Benefit

Electronic Freight Management (EFM) technologies enable significant improvements in supply chain visibility, productivity, and effectiveness through simultaneous data sharing.

Broad industry experience with the electronic freight management systems


March 2009


Summary Information

In 2007, as part of the U.S. DOT Electronic Freight Management (EFM) Program Initiative, a prototype EFM system was implemented through a collaborative body called the Intermodal Freight Technology Working Group (IFTWG). Evaluation of the prototype EFM was conducted by an independent evaluator to examine impacts of improved supply chain visibility and data sharing on the productivity and effectiveness of selected international air-freight supply chain partners. Findings from the initial evaluation, entitled Columbus Electronic Freight Management Evaluation Report, were published by the U.S. DOT in 2008 and also reported in the U.S DOT ITS Knowledge Resources database. During initial testing, which included a six-month test period, more than 850 freight consignments were tracked using EFM technologies between Columbus and Hong Kong. Overall, early findings indicated the EFM system, which included a Service Oriented Architecture and 21 Web services, simplified communications and information sharing between partners and improved freight tracking across the board.

Subsequently, as a supplement to the Columbus EFM prototype testing, additional analysis was conducted to further examine industry-wide benefits and lessons learned from additional case studies. Highlights from the follow-up report are documented below.

FINDINGS

Broad Industry Benefits

A September 2008 case study entitled Beyond Visibility: Driving Supply Chain Responsiveness included an expanded survey response from a total of 349 companies. One-hundred and one (101) respondents partially or fully estimated the economic impact of the supply chain visibility technology.
  • 46 percent of smaller firms report benefits of greater than $100,000
  • More than twice as many smaller firms report meaningful benefits (>$100,000) than report no payoff or loss
  • Almost as many smaller firms report significant benefits (>$500,000) as report no payoff or a loss
  • Twice as many large firms report significant benefits (>$500,000) as report no payoff or a loss from a visibility software project
  • Half of the firms that reported measuring benefits were large firms with revenues greater than $2.5 Billion, although only 42 percent of the 349 companies in the overall survey were large firms
  • For the 23 percent with more than $3 million in benefits (23 companies), 56 percent (13 companies) are large companies with revenues greater than $5 billion
Other Case Study Findings

The following benefits highlighted in the report were derived from the primary source documents identified below.

Reduced Transportation Costs
  • 30 percent reduction in transportation costs through use of transportation planning software product (Infor - 2008)
  • Reduced expediting of shipments by 75 percent (Distribution Group - 2005)
  • Reduced cost per parcel by 14 percent (Zuckerman - 2008)
  • 20 to 30 percent improvement (Viking Logistics - undated)
Reduced Administrative Costs
  • Reduced processing effort by 8 to 15 percent (Accenture - 2002)
  • Reduced transportation overhead by 10 to 30 percent (Supply Chain Digest - 2008)
  • Reduced costs of manual data capture and entry by 10 to 15 percent (Goodman - 2006)
  • 20 percent faster response to rate evaluations (Manufacturing and Logistics IT Magazine -2008)
  • Reduced shipping administration process time by more than 50 percent (Murphy – 2004)
Improvements in Inventory and Shipping
  • Increased shipment consolidation by 5 to 25 percent (Skinner – 2007)
  • Reduced safety stock inventory by 20 percent (Goodman - 2006)
  • Reduced inventory levels by 25 to 60 percent (Viking Logistics - Undated)
  • Improved transportation controls and reporting by 2 to 5 percent (Skinner - 2007)

Service Quality

  • Reduction in time to resolve in-transit problems by 50 percent (Goodman - 2006)
  • Improvements in delivery performance by 16 to18 percent (Viking Logistics - undated)
  • Improved reliability of delivery time to 90 percent (Goodman - 2006)
  • Improved on time delivery performance from 94 to 97 percent (P&G - undated)
  • Improved cycle time by 10 to 50 percent (Distribution Group - 2005)
Shipment Integrity

Benefit Comments

No comments posted to date

Comment on this Benefit

To comment on this summary, fill in the information below and click on submit. An asterisk (*) indicates a required field. Your name and email address, if provided, will not be posted, but are to contact you, if needed to clarify your comments.



Source

Columbus Electronic Freight Management Evaluation: Achieving Business Benefits with EFM Technologies

Author: Troup, K.; D. Newton; M. Wolfe; and R. Schaefer


Published By: U.S. DOT Research and Innovative Technology Administration

Prepared by SAIC for RITA

Source Date: March 2009

EDL Number: 14495

Other Reference Number: Report. No. FHWA–HOP–09–053

URL: http://www.ops.fhwa.dot.gov/publications/fhwahop09053/fhwahop09053.pdf

Rating

Average User Rating

0 ( ratings)

Rate this Benefit

(click stars to rate)


Benefit ID: 2011-00677