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Nestlé reports immediate benefits using eCargo

Using supply chain tool eCargo, Nestlé New Zealand resolves the age old distributors' problem of not having confidence in or control over increasing freight costs.

Nestlé is the largest food and beverage company in the world, producing thousands of well known household brands. Typical of the way they operate globally, Nestlé New Zealand's distribution focuses on being efficient, effective and creating value.

The Challenge

As one of New Zealand's leading FMCG companies, Nestlé New Zealand has an extensive and diverse product range, supplying a large number of customers with numerous delivery points. Like so many large distributors, reconciling freight invoices was a messy and time consuming ordeal. Verifying accuracy of the costs charged by their transport partners was an extremely manual and inefficient process that tied up valuable staff for prolonged periods every week.

Distributing several thousand orders each month, it simply wasn't possible for Nestlé to fully analyse all freight invoices that they received. Instead, they were limited to carrying out random audit checks and hoping for the best. The obvious result was that Nestlé had little confidence in the accuracy of, and indeed control over, their outgoing freight costs.

The Solution

Nestlé required an independent and reliable source of detailed consignment data that could be used to double-check and confirm transport charges. This information  needed to be quickly and easily accessible, integrate well with existing supply chain systems, and above all - be accurate.

Nestlé found the answer to their problems using the eCargo supply chain tool. Now when a customer sales order is received, order details flow automatically from Nestlé's SAP ERP system into warehouse provider Linfox's system, and then into eCargo. Subsequently, the order details are also received into the carrier's transport management system for vehicle booking and dispatch. All systems are kept updated in real-time as product is picked and dispatched from Nestlé's Auckland and Christchurch warehouses.

Each week the transport supplier presents their invoice in electronic format. Nestlé extracts consignment details from eCargo and uploads this data, plus the carrier invoice, into the freight reconciliation tool. From here details such as items, weights, volumes, routes and costs are reconciled against freight charges. Any exceptions can then be easily identified and checked.

Benefits and Outcomes

Nestlé started with a situation where 2 to 3 days full-time effort was being spent each and every week manually checking just a sample of freight invoices. Now a fully comprehensive audit is taking place in only one-twelfth of that time.

"The rewards resulting from using eCargo have been enormous for us and we saw immediate benefits following its implementation".

Rick Child
Nestlé New Zealand
Financial Controller
Supply Chain

Child confirms, "The time savings have been huge. Our control process is much tighter, our auditors are happy and the relationship with our transport provider has improved. We have entire confidence in the resulting output".

Implementing eCargo has meant distribution centre staff have now been freed up to do other important jobs. The task of freight invoice reconciliation has been moved to Nestlé New Zealand's head office, where it fits in as a small part of the usual accounts payable process.

Rick Child closes by telling us, "All the eCargo guys are great, they're always happy to chat through ideas or issues and provide us with a great service".

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