Building a Bridge to Continuous Improvement
Tired of relying on e-mail blasts to place freight, L.B. Foster ups its game with a third-party solution that has transformed the enterprise.
The good news: L.B. Foster was rapidly growing. The bad news: that growth made it a struggle to keep up with transportation and logistics demands. By turning to a third-party logistics provider, L.B. Foster was able to implement an enterprise logistics solution that can handle as much freight as the company can enter—quickly and efficiently.
Pittsburgh-based L.B. Foster supplies transportation, construction, utility, energy, recreation, and agriculture markets with materials to build and maintain infrastructure. As a manufacturer, fabricator, and distributor of quality materials, the company is committed to meeting customer requirements and increasing their satisfaction through continual product and service improvements. This drive toward improvement has had a dynamic effect on L.B. Foster's logistics and transportation processes.
"In 2009, we identified a pressing need to improve the way we handled freight," says Arnie McAuley, material services manager at L.B. Foster. The company was growing rapidly, but was using methods that didn't allow it to easily keep up with the demand to place freight. It didn't have an easy way to secure contracts with carriers other than running inquiries on a homegrown system with a rudimentary rate structure driving the database.
After interviewing five logistics solution providers, L.B. Foster settled on Hickory, N.C.-based third-party logistics provider Transportation Insight to address its freight challenges, and improve logistics processes across the organization. Since then, the company's logistics and transportation processes have been transformed.
In the past, L.B. Foster used an email blast system it created to book freight. The company would send inquiries to carriers, who responded one at a time. This process was time-consuming and inefficient, and complicated by the fact that the organization had many types of decentralized activities in the field. Some used L.B. Foster's centralized transportation group and its homegrown system, but others did not. Utilization was elective. "We didn't have a standard way of booking freight," says McAuley.
Enter Transportation Insight, whose bundled logistics solution went beyond standard transportation management systems (TMS) to include carrier sourcing, freight bill payment and audit, and business intelligence. This enterprise logistics solution helped transform L.B. Foster from a company struggling to place freight to one that can place as much as it needs quickly and efficiently.
L.B. Foster uses the Transportation Insight solution to manage two types of freight: flatbed and less-than-truckload (LTL).
- Flatbed. The company brought a group of carriers with them to the Transportation Insight solution that are maintained, added, or deleted based on performance, and posted on L.B. Foster's bid board. The company reviews bids and places freight based on this review. Carriers are tendered notice, then accept or reject the job.
- LTL. Transportation Insight negotiated contracted rates with a group of common carriers. That provides L.B. Foster with a standard process to contract LTL. The company checks options based on lane, pricing rank, and the number of days it should take to move a shipment. The selection is made and awarded electronically to the carrier. From that point, the shipment follows the same process as flatbed freight from BOL through notifications.
Once a job is accepted, the system automatically sends the shipper a bill of lading (BOL). L.B. Foster receives automatic notifications that the bid has been booked, when the shipment is in transit, and when it's delivered. This visibility across the logistics chain did not exist before. "The Transportation Insight system keeps us in contact with a group of carriers in real time," says McAuley.
Because of the scale and nature of its operations, L.B. Foster's logistics network is different from the majority of companies transporting goods. "Our freight is unique because we have no lanes," notes McAuley. "We have few repeat orders and destinations. We can ship to and from anywhere in the country, wherever a contractor is working."
The company can't operate a typical contract-pricing equation, where a system can connect point A to point B simply by referencing the contracted rate and the carrier to use. Consequently, L.B. Foster needed an application that afforded user-friendly, highly scalable, tactical sourcing methodologies in a TMS environment.
"L.B. Foster's solution is primarily centered on bid-board activities—almost a reverse auction—where we broadcast loads to a select group of carriers and brokers that Transportation Insight vetted and contracted on our behalf," explains McAuley.
Also, the company can now process more loads than it could with the old system. "We can place as many loads as we can enter," says McAuley. "There's no limit to processing flatbed and LTL loads."
"The solution also generates bills of lading, which we formerly did manually outside the system," he adds. "It also allows us to make one monthly payment to Transportation Insight, rather than paying all carriers individually (Transportation Insight pays the individual carriers). The solution consolidated all these different activities into one platform."
Automating and simplifying payments replaced a time-intensive and complicated manual process. The new solution saves time, labor, and capital while allowing better utilization of assets as the company continues to grow.
Truckloads of Benefits
The bundled solution offers several benefits to L.B. Foster. First is greater control over logistics providers. L.B. Foster no longer has to deal with the uncertainty introduced by field personnel electing to use carriers that may not have been vetted from a risk, performance, and liability perspective.
Second, the solution offers competitive pricing through a more repeatable, scalable, and reliable process.
Third, customer service has improved because shipment pickup and delivery occurs more predictably. Just as important, those who have a stake in the logistics process receive proactive notification. Creating an environment where logistics information is more visible to shippers, vendors, and customers—internal and external—is a key advantage over the legacy system.
Fourth, the solution enables improved decision-making. Business intelligence capabilities drive better decision-making by providing more accurate and less latent information. L.B. Foster receives detailed data on carriers and their performance. "We get a daily status report on loads in the system," notes McAuley. "We didn't have these metrics before."
Implement Now, Pay Later
McAuley was attracted to Transportation Insight for several reasons. First, the 3PL didn't charge until the new system was up and running. "Many providers wanted money up front, before the system went live," he says. "Transportation Insight was willing to invest time and money in us to make sure its system was right for us."
A second attraction was Transportation Insight's understanding of Lean processes. "I asked all potential providers what they could do to help make us a Lean enterprise, and Transportation Insight was the only one that answered in terms of process improvements," says McAuley. "They know what continuous improvement is all about."
By examining a company's processes from vendor to customer, Transportation Insight works to create a value stream map of the extended supply chain's current and future state. By identifying and removing non-value-added elements, companies gain efficiencies on the production floor, in the office, on the shipping docks, and throughout the enterprise.
According to McAuley, the implementation went smoothly. Transportation Insight spent considerable time with L.B. Foster on site to gain a clear understanding of goals, and the companies held weekly implementation meetings as the project developed. When Transportation Insight was ready to take the solution live, it sent staff to the L.B. Foster site to work collaboratively through the transition.
"The difference between Transportation Insight and other providers comes down to people," says McAuley. "Their people have grown and changed over the five years since we implemented the solution, but they've consistently looked at our business with an eye toward helping us improve. They rose to that challenge."
One area of current growth for L.B. Foster is in global markets, with international shipping demands increasing considerably. The capabilities for international shipping have always been part of the enterprise solution, but McAuley emphasizes that Transportation Insight has been responsive to emerging needs. "We constantly communicate what we need the system to do, or changes we'd like to make," he says.
Housing data in a central place—and having the resources to analyze it—is something L.B. Foster couldn't do before implementing the bundled Transportation Insight solution. Now, using the data for decision support helps them better respond to future needs.
"The system is an extension of our focus on being a lean enterprise," notes McAuley. "The Transportation Insight solution enables our processes to be more efficient and more responsive to change, allowing us to handle greater volume without adding headcount.
"We have improved carrier performance, loads and cost analysis, and flatbed and LTL shipping since we partnered with Transportation Insight," he adds. "We expect our processes to continue to improve as we move forward."