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inbound transportation process was manually managed with spreadsheets utilizing inefficient processes and producing outdated information.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