WHITEPAPER – OCTOBER 2007
8 Good Reasons
To Consolidate PC-based
Management Systems (TMS)
On IBM’s System i Platform
Varsity Logistics, Inc.
The leader in parcel and freight solutions
for the IBM System i platform
91 Westborough Boulevard, Suite 2000
South San Francisco, CA 94080
Many companies in manufacturing, wholesale, or retail already use the IBM System i to
integrate most mission-critical enterprise data and business processes. In large,
medium, and small companies, a decision was made to support enterprise applications
on the System i because of its reliability, low cost of ownership, superior processing
power, flexibility, expandability, and security.
So, given the above, it may be surprising to hear that many of these companies still run
their shipping and transportation management applications (one of their most mission
critical applications) on a collection of PC’s and servers. Why would that be?
One explanation is that many companies started their shipping automation at relatively
low levels of volume and complexity. At that time, basic economics made using free,
carrier-provided, PC-based systems (or even PC-based, desk-top multi-carrier systems)
a no-brainer. Over time, batch interfaces to the companies’ other System i enterprise
applications were improvised, and shipping operations seemed to proceed without too
much difficulty…until increasing shipping volume, supply chain complexity (driven by
carriers, customers/trading partners, export shipments), and performance, integration,
and control requirements made these PC-based configurations less than optimal.
Rising fuel costs and increasing complication of supply/replenishment practices and
trading partner compliance requirements rapidly drove increasing needs to manage
shipping costs and processes. At that point, the requirements for efficiency,
performance, and reliability necessitated that shipping/TMS applications be moved to the
enterprise-grade System i platform and integrated tightly with other enterprise
applications (ERP, WMS) as well as external systems (of the transportation carriers,
customers/trading partners, customs, etc.)
Still, even at this point, organizational inertia or resistance in a company could get in the
way of making this very reasonable decision, such that one might hear many so-called
“reasons” for not moving the shipping/TMS processes to the System i. These include:
“It is what we have always used.”
“We got them for free from the carriers.”
“Shipping does not get a lot of visibility in our organization.”
“We have already invested in building an interface to the PC system.”
But these are really not very good reasons for a profit-driven business to forego the
significant additional performance and efficiency benefits and extraordinary ROI that
accrue when such a change is made. We know.
Varsity Logistics has a proud tradition of enabling many companies to make this change
and reap the substantial rewards. In addition to supporting very high volume and
complex shippers (including those shipping many thousands of packages a day, through
many distinct distribution centers), Varsity Logistics has helped hundreds of small- to
medium-sized shippers replace their PC shipping systems with Varsity’s System i
shipping/TMS solutions. Post-implementation customer responses have been very
positive, with most customers reporting extremely rapid ROI/payback. Customers
consistently report that they should have made the switch sooner.
This paper examines the 8 very good, real reasons that Varsity’s customers identify for
running their shipping/TMS processes on the System i using Varsity’s best-of-breed
8 Reasons To Use System i
1. Centralize all of your Shipping Technology on One Platform with One
Eliminate the complexity and overhead it takes to manage multiple vendors (on multiple
platforms with multiple interfaces) by centralizing all of your shipping related functionality
with one vendor on your System i. Whether it be parcel shipping, Less-than-Truckload
shipping or Full Truckload shipping, international documents, Bill of Lading generation,
freight or parcel bill auditing, ASNs or UCC 128s -- all can be handled seamlessly by
Varsity’s System i-based software suite.
Wigwam Mills Centralizes Shipping Technology on the System i
Wigwam Mills is an excellent example of a company that vastly improved shipping
processes by centralizing their shipping technology with one vendor. Today Wigwam
Mills has one of the most automated distribution
centers in the country. Each day, they ship 350-500
parcels of knitted socks from their 90,000 square foot
In 1998, Wigwam Mills undertook an initiative to re-
place multiple outdated PC-based transportation and
warehouse management systems. The company
had one PC system for picking and packing, another
for logistics and warehouse location and a third for
order entry and inventory management.
Maintaining multiple PC-based software systems had
several disadvantages. Although the initial investment in their PC systems was low,
maintenance costs were excessive. Expensive software consultants were required each
time a change was needed. To complicate matters, these systems from multiple vendors
didn't "speak" to each other. Keeping systems synchronized was labor intensive and
impacted warehouse productivity. The shipping department needed to shutdown an hour
early each day to allow time for close-out.
In 1999 Wigwam Mills replaced their PC shipping systems with Varsity’s System i-based
shipping system. Today, the company enjoys seamless shipping, inventory and order
Goods are selected from a paper pick slip that is bar coded with the order number.
Picked items are scanned and RF is used to instantly report the inventory adjustment
triggering automated replenishment. At the packing station, RF is used to identify which
order is being packed through an ID scan and to note when a container is full.
Wigwam's investment in System i-based software had a big payoff. The company
reduced costs and increased productivity. Time-consuming upload and download
processes were eliminated. Now, instead of shutting down their shipping operations one
hour before the end-of-the-day, Wigwam completes daily shipping close-out in less than
2. Reduce Order to Shipment Cycle Time
With real-time data transfer you reduce order to shipment cycle time. “Next day delivery”
orders can be taken later in the day, increasing sales and improving customer service.
Using “real-time data transfer” rather than “batch transfer” interfaces to PC systems (or
worse, manual data entry) allows orders to be processed and shipped virtually
JDR Microdevices Reduces Order to
Shipment Cycle Time with Real-time Data Transfer
JDR Microdevices (JDR) is a direct marketer of electronic components and PC
peripherals with catalog and web-based sales of over $40 million per year. With over
5,000 different SKUs, the company has an extensive
customer service department that helps businesses and
consumers resolve order issues, from the order process itself
to tracking shipment status.
Seeking to improve their customer’s order experience, JDR
Microdevices switched from using a mix of PC-based carrier
shipping systems to a System i shipping system. Although
their PC-based systems were provided by their parcel carriers
at no cost, order processing and customer service suffered.
Because the proprietary systems could not communicate with each other, package
processing from order to shipment took longer than necessary and impeded customer
service. Same-day order shipments were cutoff at noon.
By using their System i to manage the entire shipping process, JDR now services their
customers with extreme efficiency and cost effectiveness. The company’s customer
service representatives easily access order and shipment status information from a
single, carrier-neutral screen.
Making the switch from carrier-supplied PC shipping systems to System i-based
shipping software enabled JDR to extend their shipping day by four hours. This gives
JDR’s customers more time to place orders, and JDR more time to process them.
3. Reduce Shipping Errors
Shipping errors cost, on average, $50 to correct. The simplest way to minimize errors at
the point of shipping is to minimize user input. By running all programs on the System i,
extremely tight and real time integration is possible between the order entry and shipping
systems. Shipping instructions (e.g. carrier, service type, accessorials, etc.) can be
passed in the interface, as can weight. In this “black box” mode, all that shipping
personnel are required to do is scan the order bar code and attach the resultant shipping
label to the box. User training is minimal, and expensive user errors are eliminated.
Total Biz Fulfillment Achieves 100% Order Accuracy
One hundred percent order accuracy is the goal of Total Biz Fulfillment who, as a third-
party fulfillment house, ships over 1,800 parcels a day to merchants such as Wal-Mart,
Target, Kohl's and Toys "R" Us.
To ensure error-free orders, Total Biz Fulfillment relies on a
state-of-the-art order fulfillment system that includes IBM
System i-based enterprise resource planning and shipping
software. These systems integrate seamlessly and eliminate
the need to re-key addresses, which often leads to errors.
Order pickers in the warehouse wear radio frequency (RF) devices
that record each item as they select and pack it. Each box is marked
with a bar code that, when scanned by the order picker, is electronically linked to the
unique order number. As items are picked and packed, the box contents are verified
against the order so that discrepancies can be corrected at the picking location. When
the package arrives at the shipping station, there is minimal interaction. The shipper
simply scans the bar code on the box, scans the weight from the scale and applies the
printed shipping label. No data entry is required.
By tightly integrating their order entry and shipping systems, Total Biz Fulfillment ships
its customers’ orders right the first time, every time.
4. Improve Customers’ Order Experience
A System i shipping system enables real-time shipping information to be made available
at virtually any point in the order fulfillment process. You can empower your customers
by informing them of their shipping options and costs when they place their orders. A
System i shipping system allows you to rate shop in real-time to provide available carrier
and service type options and associated costs. Simply select the customer’s preferred
option from your current order entry screen, and this information will be captured and
utilized when the order is shipped.
FMP Improves Their Customer Order Experience with System i-based Shipping
An unwavering commitment to exceptional customer satisfaction is behind the success
of FMP, one of the largest wholesale distributors of food service equipment parts in
North America. Repair parts are frequently critical to a
restaurant's business. To ensure the highest level of customer
satisfaction, FMP promises their customers that orders
received by 5:00 p.m. will leave the warehouse the same day.
Delivering their customer service promise starts with an IBM
System i server and System i-based ERP and shipping
To create an exceptional customer order experience, shipping charges are calculated at
the time the order is placed, eliminating guesstimates or calls to the shipping department
for cost calculation. Customers then have the option of selecting the best shipping
method based on cost and urgency. By leveraging their System i for both order
management and shipping, FMP achieves same day shipment over 95% of the time.
5. Improve Customer Support Representative Efficiency
Eliminate the need for your customer service representatives to log onto carrier Web sites
and re-key or “cut and paste” tracking numbers. Eliminate the calls from Customer
Support to the warehouse to ascertain package status. Your customer service
representatives can simply select the order they wish to track, and a complete history and
current status of that order will be displayed, all within the ERP screens they use today.
Package tracking information is available quickly from any System i terminal, enabled by
direct links from your System i shipping system to the parcel carrier host systems.
Kwik Goal Scores with Efficient Customer Service
Kwik Goal is known for its tough soccer equipment. For several years, Kwik Goal relied
on UPS' PC shipping software to manage its shipments. One of the drawbacks of the
company’s UPS shipping system was the data disconnect between the PC system and
the IBM System i. Order information was only uploaded to their IBM System i at the end
of each day. Without company-wide access to real-time shipping information, customer
Making the move to a System i-based shipping software package gave Kwik Goal’s
service department access to real-time package shipment information from any System i
terminal. Customer service agents immediately see where the package is in the shipping
process without bothering the shipping department to track down details. From the
moment of order entry, through to shipping and final customer billing, all the data is
available in one system for the ultimate in customer service efficiency.
6. Improve Invoicing Speed and Accuracy
With a System i shipping system, accurate shipping cost information can be written back
to the G/L at the time each package is shipped. This information will include all relevant
accessorial charges to accurately reflect the total, true cost of shipping the package. In
addition, by using the “bill as/ship as” feature, you have
the complete flexibility to bill clients at published rates
while capturing the actual cost based on your company’s
negotiated rates. Invoices, including the appropriate
shipping costs can even be printed at the shipping
station and included with the item being shipped.
Leading Pharmaceutical Firm Boosts Invoicing
Speed and Accuracy
Improving invoicing speed and accuracy was one of the drivers behind a well-known
pharmaceutical company’s move to a System i-based shipping system. The perishable
nature of the company’s products makes fast and accurate delivery critical. The
company selected Varsity’s shipping software to replace inefficient manual shipping
processes and reliance on a third-party fulfillment house. Today, the entire shipping
process from order entry to invoicing is seamless and very fast.
Pick ticket/invoices are sent from the company’s order system to the optimal warehouse
-based on available inventory, customer request, and shipping method. Warehouse
workers fulfill the order, peel the bar-coded delivery number from the pick ticket/invoice
and place it on the box. The pick ticket/invoice is placed inside with the order. This
makes it very easy for their customers to confirm that the order and price are correct.
By including the invoice with the shipment, the expense of preparing and mailing
invoices is eliminated and accounts are invoiced much faster.
7. Improve Business Decisions Based on Accurate Data
A System i-based shipping system stores all the available data on every shipment in a
single DB2 database. This information provides an incredible source of data on which to
base business improvement. Ad hoc inquiries and “what if” modeling can provide
answers to any number of business questions such as: What are
our true shipping costs by product, by customer, by carrier?
How does this compare with our estimated costs and with
how we are charging our customers? Do our carrier dis-
counts match our business? How often and why are we
expediting shipments using more costly services?
Centralized Shipping Data Backs Ryan Herco’s
Greater insight into shipping data with the goal of improved
customer profitability was one of the drivers behind Ryan Herco Product’s move from
twenty-two standalone PC shipping systems to multi-carrier shipping software that runs
on their System i.
By storing all their shipping data in a single DB2 database, Ryan Herco gained insight
into accessorial charges such as residential delivery, non-consignment, address
correction and oversize charges – many of which should have been passed along to
their customers or avoided altogether. These charges really added up. When they
compared their estimated shipping charges against actual carrier bills, Ryan Herco
found that they paid over $100,000 a year in accessorial charges.
With greater insight into their shipping data, Ryan Herco can evaluate customer
profitability and manage the waiving of customers’ freight expense. Reports generated
from their historical database provide Ryan Herco's management team with the business
decision information required to evaluate customer profitability—after accounting for
8. Improve Business Flexibility
A System i shipping system greatly improves the flexibility your company has to make
the best logistics decisions for the business. Switching carriers, adding carriers, or even
using different modes is extremely simple and cost effective. Additional carriers only
require the Carrier Compliance Kit (CCK) for that carrier. The CCK contains all of the
rates and service types for the chosen carrier as well as the appropriate electronic
manifesting support. Unlike a PC system, no interface changes will be required as the
interface is already designed to support the data
requirements of the carrier. By decoupling the carrier
decision from the technology decision, you are free to make
the best carrier choice based on the services that carrier can
It is also simple and extremely cost effective to add
additional shipping sites. Bringing on a new warehouse
simply requires System i client access, the necessary
shipping hardware (typically a scale, a scanner and a printer)
and the appropriate carrier zone table for the zip code of the
new location. Varsity has numerous customers supporting
50+ locations from a single System i, and new sites can be
brought online in just a couple of days.
The speed and reliability of the System i platform also provides the
basis for a System i shipping system to support your company’s growth. Varsity’s
shipping software supports environments shipping anywhere from 100 packages/day to
companies shipping 100,000+ packages/day.
OKI Bering’s System i Runs Shipping for 14 Distribution Centers
OKI Bering is a worldwide wholesaler of welding, safety and industrial items. Shipments
average 2,800 parcels a day shipped through fourteen North American distribution
centers. Five distribution centers have HAZMAT requirements, and six ship parcels to a
key partner customer using special freight charges.
When OKI Bering made the move to Varsity’s System i-based shipping software, they
set the ambitious goal to upgrade fourteen distribution centers at once. Thanks to the
flexibility of the System i platform, Varsity was able to bring all fourteen distribution sites
live on the same day, and in line with a six week implementation schedule.
It Only Takes One Good Reason to Change, But The Rewards Are Many
As some of Varsity’s customers have found, you do not need eight reasons to make the
switch. Even one or two are often enough to deliver an ROI in six to twelve months. Join
hundreds of companies who have benefited from running their shipping/TMS process on
the IBM System i platform. You and your company will be rewarded with:
♦ Better customer order experience
♦ Reduced order to shipment cycle time
♦ Fewer shipping errors
♦ Improved customer support efficiency
♦ Faster invoicing speed and accuracy
♦ Greater business flexibility
♦ Centralized shipping technology
For additional information on how Varsity Logistics, Inc. can assist your company
achieve similar benefits, please contact us at:
91 Westborough Boulevard, Suite 2000
South San Francisco, CA 94080
Founded in 1989, Varsity Logistics, Inc. is the leading provider of IBM System i shipping
systems. Varsity's software supports the full spectrum of parcel, truckload, and LTL
shipments, including rate shopping, manifesting, parcel packing, international shipments,
and invoice auditing. Deployed in more than 1,100 North American distribution sites,
Varsity helps organizations of all sizes improve shipping efficiencies, increase customer
satisfaction, and reduce shipping expense. Varsity is headquartered in
San Francisco, California. www.varsitylogistics.com.