Procurement Success Story
Con-way San Mateo, CA
“ With Rearden, we have a fully automated procurement system Industry
that manages the entire procure-to-pay cycle.”
Mitch Plaat 30,000
Con-way Shuts Down Maverick Spend With
The Challenge: A Flexible, Intuitive e-Procurement Solution Challenge
Con-way Inc. (NYSE:CNW) is a $4.3 billion freight transportation and logistics services Automate the procure-to-pay cycle, reduce
maverick spend, and accommodate a wide range
company headquartered in San Mateo, Calif. Con-way is an industry leader in the
transportation and logistics industry and delivers industry-leading services through
its primary operating companies of Con-way Freight, Con-way Truckload, and Menlo Solution
Worldwide Logistics. These operating units provide high-performance, day-definite Rearden Procure to Pay
less-than-truckload (LTL), full truckload and intermodal freight transportation; logistics,
warehousing and supply chain management services; and trailer manufacturing. Results
Automated payment and reconciliation processes;
Con-way Inc. and its subsidiaries operate from more than 440 operating locations across
fast, efficient supplier enablement; Significant
North America and in 18 countries across five continents.
reduction in maverick spend; and full visibility into
critical spend data
For Con-way, however, a gap existed between the promise and the reality of eProcurement.
Con-way relied on an in-house, legacy mainframe system for its procurement. The system
was driven by electronic data interchange (EDI) transactions that often required manual
intervention by Con-way employees.
Moreover, the combination of a mainframe “green screen,” lack of intuitive interface,
and limited data fields caused many Con-way buyers to purchase goods locally,
essentially bypassing the system altogether. The result? No visibility into spending
patterns, no control over maverick spending, hard to process orders for items with
complex configurations, lots of human error and high costs to maintain.
As Con-way faced more pressure to find better deals and reduce spend companywide,
it sought out a fully automated procurement solution to replace its proprietary system.
The Solution: Rearden “ One of our major decision factors was automation.
After evaluating competing solutions, Con-way chose Rearden Procure to Pay, catalog Automated ordering was just one part of the whole
picture. We also wanted to automate the invoicing
management and P-card reconciliation.
associated with procurement”
“After doing research, we discovered it’d be very costly to buy the software, absorb Mitch Plaat
the implementation costs, and handle the ongoing maintenance,” said Mitch Plaat, VP, Procurement
VP of Procurement with Con-way “We couldn’t cost-justify that investment. This concern
was coupled with the fact that, as we began talking to other companies that used
competitors solutions, these companies reported issues with supplier enablement.
Many of them were able to bring up only three or four suppliers, meaning they never
achieved their anticipated ROI.”
In contrast, Rearden enables companies to achieve fast ROI by handling supplier
enablement directly. Currently, over 600 of Con-way’s suppliers are transacting over
the Rearden Network.
“One of our major decision factors was automation. Automated ordering was just one
part of the whole picture. We also wanted to automate the invoicing associated
with procurement.” said Plaat. And while plenty of vendors offer front-end solutions
with many bells and whistles, few support critical back- end operations such as invoicing.
“With Rearden, we have a fully automated procurement system that manages the entire
procure-to-pay cycle,” added Plaat.
Additionally, integration between Rearden Procure to Pay and the company’s existing
American Express Corporate Purchasing Solution means that Con-way’s vendors receive
payment within three to five business days. On the back end, Con-way can review all
relevant invoicing data, and pinpoint discrepancies when/if they occur-but without
having to weed through every single transaction.
Moreover, since Rearden offers its application as a convenient, on-demand service,
companies pay as they go, eliminating the significant upfront, implementation and
maintenance costs associated with in-house systems.
The Result: Flexibility for Future Growth
With Rearden Commerce, Con-way has improved internal productivity, slashed maverick
spend, and paved the path for other internal efficiencies. Notable results include the following:
A Maverick spend has dropped significantly.
A The cost of processing invoices has fallen by 85% to $5 per invoice.
A An automated procure-to-pay cycle means that Con-way has handled nearly
2 million line items and over 380,000 purchase orders, without the hassles
or errors associated with manual routing.
A The ability to add suppliers regardless of their size, level of technological
sophistication, or location enables Con-way to tap the best suppliers and
the most competitive prices.
Today, over 3,000 users access the system. An easy-to-use, highly intuitive interface allows
them to view and compare products before they buy, saving both time and money.
With Rearden, users have familiar “shopping cart” functionality at their fingertips. “Having
an Amazon-type interface enables users to achieve more of what they want in less time.
That’s why our users view the Rearden system as very positive,” added Plaat.
And since Rearden’s ease-of-use has encouraged wide end-user adoption, Con-way can
collect more valuable spend data, which in turn, becomes the basis for detailed reports that
aid the company in trimming costs and finding new savings opportunities.