Planning and Finance

Our Client, a medium sized regional distribution company required a logistics IT solution provider with the requisite industry knowledge and technical skill sets to assist them in their ambitious growth plans. It was their intention to form and develop mutually beneficial relationships with other small transport companies and owner- drivers and establish a credible group that was able to win, retain and make profit from lager contracts. They clearly recognised that IT would play a vital role in enabling success.

We started by reviewing their existing systems and making the necessary recommendations. The client was aware and accepted that their existing systems were just about adequate for his current operation and would not support the growth plans. We agreed upon a phased implementation of modules from the Orion Star Range of web based solutions. The requirement included the Consignment booking and pricing module, Planning and Collaboration tools, Track and Trace solutions and the Finance module.

The first phase centred on addressing the very important issues relating to a semi manual process for receiving volume orders from their largest customer and the  under-pricing on this particular account. Under their contract with this customer, the price per booked consignment was advised by the consignor as part of the booking process and this price was used to generate the billing invoice. Pricing discrepancies had become a costly and time-consuming issue that had the potential of significant commercial impact.

We fully automated the order receipt process and added status updates. We also implemented a price verification process at the point of order receipt. Therefore, all pricing exceptions are identified at the earliest possible point and escalated for resolution prior to acceptance. Identifying the discrepancies prior to incurring the cost of transport dramatically reduced our client’s financial exposure. Additionally we implemented reporting processes that calculated the delivery costs per consignment highlighting any that would result in retention margins below agreed levels.

The Second phase centred on providing the sophisticated finance functionalities that enabled our client to identify where and how margins can be improved and ensure expansion is on a sound base. The Orion Star finance module has the tools and reporting functionalities for in-depth analysis and controls. This enabled our client

to develop a 3rd party payment matrix that ensured they would not handle consignments at a loss. The matrix was complex due to the range of services and the payment structure but the result was that each consignment that was delivered within the Service Level agreement (SLA) made a positive net contribution.  Payments to 3rd party contactors were made subject to strict SLA fulfilment therefore providing the commercial protection for our client.

Overview

Challenge

Their current systems were not adequate and unnecessary costs were being incurred. We had to provide the solutions that would enable and support substantial profitable growth.

Solution

Orion StarACT the finance module, revenue and costs reports and subsets of others modules to improve data flow and visibility.

Business Value

Our client had immediate visibility of any transaction that would yield less than the agreed net margin prior to incurring costs.

Skills

Logistics