by David Baum, August 2014
Schneider trucks are a familiar sight on the highways of North America. With 11,000 big rigs deployed each day, most motorists have seen the familiar orange vehicles cruising by. But what distinguishes Schneider as one of the largest providers of transportation and logistics in the United States is not just its ability to move freight. Schneider is also an expert at moving information.
Schneider is the largest privately owned truckload carrier in North America. Headquartered in Green Bay, Wisconsin, the company maintains 21 regional operating centers in the United States, from which it provides truck, intermodal, brokerage, logistics, and related services to clients throughout the United States, Canada, Mexico, and China. “Our company has a lot of people and assets spread out over very large geographies,” says Chris Lofgren, CEO at Schneider. “Technology is the vehicle for connecting everybody back into one place so that we can make decisions and execute on our strategy.”
In addition to its well-established truckload business, Schneider’s intermodal business allows loads to be transferred from trucks to trains for long-haul moves, and then picked up again by a Schneider truck for final delivery. Schneider’s logistics division adds transport services, from seaport to railhead or to an inland distribution system, with optional port logistics and warehousing services. Schneider’s supply chain planning division assists with just-in-time manufacturing and materials delivery.
Judy Lemke, executive vice president and CIO at Schneider, describes the firm as a US$3 billion company with its most significant investments in people and rolling stock. But until recently, legacy enterprise technology was placing untenable limitations on those vital resources. “Our technology was more than 20 years old, and many of these systems were redundant and disconnected,” Lemke recalls. “Our processes and data were fragmented, and our productivity was constrained by both. We have the best people in the industry, yet the combination of these factors meant that our drivers and office associates didn’t have the tools they needed to do their jobs.”
People and asset inefficiency weighed on profits and growth, while also increasing costs. Concentration in too few industries exposed Schneider to seasonal economic swings. Management needed to diversify the business and build a technology platform that could improve operational efficiency to support domestic and international growth.
Embarking on such a massive undertaking takes vision and commitment. Having just celebrated the company’s 75th anniversary, the executive team shared a vision of leaving a legacy and ensuring that Schneider was a great, enduring organization for generations to come.
As more and more of Schneider’s customers saw the benefit of having real-time, round-the-clock visibility into their shipments and deliveries, Lofgren and other members of the executive team knew they needed modern, sophisticated, and integrated systems to enable their vision. In 2007 management enlisted Oracle’s help with a five-year transformation initiative known as Quest. Since the project began, it has influenced every facet of Schneider’s business. Every piece of hardware and software in Schneider’s environment has been replaced or replatformed. Accompanying these systems changes was a major re-engineering of Schneider’s business processes that has streamlined everything from sales, order entry, and customer service to transportation planning, finance, and HR.
The central tenet of Quest was simple: give drivers, customers, and business partners convenient access to the information and services they need, while improving back-office processes to drive operational efficiency and profitability. Lemke and the rest of the executive team realized they needed to standardize, simplify, and transform their core information systems. “We had multiple operational platforms tailored to different lines of business, with no standard quote-to-cash process,” Lemke admits. “Our technology was aging, and our processes, practices, and beliefs were not aligned with our future vision.”
Two-thirds of our associates are drivers, and their office is their truck.
Leadership at Schneider also wanted to make it easy for employees and customers to interact with relevant information through mobile devices, yet obtain consistent answers from one version of the data—available to everybody in the company’s ecosystem. But the most important element in execution is the driver. “Two-thirds of our associates are drivers, and their office is their truck,” says Lemke. “We needed to provide easy-to-use systems and data that allow them to deliver on the promise we make to our customer. Our objective was to seamlessly connect front office, execution, and back office. By making relevant data available in a timely manner, we make execution simpler, safer, and easier for our drivers.”
To deliver on this vision, Schneider’s IT team linked Oracle’s Siebel Customer Relationship Management (Siebel CRM) applications, Oracle Transportation Management, and Oracle E-Business Suite, as well as custom and third-party applications and standardized integrations with its customers and suppliers. A host of other services capitalize on social, mobile, and advanced analytics capabilities. At the heart of the initiative is a next-generation IT platform to manage the quote-to-cash process across the company’s various business units.
“From a business perspective, we literally changed every process and every job in the company,” says Lemke. “The change was on a magnitude we had never undertaken before.”
Schneider’s technical transformation has increased collaboration throughout the company via e-mail, instant messaging, and other types of in-vehicle communication. Machine-to-machine (M2M) and machine-to-human (M2H) interfaces accumulate massive amounts of data that are used to track deliveries while improving safety, performance, and efficiency.
In 2010, Schneider completed an upgrade to its entire fleet of more than 11,000 trucks, moving to a new platform that seamlessly connects freight scheduling, pickup, delivery, and driver hours/pay with back-office functions. New workflow processes provide drivers with step-by-step instructions on assignments. As work is completed, the system tracks each step to ensure that all functions are performed properly. If deviations from a plan occur, they can be corrected immediately so that issues aren’t amplified downstream.
“The system is designed to provide a whole host of services that make our drivers’ lives easier and safer, ensure excellent service and compliance to our customers’ specs, and verify efficient use of our assets,” says Shaleen Devgun, vice president of application development at Schneider.
The platform automatically determines the most efficient, lowest-cost method of data transport to communicate with each truck. “We also connected our in-cab technology to our back-end systems via web services so that we can communicate with our drivers as needed,” Devgun adds. “The net effect is near-real-time information sharing between our office associates, our back-office systems, and our driver fleet.”
Drivers interact with Schneider’s new information systems through visual and voice navigation, which simplifies exchanges between drivers and office associates. Embedded dashboards (based on Oracle Business Intelligence Enterprise Edition and Oracle WebCenter Portal pages) allow drivers to see their performance information, pay trends, and other analytical information from onboard computers in the cabs of their vehicles or from any internet browser. The in-cab technologies are integrated with new back-end processes governing order entry, transportation planning, transportation execution, and billing. Every aspect of truck performance and driver performance is measured, with complete tracking of each load to give customers visibility into their shipments.
“Our transportation network continually monitors thousands of loads, trucks, and drivers, with onboard technology and sensors,” explains Lemke. “We measure everything about the truck as well as driver behavior such as work assignments, vehicle performance, service metrics, and hours left to drive.”
For example, the system gathers engine control module data to calculate engine idle, driver’s shifting patterns, and acceleration and deceleration rates. Other sensors monitor fuel levels, tire pressure, roll stability, and lane departure/collision avoidance to improve safety, fuel economy, and emissions. Schneider has also placed tracking devices on containers so logistics personnel always know the status of the company’s 44,100 trailers and containers—empty or full, tethered or untethered. Other sensors reveal when each truck is moving and when it is at rest.
The Oracle transportation management system picks up this data from the vehicles, sequences the messages, and gives dispatchers visibility into each shipping order at any point in time. The data is then passed to back-office systems using standard web services created with Oracle SOA Suite. “Our Oracle integration layer transforms each message, performs appropriate logic, and then passes it via web services to our back-end systems as needed,” says Devgun.
Analyzing aggregate data allows office associates to detect patterns in driver behavior. The information can be used for future coaching and development, or immediate intervention. Onboard safety technology can alert the driver and even slow the vehicle if there is an incident that warrants immediate action.
Lemke says that Schneider now has as much technology in the trucks as it has in the data centers, with vehicles connected to the back-office systems and data playing a critical role in its business strategy. “As soon as the drivers turn on their vehicles, their work assignments are pushed to them,” she says. “We can estimate their expected time of arrival, which helps us to better manage our entire operation because we can manage route and driver efficiency with much greater precision.”
Having real-time information on driver utilization, load drop-off and pickup times, and vehicle performance helps Schneider improve service levels and comply with industry regulations. Predictive analytics assist with planning for future loads and orders. This same technology helps the company meet regulatory requirements.
|Number of times per day Schneider’s information systems match tractors, trailers, drivers, and customer freight—that’s a rate of 25 new loads booked every minute|
|Number of miles Schneider drivers travel every day—enough to circle the globe 280 times|
For example, the US Department of Transportation requires electronic onboard recorders to log driver hours to make sure they don’t exceed designated limits. In addition, the Federal Motor Carrier Safety Administration, which regulates the trucking industry in the US, requires carriers to report all accidents and infractions to the government. Schneider’s real-time monitoring systems not only improve efficiency but also minimize accidents, which keeps its Compliance, Safety, Accountability (CSA) score higher. These are essential metrics for any trucking company, because poor scores can dissuade potential customers from working with a carrier.
“Because CSA scores are publicly available, companies that have good scores achieve a better value proposition in the marketplace,” says Lofgren. “However, we have always believed in sharing this information, because it’s who we are. A core value is something you do when nobody is looking or when no one will pay you for it, because it’s what you believe in.”
Driver metrics also help the Schneider team track the hours each person can drive and maximize the efficiency of the company by making sure that the movement of each load is optimized along with the driver activities. Keeping drivers continually apprised of this status especially helps with employee retention—a big factor in an industry with notoriously high turnover.
“Schneider continually measures employee performance and vehicle performance,” says Lemke. “Each driver receives a scorecard that shows how they are doing with respect to miles driven, mpg performance, driving quality, idling time, and lots of other variables—day-to-day and on a real-time basis.”
Lofgren believes that real-time engagement with employees is the basis for managing behavioral change. Drivers can use data to “self-regulate”—and in the future, supervisors will be able to review collected data to identify performance trends and help with professional development. He sees this as a “new paradigm shift in management” that involves not just holding people accountable but allowing them to be accountable.
“Employee satisfaction comes through giving people feedback and information about how they are performing relative to others and then creating a process to help them improve their performance,” Lofgren explains. “The most magical thing is that people will raise their standard of performance generally higher than you might set it for them.”
This philosophy of personal accountability applies to workers throughout the company, from customer service representatives to logistics engineers. “We give them insight so they know the right choices to make and the right things to do,” adds Lofgren. “We have broadened people’s roles and given them the ability to create customer value, but at the same time create value for the company. Throughout the Quest project, we have added capabilities that we never had before. It has taken us to a place that, in my mind, is better than we even imagined.”
We have broadened people’s roles and given them the ability to create customer value.
The Quest initiative has transformed key functions ranging from quote and order management to transportation planning, fleet operations, human resource management, and financial management. Lemke says the success of the project required a clear vision, alignment, executive engagement, and the sustained hard work of every associate in the company. To ensure success, before the program was even launched management took the critical step of not only assigning the company’s best IT talent but of committing six business leaders to the program.
“We took key business and functional leaders out of their full-time jobs and asked them to take the lead as a core team on this very important initiative,” she says. “Each one of these people reported to a C-level executive. They were responsible for building enterprise capabilities, processes, and systems by not only representing their individual areas of the business, but by knitting those requirements together into an enterprise capability. Together, IT and this core team were tasked with ensuring that we achieved the ambitious objectives that we set out to achieve.”
Two years into this massive project the US entered the Great Recession. The executive stakeholders found themselves in a precarious situation. Although they had made great progress, they were still a long way from deploying their new information systems. They had to decide whether to push ahead in the face of economic uncertainty or shelve the project for another day.
“We were at the deepest part of the stream, trying to get across when the current was the toughest, and we couldn’t see if there was land on the other side,” says Lemke. “But we had confidence in ourselves, and confidence in our providers, that we were going to get there and that it was a worthwhile place to be.” What was only a vision in 2007 is now a reality. “What often felt like mission impossible is now mission accomplished,” adds Lemke. “We have not only realized the goals we set out to achieve but have surpassed the benefits we anticipated going in. The foundation laid over those five years of transformation has now become an outstanding platform for current operations and a springboard to even greater possibilities in the future.”
David Baum is a freelance writer who specializes in the intersection of science, technology, and culture.