promotions but also to distribute the material to restaurants based on a profiling system that fine-tunes shipments
for each individual register, window, and drive-through
location in the chain’s system.
Archway’s client list includes some of the best-known
names in American business: Ford, Chrysler, General
Motors, Lowes, Staples, American Eagle Outfitters, Colgate,
Owens Corning, McGraw Hill, and others. It serves those
clients from 21 distribution centers that collectively occupy
more than 4 million square feet of space—and that is growing, says Johnson, who is the company’s vice president of
continuous improvement.
But while Archway shines in the services it provides its
customers, until a few years ago, its transportation management did not measure up. The source of the problem
was the system Archway was
using for transportation rating
and customer billing. The
company had built the system
internally, spending hundreds
of thousands of dollars in the
process. But by nearly every
measure, it did not work.
“It was a complete failure,”
says Johnson. “And it was prov-
ing very costly.”
Just how costly was revealed
by an audit Johnson conducted
shortly after he arrived in 2004.
The audit uncovered unbilled
charges going back five or six
years. With limited supporting
material, Archway was forced
to take a significant write-off. “We could not charge for
those shipments. We had no idea what they were,” Johnson
says. Obviously, it was time for a new approach, and
Johnson decided the company’s best bet was to call in a
transportation specialist.
Archway’s staff to develop a full understanding of the operation—Archway’s reporting requirements, manifesting and
operating systems, and so forth. “They worked with our
teams to see what we were doing,” he says. To ensure a
smooth handoff, Echo kept a full-time team at Archway
throughout the transition, and continues to maintain an
on-site team at Archway today.
Among other improvements, Echo developed a rating
plan for its client’s small packages. Of Archway’s approximately $25 million annual transportation spend, 60 to 65
percent goes for small package shipments. The rating system, built off files from Federal Express, provides rating and
routing for all small package shipments and established
billing rules for clients.
The result was an immediate reduction in billing times.
Where it once took as long as
nine months to complete a
billing process, it now happens
in days. Each Sunday, FedEx
uploads information on shipments through the previous
Wednesday to the Echo system.
“[The Echo system then] goes
through rating and routing,
kicks out exceptions, gives the
team a day to fix those, and on
Wednesday loads into the
Archway system,” Johnson
explains. “We can track by job
number and client, and show
billing rules. We get two files
from Echo: One goes to a
financial application, the other
to a billing application. They have really helped us manage
our day-to-day business.”
QUICK TURNAROUND
Archway selected Echo Global Logistics Inc., a Chicago-
based third-party transportation management specialist, to
take over management of its transportation. What Echo
brought to the partnership, Johnson says, was a combina-
tion of “relationships, competence, and knowledge.” On top
of that, he says, Echo brought top-notch negotiating capa-
bilities. “That was a big piece,” he says. “And they gave us a
textbook implementation plan.”
Johnson set an aggressive timeline for the project, giving
Echo just 45 days to turn matters around. But he says he
had full confidence in the new contractor. “We felt we could
partner with them, roll up our sleeves, and get things done,”
he says.
Johnson reports that he was particularly impressed by the
way Echo employees jumped right in, meeting with
BIG PAYOFF
Johnson sees Echo as a true business partner for Archway.
“We have open books,” he says. “We know what each other
is doing.”
Furthermore, he says, Echo has steered Archway toward
new business. “They have helped us come to the table with
existing business clients and new clients,” Johnson says.
“And I am comfortable putting them in front of a client.”
He cites as an example Echo’s analysis of one client’s
spending. “Based on their knowledge and leverage in the
transportation industry, they showed that they could save
30 percent on small package shipping and 35 percent on
LTL based on current rates. That’s on a million-dollar
spend. That’s savings the client gets.”
Johnson says the partnership has paid off in multiple
ways for Archway. “The relationship has meant millions and
millions of dollars, and it has helped us secure business,” he
says. But it’s also been a two-way street, he adds. “It has
helped us, and it has helped them.” ;
