entire organization executing that plan flawlessly. The other piece along with that is scalability. You know, for instance, we have a customer who has multiple shipping locations. I think they have 30 plus locations across the US and Canada. They have made a number of key acquisitions in the past couple of years, adding additional sites and complexity onto their, you know, under their already existing footprint.

Our system allowed them to integrate their logistics programs in days, not months. Additionally, we have the tools and the reporting to hold those sites accountable. Thus ensuring that they’re receiving the maximum amount of value for their logistic strategies. 

IL: I want to go back to that ease of use that you were talking about with the TMS. For R2’s TMS, how intuitive is it for the user?

Frank: Our system was built from a shipper’s perspective. It, as I mentioned earlier, I worked for 20 plus years as a shipper. So our system was designed specifically to help small to midsize companies have the benefits of a professionally managed transportation organization without the headcount investment.

We find a lot of times that companies in that small to midsize range have really no idea how much money they’re spending on transportation, who’s making transportation decisions. It might be Tom on the dock and Tom’s a great guy, you know, and Tom loads the trucks. Well, let’s just let Tom talk to those trucking companies.

Tom might be overspending a lot, right? Similarly, Tom might not know what an NMFC number is or know what an FAK is or freight classification. Or how to correctly classify your freight or fill out a bill of lading. Our system is designed to basically give those companies the tool, to really keep Tom from wasting a lot of money.

Additionally, our reporting is designed to give companies the tools and the relevant data really at the push of a button and you know, to make effective decisions and to find the root causes for, you know, sort of the mistakes that are being made inside of their suppliers. Additionally, our system is backed by a team of logistics experts and operations people, as well as analysts that support our customers daily,

IL: OK, so giving Tom all those tools sounds great in theory. But what if Tom is resistant to new technology? What kind of support is there then for Tom to get some training or just ongoing support so that he can do the things that need to do with these new tools?

Frank: Well, it’s exactly that, right. Um, we have a team of analysts, logistics professionals that support our customers every day. We provide training and ongoing support. Our operations team also oversees each customer to ensure that they aren’t making critical errors. For example, right? A good example of this is if a customer tries to ship an order that is going to incur an excessive length charge, or would be cheaper going as, say a volume LTL move, our team is there to provide immediate feedback to those customers.

We essentially hit the pause button, give the customer a call. Let them know, you know what we’re seeing on our end, you know, the information that they’re flowing through the system, and we’re there to provide lower cost options to our customers. That way they don’t turn what they thought might’ve been up a $300 shipment and a $3,000 shipment.

What we’re not going to do is just sign a customer and then say, you know, Hey, good luck, God bless. And then send them on their way. In our view, that’s adding zero. We seek to add long-term value to our customers in a key way to do that is to help them get as much return on their transportation investment dollars as possible.

IL: So for customers looking for some of that long-term value, where would you send them? 

Frank: They can come and visit our website at r2logistics.com/tms. We would love to talk with them about any of their transportation needs and really help them start to shine a bright light on a portion of their supply chain that has probably been too long neglected.

IL: Thanks for listening. And we’ll catch you next time here on the inbound logistics podcast.