A&A LMS Site Visit 5-2005

LMS, Growth through Transportation Execution with Systems Support

St. Louis, Missouri USA

May 3, 2005

Evan Armstrong

Key Personnel:

Dennis Schoemehl - President & CEO

John McHugh - CFO & COO

Tracy Meetre - Director of Technology Solutions & Integration

Greg Mecey - Director of Central Operations

Kerry Carey - Marketing Manager

Talking about listening to the "voice of the customer" and designing operations to meet customers' needs has almost become cliché. But that is exactly what LMS founder Denny Schoemehl did for his keystone customer Monsanto. Monsanto's transportation management needs were not being met by its former 3PL, so in 1996 Denny started LMS to meet Monsanto's needs. Today LMS manages significant portions of Monsanto's supply chain from its operations in St. Louis.

Since 1996, LMS has grown to be a $35 million non-asset based third-party logistics provider (3PL) of domestic transportation management solutions. In 2004, it managed over $350 million in freight for customers. LMS targets manufacturers, wholesalers, distributors and retailers with $5 million or more in annual transportation spends. In addition to Monsanto, LMS is running an onsite transportation management operation for BASF. Other customers include: Eaton, Essex Electric, Ferro, Hilex Poly, Kraton Polymers, Novus, and Superior Essex.

LMS transportation management core service offering includes: Load Control Centers/Central Dispatch Operations, Inbound/Outbound Transportation Management Programs, Transportation Collaboration Initiatives, and Supply Chain Network Evaluation and Redesign Studies.

To support its operations LMS needed a solid transportation management system (TMS). After performing a market analysis, Tracy Meetre, LMS technology director, determined that available off-the-shelf TMS did not meet the needs of LMS growing operations. Instead of building a completely new system, LMS utilized a robust optimization engine from an existing TMS and built the other components for its proprietary TMS dubbed "TOTAL". TOTAL is a web-native system running on the Microsoft solutions framework (.NET) with an underlying SQL 2000 database. It is integrated with GreatPlains for financials. To date, TOTAL has been integrated with multiple ERP systems including: SAP, Oracle, J.D. Edwards, and PeopleSoft and has been deployed for customers in less than 90 days.

TOTAL has three major systems components:

1. "TOTALOptimization": Order Management, Shipment Optimization, Automated Load Planning, Continuous Move Programs, Collaborative Networks

2. "TOTALExecution": Planning, Load Tendering, Customer/Carrier Communication, Shipment Verification, Shipment Tracking and Tracing

3. "TOTALVision": eRoute Guides, Vendor Compliance Programs, Rate Management, Freight Payment Integration, On-line Reporting

Figure 1--TOTAL TMS Top-Level System Flows

TOTAL has been very well thought out. It is competitive with major TMS vendor products including i2's "TM" and G-Log's "GC3" for domestic transportation management.

Monsanto LMS Onsite Operations

LMS manager Howard Robertson heads up the onsite Monsanto tactical transportation management operations and manages a staff of 12. In 2004, Monsanto had sales of $5.5 billion and produces agricultural chemicals and seed and conducts plant genomics and biotech research.

LMS is currently managing inbound and outbound truckload, LTL, and rail shipments for multiple divisions of Monsanto. These shipments include: packaged chemical, packaged seed, hopper truckloads of seed, ISO containers of chemicals to Brazil, rail tank cars of chemicals, expedited shipments, distribution center stock transfers and customer deliveries.

Flat files from Monsanto's SAP ERP system are downloaded to LMS TOTAL TMS daily. TOTAL is being used to plan transportation and build continuous moves of seed and chemical products.

LMS is also providing full freight bill audit and payment and loss and damage claims processing services to Monsanto.

By working with LMS, Monsanto has developed and implemented strategies resulting in operational improvements and enhanced customer service. These improvements have generated significant cost savings and increased customer satisfaction.

LMS was founded to meet a customer's unmet needs and has grown rapidly via its customer-centric approach. Now with a solid transportation management system and a growing transportation network, LMS delivers the benefits of working with a flat organization while providing the capabilities of a much larger 3PL.

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