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New App Forecasts Shipments to Cut Transportation Costs

by Chris Chiappinelli

Managing Automation

June 15, 2010

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Terra Technology, purveyor of the Demand Sensing software, looks to branch out in supply chain management and planning with a Transportation Forecasting offering.

Supply chain management (SCM) software provider Terra Technology last week added the Transportation Forecasting product to its portfolio, saying it fills some of the blind spots for manufacturers looking to optimize the distribution of their finished goods.

The offering aims to bring more discipline to the process of transportation planning by enlisting predictive analysis to parse such information as the manufacturer’s demand plan, shipping history, current orders, and, if possible, retailer data, including warehouse inventories/withdrawals and point-of-sale information.

Rob Byrne, CEO of Terra, likens the typical transportation planning process of consumer goods manufacturers to the movie Groundhog Day. “Every day, you’ve spent a day getting carriers for one more day worth of orders … And you come in the next day and you do it all over again. There’s no systematic visibility even into next week,” he told Managing Automation.

The Transportation Forecasting software pays particular attention to product promotions, making it ideal for consumer goods companies, according to Terra. With the visibility the system provides, transportation managers can proactively adjust warehouse staffing, for instance, and better manage dock scheduling when plans call for a surge in shipments to facilitate new product introductions or other promotional efforts.

That kind of automation is key to alerting transportation managers to upcoming distribution events and thus cutting down on occasions when they must make emergency arrangements to ship product, Byrne said. With today’s manual processes, “if it’s not [a] Wal-Mart [shipment], where you probably get decent notice — if it’s something where you need 15 trucks instead of 50, you might not get any notice” from your internal colleagues, he said.

The software is installed on premises and operates as an adjunct to existing warehouse management and transportation management systems. It produces a weeks-long forecast by transport lane and mode, broken into daily increments. A typical customer would be a large, multinational CPG, Byrne said.

Development of the Transportation Forecasting product began as a bespoke system for Campbell’s Soup nearly seven years ago, Byrne said. At the time, the soup manufacturer wanted to better manage warehouse staffing and get a preview of transportation requirements that was more precise than those based on historical averages.

Three customers have signed on to use the product, including Kraft Foods, although none is yet live with the software.