In 2017, Koch Foods, one of America’s largest chicken producers, decided to implement its first TMS after decades of reliance on analog processes. As a $5 billion+ company, with around $200 million in annual outbound freight spend and multiple business units, a TMS was needed to consolidate and modernize transportation processes. A dedicated procurement initiative was pursued, during which numerous TMS offerings were vetted. In the end, 3G’s TMS was selected because it presented the best-class-in its capabilities, flexibility, and cost.
Koch Foods’ immediate TMS objective was taking a control tower approach to freight transportation. With enhanced visibility into carrier rates & performance, and the ability to isolate time-consuming bottlenecks, the transportation team was able to identify opportunities for more efficient use of resources and provide new sources of value for both Koch and its customers.
The data derived from the TMS made it easier for Koch to not only assess carrier performance, but also to manage a larger carrier network. The ability to benchmark paid rates against the broader freight market for all component divisions has led to better, and continually evolving, procurement controls. Simultaneously, a growing broker and carrier network has enabled significant flexibility to use the right mix of contract and spot market rates.
Rate analysis, review, and routing guide processes using 3G’s TMS have allowed Koch Foods to identify opportunities to reduce spend. Through a combination of dedicated lanes, rate analysis, procurement controls, and internal spot market performance KPIs the company realized a substantial savings in freight spend within the first year!
Koch Foods’ implementation of 3G’s TMS was completed prior to a global pandemic, immediately testing the system’s ability to help confront the resulting uncertainty. The TMS helped the company to minimize cost increases during a hot freight market as well as uncover unexpected factors that were increasing costs.
The TMS has brought the Koch Foods’ transportation operation forward by leaps and bounds.
With a solution in place, the company is in a better position to operate efficiently in any set of market conditions and is looking forward to the future. As the carrier network has grown and becomes more refined, Koch Foods will be in a better position to add new layers, both to its operations and the TMS itself.
As a leading producer of one of America’s favorite food products, Koch Foods has a big responsibility to putting delicious meals, high in economic and nutritional value, on millions of tables every day. Doing so requires equally reliable and cost-effective transportation and for that, Koch Foods has found a partner in 3G.
“When you’re one of the largest supplier of the nation’s most popular meat, there are a lot of moving parts. The key is having them move in harmony as much as possible – to mitigate macro-level uncertainty and realize otherwise hidden opportunities. That is what 3G’s TMS does for Koch Foods. We’ve been in this business a long time, and there aren’t too many ways to immediately cut spend from one of our largest cost centers, it takes a pretty unique partner to make that kind of opportunity happen.”