When Data Is as Important as the Freight ItselfBy David F. Carr | Posted 2002-10-10 Email Print
Re-Thinking HR: What Every CIO Needs to Know About Tomorrow's Workforce
Roadway Express carries freight, sure. But almost as important is the data it carries about the loads it carries.
Roadway Express carries freight, sure. But almost as important is the data it carries about the loads it carries. Manufacturers have to know whether their shipments have arrived; and retailers have to know when they will arrive.
That's why one of Roadway's most important recent initiatives has been improving the quality of the data it hands off to shippers and freight recipients, right down to the purchase-order number. When all is said and done, Roadway wants to replace shipping papers altogether. The preferred document: the electronic bill of lading (BOL).
Chief Information Officer Robert W. Obee and other Roadway managers are active in the Voluntary Interindustry Commerce Standards Association (VICS), a standards organization focused on the retail supply chain. Roadway and the trade group are pushing a standard format for submitting and exchanging the bills.
A bill of lading traditionally has been created by the sender, providing details of the contents of a shipment, its destination and any special handling requirements. Roadway uses another document, called a waybill, for shipments in transit, and ultimately generates a number of other electronic and paper documents for the shipper and recipient.
But the accuracy of all these other documents depends on getting the document recorded properly and verified.
Right now, more than 95% of BOL documents are still handed to Roadway's driver as a piece of paper. In the best case, the paper bill of lading may be computer printed and bar-coded. But about 30% still come in handwritten.
The difference between handling an electronic bill versus a paper one is about $1 each. That's worth about a half-percentage point in operating margin, given that Roadway's average revenue per shipment is about $200. But the real gains are in accuracy, since the information that comes in electronically avoids the pitfalls of manual data entry.
At the same time, Roadway has attacked the mountain of paper generated by 50,000 to 60,000 shipments per day with technology and training. Its Acquire Shipment Detail system tries to boost accuracy by providing templates of the most frequently shipped items from particular customers so that data entry clerks don't have to keep typing in the details that haven't changed. Data entry personnel must pass regular certification tests and are called "ASD professionals," rather than clerks.
Perhaps the most boring but most important task is to get the original purchase-order number into the electronic document correctly. The purchase-order number acts sort of like an easy-pass certificate, making it possible to quickly clear shipments through different "breakbulk" distribution facilities, trucks and docks at recipients' stores and factories. Here, Roadway's systems try to boost accuracy by making sure the purchase order that's entered matches the standard pattern for a retailer or other recipient. So if the system expects four alphabetic characters, followed by seven digits, it knows to raise a red flag if the pattern doesn't match.
"It may sound trivial, but it's one of the most significant things Roadway does that gives us a competitive advantage over other carriers when dealing with our retailers," Obee says. "One of the things they rate us on is the percentage of the time they receive accurate and timely status updates from us, and we frequently score in the high 90% range. We've been told of examples of competitors who are in the 60% range."
But the biggest error-proofing will come when the original documents are submitted in electronic form to Roadway first. That makes it faster, cheaper and more accurate to process a new shipment. Some retailers have begun to make this a requirement for their vendors, realizing that it affects the quality of the data that ultimately flows into their systems. Federated Department Stores, the parent company of Macy's and Bloomingdale's, is moving in this direction because it found shipments were sitting idle in its distribution centers for lack of accurate information about the merchandise they contained.
Roadway now shows Federated whether a bill of lading was submitted electronically or on paper. This gives Federated the data it needs to enforce the new requirement on suppliers.
At Henkel Consumer Adhesives, a Roadway customer that sells its products through retailers like Wal-Mart and Home Depot, vice president of operations Gene E. Obrock says doing business electronically is in the supplier's interest as well. "It ensures data integrity, speed and accuracy," he says.