Economic Benefits of a Yard Management System
Many large and sophisticated companies continue to use spreadsheets, chalkboards, or card systems to manage their yard operations. This simplistic approach may work some of the time, but the reality is that it only takes one or two human errors per week to result in significant cost issues.
Problems relating to manual yard management can quickly result in misplaced trailers that contain valuable merchandise needed to fulfill customer/store orders. The cost of sending a yard driver into the yard to search for a lost trailer is relatively minor. The real penalty is the negative impact on sales revenue when critical inventory is lost in the yard prior to a major promotional or seasonal event.
When developing the return on investment for advanced yard management software, it is important to understand the direct and indirect costs that may apply to your logistics operation.
Direct benefits are measurable operating savings that relate directly to the yard operation including yard driver labor, fleet equipment costs, and accessorial charges.
It is important to develop the operating expenses associated specifically to the yard operation. Companies that have deployed advanced YMS applications typically gain efficiency with yard jockey labor in the range of 25 percent to 35 percent because the software eliminates manual searching processes in addition to maximizing yard driver efficiency. Yard operations with advanced YMS typically enjoy an increase of two to three more trailer moves per hour.
Yard operations with advanced YMS also spend far fewer hours performing yard checks which provide a means of verifying data integrity in the yard operation. These efficiency gains typically translate into reduced labor requirements and less yard jockey truck requirements.
YMS users enjoy improvements in trailer utilization rates because of the significant improvement in how trucking assets are managed in the yard. The standard time required for trailers to pass through a main security gate is in the range of five to ten minutes. This time can be reduced to 30 seconds if the YMS manages all site check-in procedures while the load is in transit towards the site.
The ability to provide advance appointments to drivers combined with the optimized management of trailers within the yard typically results in a 10 percent to 15 percent reduction in the number of trailers required to support a large logistics operation. This can either translate into a reduced trailer leasing expense or a reduced capital investment into transportation infrastructure.
YMS can help avoid third-party carrier accessorial charges. A robust YMS application will go a long way to avoiding many of these expenses. Companies that deploy advanced YMS applications typically avoid these expenses by having the system closely monitor when third-party assets need to be liberated based on dwell-time limitations.
Dock scheduling system enables trailers to be assigned to the right door the first time, thereby avoiding having to move the trailer to another door due to human error.
Indirect benefits are subjective savings incurred due to yard operation improvements that are relatively difficult to measure, such as reduced warehouse wait times, warehouse labor efficiency, improved order fill rates, and reduced product spoilage. Improvements in order fill rates can be realized when trailers are expedited for receiving on the basis of assigning the highest priorities to loads containing inventory that is in high demand.
Reduced inventory losses come about when, for example, spoilage of perishables are avoided when YMS agents notify the control center that the refrigerated unit is low on fuel or that the temperature inside the trailer is too high. Trailers held in the yard with dated inventory can be prioritized on the basis of product expiration dates to prevent newer stock from being transferred before older stock.
Improvements in warehouse efficiency are common with companies that deploy advanced YMS applications. Warehouse loading delays, caused by trailers not being brought to the doors on time, can result in shipping dock congestion and inefficient outbound labor productivity.
Companies that deploy advanced YMS solutions report increases in warehouse throughput efficiency on the order of 10 percent to 12 percent for outbound operations during peak season. This benefit is directly tied to YMS because the application works to avoid delays incurred due to trailers not being brought to the shipping doors on time.
A trailer that is late in departing the distribution facility is also likely to be a trailer that is late in arriving at a retail store. The retail stores hire labor to unload trailers based on set delivery schedules. These labor resources may incur inefficiencies or overtime expenses as a direct result of late incoming trailer loads as a by-product of an inefficient yard operation.
Greg Braun is senior vice president at C3 Solutions Inc., a supply-chain execution company specializing in yard management and dock scheduling.
Need a Logistics Provider?
Compare over 100 Instantly