Rail Challenges and Benefits with OTM

Transcription

1 Rail Challenges and Benefits with OTM P pp August 15, 2012 Pp Debbie Baker, OmniSource George Moser, Hitachi Consulting

2 Introduction to OmniSource Founded in 1943 HQ in Fort Wayne, IN Shipped over 6 million tons in 2010 Acquired by Steel Dynamics (SDI) in 2007 OmniSource buys and sells scrap metal, both ferrous and non-ferrous OmniSource places scrap containers in factories, buying the scrap from the factory; or buying the metal scrap from demolition sites The scrap is weighed, processed, shredded and sorted at OmniSource facilities OmniSource sells the ferrous scrap to its parent, Steel Dynamics, and other steel mills, where it is melted and converted into new steel The non-ferrous scrap, such as copper, is shredded and containerized and increasingly sent to China

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4 Transportation at OmniSource Private Railcars 387 Outside Carriers Barge operations Export: 5000 TEUs/year Shipments/month Independent Operator 376 Drivers 439 Power Units 2143 Trailers containers

5 OTM Project Goals Unified transportation platform, intended to replace several legacy systems often divided by mode Proactive planning vs. post-activity recording Carrier cost savings, better rate management, automation and visibility/reporting company-wide Rail-wise, ability to: Consolidate all rail rates and charges in one location Enable EDI communication with Class 1 Railroads Set the foundation for tracking demurrage in OTM in the future

6 Timeline Phase 1: 2012 YTD JDE / OTM Go-Live in Toledo for TL and Rail Rail Go-Live in the rest of OH Phase 2: Q Transition to SAI Midwest Go-Lives: TL and Rail in OH, MI, IN CarrierWeb Go-Live Phase 3: 2013 Southeast Go-Lives: NC, VA, TN, GA, SC Barge and Domestic Multi-Leg Moves Nonferrous Division / Export Go-Live

7 7 Cars Handled By Omni Rail Annually YTD 92,423 91,837 97, ,000 98, ,400 55,000

8 Omni Rail Private Fleet YTD Lease Costs $6,773,694 $7,675,101 $6,213,484 $4,362,674 Maintenance Costs $521,934 $760,050 $833,390 $548,178 Turn-In Costs $948,745 $139,679 $576,417 $143,496 # of PF Railcars in Fleet PF Loads Annually Total Moves Annually 1,326 1,654 1,842 1,830 15,354 20,266 22,933 11, ,000 98, ,400 55,000 # of Rail Employees

9 9 Rail Operations Prior to OTM PRIOR OTM Omnisource s TMS was Excel! Rate Maintenance & Inquiry Maintained a large Excel-based rate database. Records could be easily added, but not easily changed. Rates did not include additional charges such as FSC & lease costs Accessorials had to be added individually to each rate. Ex. If a switch charge changed, all rates using that switch had to be corrected one at a time. Marketing & Sales could not easily inquire to get an all-in rate. Lookups require manual addition of FSC & lease cost. Therefore, Rail Logistics spent unnecessary time manually preparing rate quotes.

10 PRIOR to OTM Rail Operations Prior to OTM BOL Processing Creating Bills of Lading required users to visit each railroad s website & learn the nuances of each web form. Training and documentation took considerable time due to the number of railroads that we utilize Users were required to trace all cars being billed to ensure the cars numbers (supplied by the scrap yards) were correct. Shipping information was rekeyed several times by different users at the yard and corporate levels 1

11 Shipment Costs Rail Operations Prior to OTM No visibility into total cost per shipment. Standard voucher was frequently utilized to pay extra charges such at no-bills, trans-loading, and overloads. Since extra charges were often hidden in notes areas, there was no way to track these costs----without maintaining another spreadsheet. Freight Settlement Invoice validation required manual lookup of the freight rate and the car movement. This information came from multiple sources. Oftentimes, both the corporate freight auditor and the yard accounts payable clerk would perform these same tasks aka big duplication of efforts. Railcar Tracking All tracking performed manually and maintained in spreadsheets. One FTE dedicated to railcar tracking alone. Duplications of efforts again, as yard specialists are also tracing the cars associated with their locations. 1

12 Integration Overview Compliance DB based on Oracle APEX 2 ERPs: JDE and SAI EDI Partner: RMI CarrierWeb links to In- Truck Units

13 Scrap Yards

14 Order to Shipment Process Order to Shipment Process Yard OTM Marketing Contract for XX Tons Scrap Sales Order in ERP Order Base Load Rail car based on available tons Create Order Release in OTM from Order Base Send Switch List to Rail Group Plan Orders into Shipments

15 RAIL PROCESS FLOW OVERVIEW CORP OMNIRAIL OTM Material is ready to ship; Hardcopy Switchlist ed to OmniRail Material Order releases created BOL 404 created & sent to RR Receive BOL 404 ack from RR Planned Shipment information sent to ERP Actual weights received from ERP 410 Invoice received from RR; Autoapproved & voucher sent to ERP ERP YARD OPS 1

16 BENEFITS OF OTM! Benefits from OTM Rate Maintenance & Inquiry Complete cost visibility: One source for rates including all costs: FSC, switch charges, etc RIQ will show best rate per itinerary for both private and public car rates Ability to differentiate Buy Side from Sell Side Rates (Lease and Maintenance Costs) Commodity & equipment-based rate inquiry supported 1

17 Benefits from OTM Buy Side Rate Bu 1

18 Sell Side Rate Benefits from OTM 1

19 BOL Process Benefits from OTM EASIER: The Bill of Lading process is simplified. There is now only one place to enter BOLs. The learning curve for new employees has been greatly reduced. FASTER: Rail users no longer need to trace cars before billing, due to the automatic location verification and error handling between OTM and EDI provider. MORE EFFICIENT: Due to integration with the ERP system, we have reduced the need for the yard to release material from the material contract. Rail does it for them. Once material is released, shipment built & tendered: OTM sends the 404 transmission to the rail carriers via EDI Provider Validation of the 404 from the railroad via the EDI Provider is received with an acceptance or rejection. OTM generates an notification for the user. 1

20 BOL Process 2

21 Benefits from OTM CLM s (EDI 322) Released Loaded Sets status to ENROUTE_ENROUTE Constructive Placement Sets status to ENROUTE_COMPLETE Actual Placement Sets status to ENROUTE_COMPLETE if not already set Bad Order Status Match to shipment or equipment Match SPLC code to Rail Station Code Update Rail Group with actual description. 2

22 BAD ORDER Status Benefits from OTM. 2

23 Benefits from OTM BAD ORDER Status Match Rail Station. 2

24 Unit Train Capabilities 2

25 Unit Train Capabilities Benefits from OTM Weekly coal move (in the summer) from Hull, WV to Nuggett, MN Unit train from Hull, WV to Sandusky, OH Port movement and storage in Sandusky, OH Barge to Duluth, MN Stevedoring in Duluth, MN Unit train to Nuggett, MN Two dimensional unit break Per number of cars Per ton per car Without OTM this is a manual process in a notebook (yes, a notebook) 2

26 Benefits from OTM Settlement All shipment costs are maintained in OTM for invoice matching including additional charges outside the original freight invoice. EDI 410 will streamline the invoice payment process by auto-approving those invoices within tolerance. The freight auditor will only have to handle the exceptions. OTM will provide more accurate and detailed reporting tools for financial analysis 2

27 OTM Rail Challenges RIQ by Rate and Route only shows cheapest rate per itinerary At time of contract sales may not know the origin/destination location Ability to create multiple releases out of the box from the order base Current process is one release per car Railroad inconsistencies with city names NS and CSXT may call the same location a different name Columbus, MS = Arbela, MS Cumbersome switch absorption set-up and maintenance Absorption cannot exceed total accessorials Switch = $500, Absorption = $600 2

28 Thank you! George Moser Senior Manager Supply Chain Debbie Baker Business Analyst th Ave, 11 th Floor, New York, NY Phone: gmoser@hitachiconsulting.com W. Jefferson Blvd, Fort Wayne, IN Phone: dbaker2@omnisource.com