Loomis Fargo & Co.: Making Money Move, Efficiently - ' Most Logistics Problems Involve 'By John McCormick Print
The nation's No. 2 armored-car company wants to electronically manage cash for retailers, banks and the Fed—and boost revenue in the process. First, it needs to upgrade a system that's still largely based on human sweat and paper strips.
Much of the action at Loomis happens at its cash processing facilities—the company has about 200 locations across the country, including about 130 that receive, count, wrap, store and distribute money to and from the Federal Reserve, banks, ATMs, and retail and other customers.
The center in Boylston, Mass., is the company's largest cash processing center in terms of transaction volume, but you could easily drive right past it. The building, a tan, windowless one-story structure, is tucked neatly back among the trees and bushes that shade a rural two-lane highway. It's a relatively quiet section of town, usually disturbed only by the low rumble of a Loomis armored car.
On a typical morning, any one of 22 Loomis trucks will pull into the driveway and a bay door will open, exposing the giant, grinding money-processing machine hidden behind the building's otherwise placid facade.
Boylston is a 55,000-square-foot factory where some 200 guards, money movers and cash counters operate in three shifts, 24 hours a day. They work under the watchful eye of trained supervisors such as Chris Bosse, the manager of cash management services, and some 200 closed-circuit cameras.
On any given day, this facility may process money for Bank of America, Mellon Bank and Sovereign Bank, among others. The company will not say how much money is handled each day at the facility, but it's clearly well into the millions.
Greenbacks, however, aren't the only paper handled here.
Despite the fact that computers sit on every desk, the whole operation is heavily paper-dependent. Money is tracked in the facility—from the armored-car crews to the tellers in the back room who verify the bags' contents—by paper logs that Loomis calls "the manifest." These sheets include what's in each package making its way through the facility, the amount, and which customer's money is inside.
It's a system that works, but not one that's seen as terribly efficient. "If you don't have to deal with paper," Bosse says, "or the information were electronic, then, yeah, it would make us more efficient."
"Plus," he says, "it would give us up-to-the-minute tracking of where deposits are in the process, which would allow us to respond to a bank a little faster."
The company has put in place some initial Glory bar-code systems, which allow the bags to be scanned when they're offloaded from the trucks and then electronically checked in at the facility, according to Grochett. These systems are not yet in the Boylston facility, though Grochett says there are plans to implement package track-and-trace technology companywide.
Today in Boylston, the paper trail begins as soon as the armored-car drivers jump into their rigs.
Their stops have been pre-assigned based on the orders that came in for the day through the Internet Change Order system. Those orders are fed into SOFI, which works with a mapping package from software vendor ESRI to figure out the best routes for the trucks. On some days, the best routes aren't the most efficient ones because the company has to vary its pickups to avoid robberies. The system prints out paper manifests, which the drivers follow.
Out on the road, the driver writes down everything that happens—how many stops are made, the length of each stop and what was picked up at each location.
"When our drivers come back in, they'll debrief their route for everything that they had throughout the course of the day, and [we'll] capture all of the dollars, all of the stops, all of the times and so forth," Silewicz explains. Former CIO Grochett calls it "paper tracking."
Each afternoon, all of the driver reports—the paper on which drivers record what happened on their routes—are manually keyed by Boylston staffers into the SOFI system for billing and record-keeping purposes.
According to Grochett, the company is getting ready to give its drivers mobile devices to use en route and eliminate the manual key-entry back at the branch. But the system, which is based on Sprint Nextel wireless connectivity, is still in the pilot stage.
The system, according to Sprint, also features a global positioning system to track trucks and crews wirelessly, a capability that might have helped Loomis find the Las Vegas truck that went missing in 1993.
Loomis' goal, according to Silewicz, is "to automate that process and get to a little more real-time visibility of what our drivers are doing on the road." The benefit, he says, would be to gain increased visibility into operations and to be able to immediately pass information about pickups and deliveries to customers.
"It is going to streamline their internal efficiencies, which is going to be a huge benefit for them as a company when you look at the cost savings and time savings," says Christy Kelso, a manager in Sprint's finance and insurance marketing group. And when Loomis looks at the customer, she says, the customer will "be able to get all of the detailed tracking information [available for] any UPS or FedEx package."
Bosse also says that having this information zapped back to Loomis while the drivers are out on the road, as opposed to having a physical data transfer back at the shop, would trim the time now needed to check in the truck and its contents at Boylston by about a third; that process now takes about 30 minutes.
Over in the money counting room, bags are moved around in red bins. Each bag is sealed. The bag number, the name of the customer and the amount inside are all written on the bag. The company would not say how much a typical bag holds, other than it's usually "much less than $10,000."
In the cash room, some 20 tellers, mostly women who appear to be in the 30s and 40s, sit in glass cubicles. Cameras hang from the ceiling and look over each teller's shoulder. Employees have to pass through two locked doors to get into the room and are reminded by a sign on the wall that "No guns, knives, Mace" are permitted inside.
A delivery of one customer's cash bags may be divided up among several tellers. When the tellers pick up a bag, they break the seal, then grab the money and start counting the bills to make sure that what the customer says is in the bag is, indeed, in the bag. Cash-counting machines attached to the tellers' computers add up the money. Through this connection, each teller's tally is automatically fed into the Glory system.
The money is then taken to a consolidation teller—a person who operates a giant money-counting machine called "Big Jim." Also known as the Banknote Processing System 1000, Big Jim cost $1 million and was manufactured by Munich, Germany-based Giesecke & Devrient. The machine recounts a customer delivery that may have been divided up among several tellers. It can count and sort some 70,000 banknotes an hour.
The money is then stored in one of the building's vaults—large storerooms behind barred doors—or shipped back to the Fed.
The information in the Glory system is then sent to the customer for balancing purposes. The information is also pulled by Loomis into the SOFI system for billing purposes.
The Internet Change Order system can help smooth the processing of cash. If there's a discrepancy in a count, the system will send a message to the customer. At that point, the two parties try to figure out where the error occurred. It could be that either a bank or Loomis employee simply wrote down an incorrect number on one of the slips that follow the cash around.
Sometimes, to resolve a dispute, a Loomis staffer might be asked to do a little garbage picking. At the end of the counting process, all of the cash wrappers and the bags that come in from a customer are put in giant clear garbage bags and stored for 90 days in a back room. To clear things up, a staffer might have to go through the plastic container to find the cash bags associated with that transaction to make sure the correct bag numbers, amounts and customer name were credited to an account by Loomis cash counters.
- Making Change: It costs $110 billion a year to move cash around the country; there's got to be an easier, cheaper way.
- Most Logistics Problems Involve Less Shooting: Cash carriers that handle automation wrong could go out of business; but forgetting real-world dangers could get people killed, too.
- Automating a Cash Warehouse: The place has computers, but the real work is done on paper.
- Jumping Through the Fed's Hoops: Pickup and delivery is inefficient enough, but add in a few extra stops so the Fed can keep an eye on things, and you add days of delays.
- Vital Stats: Loomis, Fargo & Co.: Company size, challenges, goals, and how it will measure its progress.
- Player Roster: Who's moving, who's shaking and what they're shaking up.
- Base Technologies:What they're using to do what they're doing, and what they'd use to do it better.
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