Con-Way Logistics Offers Tightly Integrated Warehousing/Transportation Management Solutions

Aurora, IL

November 5, 2003

By

Richard Armstrong

Key CLI Personnel:

Mike Bare, VP/GM

Marcello Palozzo, Director of Operations

James Calcaterra, Director of Technology

Randy Mutschler, Director Customer Solutions

Con-Way Logistics, Inc. (CLI) weaves together warehousing and transportation management into a tightly meshed, integrated service. The control for the service is in the Supply Chain Management Center in Aurora, Illinois.

CLI has seven strategically located warehousing facilities throughout the U.S. An eighth will be added shortly. Facilities are in Aurora, IL; Atlanta, GA; Cranbury, NJ; Dallas, TX; Los Angeles, CA and Portland, OR. Currently CLI operates about 1 million square feet of warehouse space and has access to over 8 million more. Additional space is available in each of CLI’s six regional markets.

CLI runs all of its warehouses using the same WMS version of Provia’s ViaWare. The WMS is standardized across all facilities. This standardization allows for very tight integration to CLI’s TMS (i2), website visibility and Synthisor, the interconnecting middleware messaging tool from Descartes.

The IT flow looks like this:

Within the CLI system, an order is routinely processed and the shipment is loaded for delivery within hours. Uniquely, transportation optimization is a same-day activity. Most TMS optimizations take place prior to warehouse order picking and manual adjustments are required because of changes on the day of shipment.

CLI optimizes orders across its customers on the day of shipment, tracks the optimization results and offers gainsharing on productivity improvements to its customers. Mode conversions are done along a continuum from package to LTL to larger LTL to truckoad with stop-offs. Optimizations are done for all customer orders moving on any day. Customers normally contract for a standard table of transportation rates with reasonable discounts. Since the contracted rate and the ultimate price for an optimized load are both known at time of shipment, it is easy to calculate optimized gainshares for every customer involved. CLI’s model drives collaborative savings for all involved customers.

CLI’s solutions are particularly attractive for medium-sized customers who want help with SCM control and costs. CLI’s multi-client, variable cost business model with cross-client optimization can be applied for any size business but CLI’s solution is particularly attractive for medium-sized customers who want help with SCM control and costs.

Like UPS and other asset-related 3PLs, CLI has the advantage of priority demand on the trucking space of its sister companies. Leveraging sister company assets will be particularly important over the next couple of years because of extremely tight trucking capacity.

CLI’s biggest challenge for FY 2004 is to get the word out about its special integrated services. Most companies don’t realize that the Con-Way companies have national warehousing and SCM solutions.