1. A single asset helps unify disparate global operations
Kraton is a global corporation with a diverse portfolio. The company manages the movement of products across a complex network spanning multiple regions and transportation modes – road, rail, ocean, container – across many strands of its business. This complexity requires a sophisticated logistics approach. Katron works directly with logistics service providers (LSPs) including 3PLs, 4PLs, as well as with carriers.
Kraton embarked on the digital transformation of its transportation systems with Transporeon back in 2017/18 to streamline transportation management. Several areas for improvement were identified, particularly the use of disparate systems across different regions. The many systems in use hindered communication, connectivity, and created manual processes that were cumbersome and inconsistent, both internally and with the company’s Logistics Service Providers (LSPs).
Kraton saw the opportunity to leverage a central transportation management system to foster seamless connectivity across all regions. This standardization improves communication and collaboration but also enhances efficiency through centralized data and streamlined processes.
Logistics tendering, previously managed at individual locations, was identified as a critical function most impacted by these operational disparities. Recognising the need for streamlined processes, Kraton strategically transitioned to a centralized model. This new model allows all global teams to collaborate on freight tendering and rate management, benefiting from a unified source of data for improved decision-making.
To ensure a smooth transition and minimize disruption, the migration to the centralized system was executed in phases. Phase 1 focused on Europe, followed by the United States in Phase 2. This phased approach underscores the strategic priority to integrate learnings and maintain operational continuity.
2. Versatility to meet multiple capabilities
Kraton conducted comprehensive vendor evaluations and ultimately chose Transporeon over other competitors due to its established global platform, which aligned with Kraton's need for a unified system to support its worldwide operations. Transporeon’s ability to also accomplish several further functions vital to transportation logistics optimisation was another factor. Along with the core requirements of freight tendering and rates management on a single platform, there are capabilities to manage accruals, surcharge management (incorporating third-party carriers) and add-on billing.
3. Plan and blueprint, then plan and blueprint again
Kraton's diverse operations across multiple regions presented a unique challenge: optimizing transportation management across different development levels. This diversity, however, offered valuable insights for developing a centralized system.
Two logical questions emerged:
- How can we seamlessly integrate a central tool across regions with varying technological capabilities to ensure efficient use for all teams?
- How can we ensure regional teams have realistic expectations for the tool's capabilities while maximizing its potential benefits?
To address these questions, Kraton established a dedicated project planning team. This team collaborated closely with Transporeon to develop a comprehensive implementation blueprint. A crucial element of the plan was achieving the optimal balance between customisation for specific regional needs, and leveraging the core functionalities of the system. Danny highlights the value of advanced planning: “The detailed preparation truly yields dividends. Such methodical planning helped in Phase 2 of the rollout in the US. Having a proactive, centralized logistics team in place beforehand significantly contributed to the project's success.”
4. Faster, more efficient accruals and surcharge management
Danny reported that accruals glitches and updates are now handled automatically because the Transporeon platform links with existing in-house Enterprise Resource Planning (ERP) systems. Every accrual logged within Transport Assignment (TA), makes its way to Kraton’s ERP system and, in Danny’s words, “that is where significant efficiencies are realized in the process of invoice processing.” The key to success lies in ensuring that carriers and third-party suppliers input rates and surcharge requests into the TA system, allowing for approvals to be granted and subsequently integrated back into the ERP system for verification prior to the issuance of invoices.
Surcharge management has similar benefits – carriers are given a buffer period in which they should flag issues or alert customers about relevant events that might incur surcharges, so that the information makes its way to the ERP in good time for approval matching to take place before final invoicing.
5. No-drama exception management
In alignment with best practices Kraton emphasizes proactive planning in its supply chain operations, though exceptions are inevitable. Kraton’s supply chain team manages such events in Transporeon, for example to change a pick-up date or to alter a delivery date. Meanwhile Time Slot Management enables smoother and more accurate operations at dock and yard and more cost-effective use of expensive driver and truck hours. “All information is housed in Transporeon and fed back through our ERP,” Danny explained. “The customer service team has full visibility of the plan and of any alerts.”
Day-to-day execution is easy, he said. Outbound shipments are planned in the company’s ERP; that information is sent over to Transporeon for the initial tendering and acceptance process with Kraton’s preferred carriers and LSPs. Most are connected directly via the Transporeon interface themselves, though some use a web log-in to accept loads and manage exceptions and changes.
6. Make decisions based on data integrated across modules
The various modules selected by Transporeon customers from its suite of solutions are all now integrated as one rich data center. The benefit for customers is that data learning is updated in real time to facilitate business efficiency; this includes lane-by-lane analysis and competitive rate analysis. Both shippers and carriers can thus be sure that they are agreeing deals based on firm, impartial, up-to-date evidence.
7. The opportunities keep coming
Digital transformation is not a one-off, it’s an evolution. It’s about learning lessons, discovering what works best for your business and your needs and applying that knowledge to the next stage.
Kraton's pursuit of greater transparency has prompted an evaluation of Transporeon's Freight Audit capabilities, aiming to enhance financial operations and ensure that carriers submit Requests for Surcharges before final invoicing. This proactive approach streamlines processes and keeps Kraton ahead of the curve by anticipating future needs and adapting to evolving market demands. Other companies might seek out solutions to different requirements; just talk to Transporeon experts to establish the possibilities the platform provides in freight sourcing and tendering, freight execution, dock and yard management, data insights and supply chain visibility.
And it’s not scary. Danny Wong concludes: “The excitement of developing and implementing a digital roadmap stems from leveraging existing tools to enhance and optimize successful processes further.”
