Web-Based Service Keeps ITT Freight Moving

Deck: ITT Industries' customers and freight carriers benefit from online billing and tracking information

ITT Transportation and Distribution Services (TDS), based in Palm Coast, Fla., is the logistics and purchasing organization for ITT Industries. A corporate staff function operating on a shared-services basis, TDS' objective is to reduce the costs of purchasing and distribution for ITT Industries' business units and select third-party clients.

In addition to data collection and reporting; carrier contract management and distribution analysis, one of the key services provided by TDS is a freight bill processing, auditing and payment system, developed in-house using application development software from Lansa, Inc. (Oak Brook, Ill.)--running on an AS/400.

According to Tom Restaino, manager of information technology and operations, TDS processes and pays 1.5 million freight bills annually, a volume that spurs a great many calls from customers and carriers with questions about payment or payment status.

Restaino saw that Web enabling the billing information would allow many of those callers to answer many of their own questions. "We wanted to use our Web site interactively to provide our customers and carriers the ability, in real-time, to access our data to find out whether a freight bill was paid without making a phone call and waiting for a person to figure it out for them," he says.

Working with consultants Rippe and Kingston (Cincinnati), plans for the project were finalized during the last quarter of 1998. "We considered a number of tools, including Lansa for the Web," Restaino says. "We found that Lansa did two basic things for us. It provided all the Web functionality we wanted, and it integrated with our existing production applications and databases so we wouldn't have to replicate data across different boxes." In addition, since TDS' in-house applications had been developed using Lansa tools, it ensured the reusability of that code.

TDS acquired an AS/400e Model 170 as a Web server and integrated it with the legacy applications running on the back end AS/400 Model 620. The Web-based freight payment application went live in February 1999.

Now, Restaino says, customers can access all their logistical information from the TDS Web site any time, any day. TDS' freight payment and history databases are available, so a carrier can find out if a freight bill has been paid, the check number it was paid on and whether other bills have been paid on the same check.

From the Web site, customers can also link back to specific carriers to track shipments. "If a customer hasn't received a package delivered by UPS, for example, typically they would have to call UPS or find the UPS Web site," Restaino says. "On one page of our Web site we consolidated the hyperlinks to the thirty or forty core carriers used by ITT Industries in North America. If somebody wants a tracking or tracing capability, they can log on to our Web site, go to the tracking and tracing page, find the carrier they're looking for and go immediately to the carrier's Web site."

The payment approval process also benefited from the new Web-based system. Normally, Restaino says, TDS processes, audits and pays each freight bill without customer intervention. However, if the bill has certain characteristics, a high value transaction for instance, or if it's a third-party bill, to be paid by someone other than the receiving company, customers will generally want to see it before TDS pays it.

"Before the Web site we would fax it to them for approval, they would fax it back and we would update the system," Restaino says. "Now we send them a daily e-mail listing everything pending their approval. They can approve or disapprove those freight bills online at the TDS Web site. It has eliminated about twelve hundred faxes per week."

Customer service, rather than hard dollar savings, was TDS' primary intention says Restaino--thus the success of the project is difficult to measure in terms of ROI. Nevertheless, there have been monetary benefits for TDS as well. By automating the bill approval process, for example, he estimates savings in fax costs of about $500 per week.

A greater benefit has been reduction in the volume of daily correspondence between TDS and its customers and carriers. Although staff has not been reduced as a result, personnel have been reassigned to new, more productive areas. Additionally, from a development perspective, because the code already developed with Lansa was reusable, it avoided the costs associated with redeveloping the application from scratch.

Looking ahead, Restaino expects to add an online querying capability for customers by the first quarter of 2000. "A lot of our customers use the data from the freight billing system to determine how well they are controlling their own logistics operations," he says. "Our own distribution analysts have used querying capability to look at customers' traffic patterns to see how we can help them reduce their logistics costs. We plan to make that capability available to customers over the Web."

Another functional enhancement will be a least cost routing service. "If someone has product to move and doesn't know how to move it, they will be able to come to our Web site, key in some basic information, and we'll tell them how to route it, what carrier to use and how much it will cost," Restaino says.

So far, feedback has been enthusiastic; an indication of what Restaino hopes will be a secondary benefit. "The carriers love it," he says, "and hopefully this will be a marketing advantage in the long run. If they're asked to recommend a freight payment company, we're hoping they'll recommend us. We're seeing some of that already and my sense is that's due, at least in part, to our current investment in technology."