TSI streamlines LG Electronics’ inbound distribution, saves millions

Two years ago LG Electronics SA managed various transporters to bring in up to 600 containers a month. It needed them in a steady stream of about 25 per day, but its providers were managing only around 12 a day.

They were costing the company more than R3 million a month on demurrage, storage and re-delivery costs. And LG had little choice but to pay up – it had no control over or insight into its shipments.

Then the company tested a “revolutionary new logistics management system” from TSI, resulting in savings of millions in the next two years, thanks to unprecedented efficiencies.

TSI developed a system that handed control to customers by pinpointing the cause of shipment delays, thus forcing providers to do better. It achieved this by obtaining live information on the whereabouts of customer shipments throughout the supply chain, triggering automated alerts and escalations at cases of workflow or process ‘violations’. The service is backed by rigorous electronic document management, which ensure hitch-free shipping and productive relationships with ports and customs officials, all to the benefit of the customer.

Live tracking is possible through integration with the logistics system of the National Ports Authority and track-and-trace technology in transporters vehicles.

With that level of control and certainty, LG was able to cut out the unnecessary costs, blaming games and delays that have plagued importers since the dawn of international trade. Within a month TSI had changed the dynamics of its operation, making transporters responsible for their actions. It was receiving thirty containers a day or more and soon eradicated the order fulfilment backlog.

Furthermore, TSI’s all-seeing system enabled a more efficient and just pricing model. TSI charges only a fixed management fee on delivery and honours service level agreements, covering documentation, collection and delivery times, container turn-ins and more.

The savings tell the whole story, and as a result of the difference TSI has made to LG’s business, its two-year contract was recently extended.

“TSI’s approach to logistics is new in South Africa: instead of being tied to a single supplier, customers can negotiate peak season with multiple transporters on board, spreading their risk. TSI manages the entire process, and the TSI system allows them to follow the entire logistics loop. It is a ground-breaking evolution.”

- Josh Hamann, GM, Logistics, LG Electronics, South Africa

“Changing our logistics was a pleasure. TSI always had a solution for any problem, and I am always kept fully informed. Not only was their service efficient, but it was cost-efficient too. I find them very professional and honest.”

- Loshni Naidoo, Logistics Manager, Extrupet, “recyclers of plastic bottles”

“We are always looking for better, more proactive ways to deliver tracking services to our customers. We integrated our system with theirs, for the best possible results for us, them and our customers. Now I can go to one haulier that negotiates rates for me, and knows my service requirements and that of my customer.”

- Andrew Modinos, regional director, Johannesburg, Mediterranean Shipping Company

“A short note to convey my thanks and appreciation for a sterling performance from MSC and your business partner, TSI during December 2008 – 100% performance all round – well done!”

- Louie Govender Shipping Manager, P & G South African Trading (Pty) Ltd