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How Nestlé Drives High Performance with SAP Transportation Management

Today a large audience was present to listen to Patrick Chartron who traveled from Switzerland to share how Nestlé –one of the largest and most successful consumer goods companies in the world- is deploying a global transportation management platform based on SAP Transportation Management solution (SAP TM).

After giving a corporate overview of the Nestlé company, Mr. Chartron explained why Nestlé started the process of selecting a new transportation solution.  He stated that “Transport in Nestlé was not homogeneous. Transport Planning is either outsourced or internal and Nestlé has a mixture of own fleet and third party”. He continued that “Transport in Nestlé is by category / market rather than centralized”. It was also interesting to hear that Nestles transport spent is above CHF 5 billion.

Mr. Chartron explained that Nestlé is moving away from numerous legacy systems to a common platform to capitalize on economies of scale, automate transport optimization to reduce transport cost and empty trailers, reduce the environmental impact, increase time available for value added tasks and reduce mail & phone carrier communication to a minimum.

The SAP TM solution was selected and a deployment initiated with the goal of establishing a common, globally-capable solid transportation solution  and support organization to enable the business to reduce transportation spend and IT costs. 

Mr. Chartron went into some detail to explain how Nestle leverage the SAP Transportation Management solution.  Nestle uses SAP TM to plan domestic and international shipments. They have a diversity of modes and multi-modal shipments. They also support different means of transports including planning for frozen, chilled and ambient transports on one platform.

In addition, TM is used as platform for carrier collaboration at Nestle. TM is integrated with external rate engines like SMC3 and UPS.  Nestle does automated tendering with manual or electronic carrier response and based on carrier ranking and business agreements. An SAP TM carrier portal allows for easy collaboration with carriers.  SAP Event Management is leveraged to track and trace shipments.

Finally Mr. Chartron discussed the roll out to date.  So far Nestle Germany, Hungary and USA Food business are live on SAP TM.  Just in the USA the system handles 75.000 Customer Orders (per month) and 10.000 factory-to-DCs transfers per day.

Mr. Chartron concluded by saying “The main value of SAP TM comes with the consolidation of freight movements between divisions that work in a decentralized manner by using a consolidated integrated platform. Thais is, one global SAP TM is integrated with several regional ERP systems”. He also highlighted that “Visibility into carrier costs by detailed charge calculation and SAP analytics has helped with negotiations, and the proactive alerting by SAP Event Management Solution has improved customer satisfaction”.

He also shared a quote to the audience from the Nestle upper management:

“What a great job! I doubt anyone, anywhere has ever had such a smooth Transportation Management system implementation.”
Nestle Vice President, Supply Chain, USA

It was very interesting to follow Nestlé’s progress in their global rollout of SAP TM.  In fact, in SAPPHIRENOW Madrid back in November 2012 a manager in Patrick’s team shared some interesting information on the project. From today’s session, it is obvious Nestle has done tremendous progress in their ambitious goal to reduce their 5 billion CHF transportation spend while improving customer satisfaction.

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