The nationwide lease-to-own company started using Cloud Logistics’ transportation management system over a year ago due to its network complexity, and has reaped the benefits of reporting tools and faster tendering.
Mike Bingham sheepishly admits that an implementation of a transportation management system (TMS) at his company was a long time in coming.
“It was pretty basic,” he said of his company’s transportation processes. “Every load was tendered by email. You can continue to do it that way, but you’ll continue to hire staff.”
Bingham, it should be noted, does not oversee a small transportation department. He’s the logistics manager at Aaron’s, Inc., a major North American lease-to-own company with more than 1,9500 stores, 600 franchisees, 12,000 employees and $3 billion in revenues.
More pertinent to Bingham’s needs, Aaron’s operates out of 17 fulfillment centers across North America, coordinating the flow of furniture, electronics and other household goods to all those outlets.
“The main reason we had to do something is we don’t ship to five or six major hubs,” he said in an interview with American Shipper. “We ship to 17 major hubs. It’s challenging to move that much inventory to 17 different locations, and it was getting out of hand for us as we continued to grow. We came to a crossroads – either we needed to hire staff or use technology. We chose technology.”
Aaron’s ended up deploying a TMS from Cloud Logistics, an Atlanta-based software provider that focuses on cost-effective, fast-to-implement and intuitive solutions for transportation management.
The system helps Aaron’s manage its domestic freight spend and management, which accounts for about a quarter of its total $22 million in freight spend. The bulk of the spend is on ocean freight, but Aaron’s doesn’t use the system for that.
Of course, the easy-to-implement part is all relative, Bingham said.
“If a company is a lot smaller than us and doesn’t do thousands of shipments, I could see someone up and running pretty quick,” he said. “But it’s not going to be 30 days if you’re like us.”
That said, Aaron’s had booked roughly 40 percent of its less-than-truckload (LTL) and truckload shipments within 45 days of implementation as of May 2015.
“All our suppliers, all our fulfillment centers had to be (integrated),” he said. “There’s a lot of data entry upfront that has to be done,” as Aaron’s network includes supplier-to-DC and supplier direct-to-store shipments.
“With the TMS, we can book loads in 40 seconds,” he said. “It’s a whole different ballgame for us now. On top of all of that, the main thing for me is I have customized reporting. I can go to the reports menu and at a glance look at volume of shipments per month, updated each day. Reporting by lane, by carrier, KPI (key performance indicators) reporting on all my carriers, so I can measure their service.”
Bingham said the reporting is not just for monitoring. His senior planning analyst, who puts together the annual carrier request for proposal document for Aaron’s, pulls the report data into her decision-making matrix.
“She’ll plug the data in for the last 12 months, move that into Excel, and then move it into a template that goes out to all our carriers,” he said. “Our RPF within the Cloud system was pretty intensive because of the number of lanes and DCs. On this next bid, we’ll have a few more enhancements that Cloud Logistics has in progress.”
When asked whether the Cloud system might give Aaron’s more flexibility to shorten procurement cycles, Bingham admitted that pre-TMS, the company’s procurement exercise was “cumbersome” and that the system gives it more ability to adapt to new dynamics: “What we tell our carriers is any time you want to gain market share and reduce prices, call us up and we can update the TMS within seconds.”
Bingham spoke most glowingly about the way the reporting tools sharpened his ability to see his company’s transportation activities.
“The main function of the KPI reporting is awareness – the carriers are aware that I know what’s going on,” he said.
That also includes reporting on the direction of the company, not just its carriers. He noted, for instance, that the TMS allows him to track the number of LTL shipments devoted to Aaron’s growing e-commerce business, an indicator of growth in that area that would influence future procurement characteristics.
“One of my goals is to increase intermodal, to find more ways to use it when it fits for us,” he said. “I get two different intermodal reports that shows our volume by carrier, lane, and date. That helps me because every time I see an intermodal load booked, that produces a lot of savings.”
Bingham admitted that carriers have to get used to the system since they’re required to log into Aaron’s Cloud Logistics portal, unless the carrier has EDI capability. The company relies heavily on a core group of about 12 major carriers.
“The hardest part of the equation is getting carriers updated,” he said.
A business requirement for carriers to work with Aaron’s is getting an appointment with the fulfillment center scheduled within 72 hours of accepting a load, a process that the TMS helps Aaron’s track better because it forces carrier planners to use the portal to update those milestones. Stressing this, Bingham said, helps Aaron’s cut down on communication breakdowns where drivers being late would result in wasted labor at the fulfillment center.
“We require the carrier’s planners to do four things – accept nominated tenders, reach out to the shipper as well as the fulfillment center to set appointments, and finalize the delivery,” he said. “During this process planners and dispatchers are able to provide updates via a program called ‘shared notes’ where any problems (like a flat tire), concerns or issues with the load can be updated. Our traffic analyst has a continuously updated streaming screen that shows shows comments or pertinent issues and gives us real time load visibility. My staff love opening it up every morning, checking our screens, checking our share notes.”
TMS takes Aaron’s from ‘basic’ to modern state
