July 2014 | Case Studies | Casebook

TMS: Getting in on the Ground Floor

Tags: Trucking, Warehousing, Transportation Management Systems (TMS), Distribution, Transportation

TAJ Flooring executives Julie Kyle and Denise Johnson

TAJ Flooring's new transportation management system lays the foundation for improved logistics and customer service.

TAJ Flooring Inc. is an Elgin, Ill.-based importer and distributor of commercial flooring, including vinyl tile, plank, sheet, and loose lay products used in applications such as retail stores, hospitals, sports facilities, churches, and offices. Rapid growth prompted the company to rethink its transportation management strategy—and enlist help from freight solutions provider Trinity Logistics.

TAJ is the North American distribution arm for all Tajima Flooring products, in addition to TAJ-branded products and adhesives sold worldwide. The company sells its products through independent sales reps around the country who work with architects, contractors, and design communities.

The company had experienced significant success since its start in 2008, and wanted to expand its offerings by developing new product brands and categories. At the same time, TAJ was experiencing increasing product demand from its customer base, which put pressure on logistics operations.

"We were using two unrelated third-party warehouse facilities that were managed differently—from inventory processes to logistics operations—and we were at the mercy of their shipping procedures," says Julie Kyle, TAJ Flooring chief operations officer.

"One warehouse was in Georgia, the other in Nevada," she adds. "The Georgia location managed 80 percent of our inventory, so we worked with that facility more, but we had to work with each warehouse independently to handle our freight. And in neither facility did we have the logistics control or visibility we needed."

TAJ's manual, time-consuming freight quoting process represented a major pain point. The company needed to respond to 10 to 15 requests for freight quotes each day, but it was increasingly difficult to get back to sales representatives and customers with those quotes quickly. The delays were stifling growth.

In It for the Long Haul

"A large commercial flooring project can take more than 12 months, and TAJ sales and customer service reps are involved in every step, from concept to installation," Kyle says. "Therefore, customer service is critical. Using a third-party warehouse didn't allow us to provide the level of service our customers expected.

"When we needed a freight quote, we had to call one of the warehouses, then wait until the staff there had time to prepare the quote and get back to us," she recalls. "During that time, our sales reps and customers were waiting. People don't like to wait."

More importantly, the delays were costing TAJ business. "Our customers—primarily flooring contractors—must provide bids quickly to remain competitive, and they have to figure freight costs into their estimates," she adds. "If we can't supply freight quotes immediately, they lose—and so do we."

In addition to these challenges, TAJ lacked freight spend visibility, was unable to generate accurate shipping reports, and was saddled with labor-intensive processes for verifying shipment deliveries.

The company also needed to achieve more competitive delivered sales pricing. "We weren't able to negotiate freight rates at all," Kyle recalls. "Because we were growing quickly, we knew we needed to get more control over our processes."

Turning to a TMS

TAJ researched a number of solutions. Ultimately, it chose to partner with Seaford, Del.-based Trinity Logistics, a global freight solutions provider that offers truckload, LTL, intermodal, international, and other transportation services.

"We chose Trinity Logistics for a number of reasons," explains Denise Johnson, TAJ's chief financial officer. "One was its transportation management system (TMS). The fact that we could have a system at our fingertips to create freight quotes, enter orders, and manage shipments was a huge advantage. Trinity's TMS allows us to control carrier selection, transportation costs, and delivery scheduling."

TAJ and Trinity had previously worked together on a number of initiatives, including transportation procurement and management, supply chain consulting, and process efficiency improvements.

"TAJ started as a truckload business customer in 2009," says Scott Avery, senior project manager at Trinity Logistics. "We've worked to grow our relationship, and strive to serve TAJ as a trusted advisor, rather than just a business partner."

Trinity worked with TAJ over several months to ramp up services, putting solutions together for nine different modes, and setting up a temporary warehouse for West Coast distribution. To establish the new venture, Trinity analyzed TAJ's historical freight information and processes.

"We gathered three months' worth of shipment information for Trinity," says Johnson. "Then its analysts performed the research and presented their findings."

Armed with these insights, Trinity negotiated direct LTL pricing on TAJ's behalf, resulting in a 15.7-percent savings.

Putting the Pieces in Place

Next, Trinity led TAJ through implementing the TMS, and trained its customer service team to use the Web-based tool.

"Implementing the TMS was easy," says Kyle. "Trinity provided a quick training session, and that was all we needed. The TMS is accessible from anywhere with an Internet connection, and supplies all the tools we need to quote, schedule, and report on shipments."

The TMS has helped TAJ improve its customer service. "The biggest advantage is the ability to provide freight quotes immediately," Johnson says.

"TAJ works in large commercial markets, and it is essential that we deliver timely and cost-effective shipments to customer job sites nationwide," says Kyle. "For large retailers that constantly build new stores or update old ones, it is crucial we meet their tight construction schedules throughout the year. This means we not only stock their inventory, but deliver it on time, in good condition, and at the right price. Trinity Logistics has been an important partner in helping ensure we can efficiently serve our large-volume customers."

The TMS also allows TAJ to print its own bills of lading, and extract critical data to help gain better visibility into the business. "The ability to review information—such as how many truckload shipments we delivered, or how many extra services we billed for—enables us to make more informed business decisions," says Kyle.

Beyond the Basics

Trinity negotiated rates and extra services with TAJ's current carriers—sometimes securing value-added services at no additional charge. "Because it is so much larger than we are, Trinity can negotiate volume discounts," Johnson notes. "That has saved money for both TAJ and our customers."

Working with Trinity Logistics has allowed TAJ Flooring to cut its transportation spend, as well as operate more efficiently. For example, TAJ's major distribution center was previously located in Calhoun, Ga. But the company recently opened a new two-million-square-foot DC in Elgin, Ill. The change required moving most of the company's inventory—including flooring, planks, tiles, and sheet goods—more than 600 miles. Trinity facilitated that move.

"Trinity helped us find the right warehouse, determine how many truckloads we needed to complete the move, and negotiate a fair rate for more than 30 truckloads of material," says Kyle. "A Trinity representative met with us to strategize the move. He also helped me connect with racking vendors in the Elgin area to set up our new facility.

"Trinity Logistics has become our business partner," she adds. "Freight and logistics is a big component of our business, but the company has been instrumental in helping us accomplish other goals, too."

Johnson says TAJ will eventually integrate the Trinity TMS with its enterprise system. "Integrating the two systems will enable us to automatically input all the bills of lading and tracking information we now enter manually," she explains. "That efficiency will be critical for our customer service group as we grow, and orders and teams increase.

"Our inventory is not currently bar-coded, but when it is, we can scan and integrate inbound product into the system immediately," Johnson continues. "Making that information seamless will be critical."

TAJ Flooring's partnership with Trinity is paying off. In the first quarter following implementation of Trinity's solutions, TAJ posted its highest sales volume in its history, and handled those orders without adding any logistics personnel.

That's a record any company would be proud to stand on.