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A couple of years ago, some executives at Emerson asked themselves a question: Why pay to send inventory from one supplier on one ship and goods from a second supplier on another ship, when both deliveries are coming from the same place and could be loaded into a single container?
It was an aha! moment that ended up saving millions for the St. Louis manufacturer that regularly ships supplies from Asia to North America and Europe. In late 2005, the company started a pilot program in which a logistics provider that specializes in transportation management for freight carriers worked with two Emerson divisions to consolidate multiple orders into the same shipping container. Not only did the pilot save money, the business units were able to tighten their global supply chains by better tracking shipments and managing inventory. Naturally, Emerson wanted to expand the program. But here's where things got complicated: Emerson has 70 separate business units that purchase goods from 35,000 suppliers. Each unit communicates with its own suppliers via a combination of e-mail, spreadsheets, faxes, and phone calls. Asking a logistics provider to step into the middle of this tangled transaction web simply wasn't feasible.
Illustration by Curtis Parker
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