Ace Hardware Leverages LeanTMS® to Reduce Freight Spend

Client Profile

Founded in Chicago in 1924, Ace Hardware Corporation is America’s neighborhood hardware retailer, with over 4,000 stores in 50 US states and 60 countries. Ace Hardware stores are supported by 14 world-class distribution centers and six freight consolidation centers, supplying over 65,000 products. Ace has annual sales of over $3 billion.

The Ace Hardware transportation network consists of 30,000 truckload OTR shipments, 8,000 intermodal shipments, 17,000 Ace fleet shipments, and 2,700 lanes. Ace spends about $50 million in truckload transportation costs annually.

Business Process and Problem Definition

60 to 65% of Ace Hardware’s shipments move freight collect, meaning Ace pays for the moves. Ace Hardware’s inbound transportation process was manually managed with spreadsheets utilizing inefficient processes and producing outdated information. Ace wanted better control of inbound transportation to automate processes, gain efficiencies, understand costs and identify areas for improvement.

Ace was in the process of implementing an enterprise resource planning (ERP) solution expected to take three to four years and consume many IT resources. The company recognized the potential ROI for a transportation management system and decided to slate the TMS project in front of the ERP implementation, with the goal of finding a TMS requiring limited IT resources.

Ace established a list of goals for a transportation management system:

  • Gain visibility into true freight costs
  • Identify and manage inbound freight
  • Centralize freight payment
  • Obtain business intelligence to assess carrier performance
  • Reduce freight costs

ACE HARDWARE CONFIRMED LeanLogistics ASSURANCE BY SAVING $18 MILLION IN TRANSPORTATION SPEND SINCE LeanTMS® IMPLEMENTATION

Process Improvement – SaaS Solution

Ace considered several TMS vendors and chose LeanLogistics® based on superior functionality, strong transportation expertise of the team and ease of implementation so the company could realize benefits quickly. LeanTMS® transmits Ace orders to suppliers, selects and tenders to the lowest cost or best match carrier. The carrier accepts the load through LeanTMS where the supplier has visibility to carrier acceptance and schedules an appointment. LeanTMS gives Ace Hardware visibility to order and load statuses while providing information on true transportation costs.

“LeanTMS runs our daily operations and we harvest the visibility of real-time information to gain better control of transportation performance and cost,” said the Director of Transportation for Ace Hardware. “LeanTMS gives us the business intelligence and analytics to structure our carrier procurement by providing better information to carriers so they can submit rates and service proposals based on actual transportation information.”

With LeanLogistics technologies, Ace Hardware gains many capabilities, including:

  • Automating transportation tasks, including planning, execution and settlement
  • Using LeanInbound® to manage inbound shipments for greater freight savings
  • Optimizing freight routing
  • Using LeanSource® procurement application to automate spot market RFPs
  • Utilizing LeanDex®, transportation lane index, to compare freight costs to market
  • Gaining visibility of orders and shipment status

Value Delivered

Ace Hardware and LeanLogistics’ relationship continues to evolve to include Ace’s use of LeanLogistics solutions, such as LeanTMS, LeanSource®, LeanDex®, LeanInbound® and Managed Procurement Services. Ace estimates that LeanLogistics saved the company over $18 million in transportation costs since implementation. The savings come from process efficiencies, such as selecting the right carriers and right modes. In addition, savings come from Managed Procurement Services that use real time market information to negotiate better agreements with carriers.

LeanLogistics provides Ace visibility and benchmarking data that helps improve lead-time visibility and reduce inventory levels at distribution centers. Prior to LeanLogistics, Ace experienced low lead-time dependability from suppliers, thus requiring higher levels of safety stock. With the business intelligence Ace gains from LeanTMS, the company identified problem areas that lead to reduced inventory, increased inventory turns and improved lead-time dependability.

The benefits Ace Hardware continues to receive from LeanLogistics include:

Improved Real-Time Visibility: Based on the true SaaS model leveraged by LeanTMS, Ace has up-to-date information on orders, shipment status, carrier performance and cost analysis.

Reduced Safety Stock Levels: Ace utilized LeanTMS to tightly manage transportation, leading to a 15% inventory reduction and 25% increase in inventory turns.

Increased Freight Bill Savings: With automated routing, auditing and comparing of lane rates, Ace saved an average of 12.9% per annual freight bill.

Reduced Lead Time From Production to Receipt: Business intelligence and data analysis from LeanTMS facilitates supplier accountability, which decreased lead time by two days.

Download the “Ace Hardware Leverages LeanTMS® to Reduce Freight Spend” case study.