Roseburg Builds Competitive Advantage with Oracle and ... - PC*Miler

Company Profile
Roseburg Forest Products, one of North America’s largest privately held companies,
manufactures a diverse line of lumber, plywood and engineered wood products.
Roseburg operates twelve plants in the Pacific Northwest, Montana and the
Southeast and harvests nearly 700,000 acres of timberland in Oregon and Northern
California.
Products and Services Used
� PC*MILER
� PC*MILER|Rail
� PC*MILER|Rail Connect TCP/IP
� Oracle Transportation Management (OTM)
Business Situation
When salespeople at Roseburg Forest Products provide quotes for wood products,
delivery is included. For years, Roseburg’s profit margin on wood product shipments
on truck, rail or intermodal was precariously linked to estimates for what it would
cost to deliver when a customer placed an order.
Roseburg’s transportation costs were always in a state of flux because of the lag
between the time a customer places an order and when the order actually ships —
typically a week or more.
“We wanted to have the flexibility to predetermine our
actual charges to see if what we were paying carriers
was in line with our costs,” says Jeff Brandt, Director
of Transportation and Logistics for Roseburg Forest
Products.
Roseburg manages thousands of rate agreements and carriers in its multi-modal
transportation network. In the first quarter of 2011, Roseburg shipped approximately
65 percent of its orders by truck and 35 percent by rail.
Forecasting transportation costs in a multi-modal network is not the only challenge.
By tradition, the customers or buyers of wood products have been satisfied with
shipping within a given week. Customers are now starting to ask for more specifics,
like a day and time window for delivery.
Roseburg Builds Competitive Advantage
with Oracle and ALK - Case Study
By late 2009, management decided to explore technology solutions to gain control
of transportation costs and activities and to support better customer service with
more precise deliveries.
“We care about how we can get it to the customer when he wants it,” Brandt said.
“But we didn’t have the tools to monitor it or provide that service in an otherwise
commodity-driven business.”
Technical Situation
In late 2009, Roseburg Forest Products asked Hitachi Consulting to assess the
company’s needs and to offer recommendations for improving the financial and
operating performance of the transportation function.
At the time, Roseburg already was using an Oracle product, an enterprise resource
planning (ERP) system called J.D. Edwards EnterpriseOne. This platform did not
have all the transportation management functions needed to make pricing decisions
and to audit freight bills from motor carriers and railroads. For years, Roseburg
used spreadsheets and other manual methods to support its rate structure
and manage transportation costs and activities.
After reviewing the business and evaluating technology solutions, Hitachi Consulting
assisted Roseburg in the implemention of Oracle Transportation Management
(OTM). This robust and integrated platform has transportation planning and execution
capabilities for all modes of transportation.
PC*MILER|Rail Split Screen View Showing Route Windows, Map and Reports

OTM uses its rating “engine” to determine the least-cost mode of transportation
that meets customer service requirements. This engine requires accurate distances
and route data. Unless the rates in the system matched with the actual routes and
the attributes of rates from truck and rail transportation providers, the solution is
less than optimal.
OTM uses route codes, for instance, to identify the locations, or junctions, where rail
carriers have interchange agreements to extend their service areas. This feature is
only useful if the route codes in OTM match exacty with the actual junctions and
locations serviced by each railroad.
OTM already had an existing or seeded integration with J.D. Edwards EnterpriseOne
to capture order information. To realize the full capabilities of OTM, the project
team at Roseburg wanted real-time integration with industry-standard PC*MILER
distances and routes for both rail and truck.
Integrating PC*MILER and PC*MILER|Rail with the non-Windows OTM platform
would require a compatible protocol such as TCP/IP.
Solution
When OTM receives order information electronically from J.D. Edwards
EnterpriseOne, its rating engine provides instant visibility to salespeople for the
delivery costs of each order. OTM simultaneously calculates and records the
difference, or margin, between what Roseburg pays carriers and the revenue for
transportation associated with each order.
A real-time interface between OTM and PC*MILER was established using
PC*MILER|TCP/IP, a universal connectivity product. PC*MILER and PC*MILER|Rail
provide OTM with the capability to generate distances and validate rates. The integration
with PC*MILER|Rail, for example, verifies that rail shipments can
be serviced by one or more rail providers through interchange agreements.
The platform also contrasts the cost of service, and service time, for all modes and
uses its optimization engine to make a routing decision based on transportation
mode and carrier. By implementing the OTM platform with PC*MILER connectivity,
Roseburg Forest Products is able to be exact when quoting delivered pricing to
customers.
With this new capability, Roseburg has been able to restructure its rates to reflect
actual delivery costs at the time customers place an order and effectively manage
its salesforce based on profit margins, and not just by sales volume.
Benefits
In a competitive market where buyers want delivered
pricing, Roseburg now has real-time visibility of the
spread between transportation costs and revenues.
At the point an order is taken, salespeople know
immediately if they have covered the transportation
costs, except for any changes to the fuel surcharge.
The company also can provide customers with more
definite delivery times.
“You have to have good business practices. OTM and
PC*MILER are bringing those business practices to our
company,” Brandt said.
In the future, Roseburg expects to be able to use its integrated platform to quickly
bring on new shipping locations and add rates quickly, Brandt says. Also, as customers
demand more frequent shipments in smaller quantities, Roseburg will be able
to handle these needs without adding more staff, and to continue to use its rate
structure to plan shipments better and lower delivery costs.
For More Information Contact PC*MILER Sales
Tel: 800.377.6453 ext 1 Email: sales@alk.com Web: www.pcmiler.com
Hitachi
Consulting
081710