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At a glance:
Organization
Con–way
Location
Palo Alto, California
Industry
Supply Chain Management Services, Warehouse & Distribution Services
Challenges
Eliminate maverick spend, generate hard dollar savings through enforcing compliance, minimal upfront costs, automate the entire procure–to–pay cycle, find a solution flexible enough to meet the company′s diverse needs, ability to include both corporate and regional suppliers
Previous Solution
None
Ketera Solution
Procurement
Results with Ketera
Visibility into maverick spend, faster supplier enablement, NPV through hard dollar savings & enforced compliance, automated payment and reconciliation process |
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 We recognized an opportunity to enhance our purchasing process with state–of–the–art technology–without the up–front investment and ongoing resource commitment associated with the implementation of enterprise software.
– Mitch Platt, Contract Services, Con–way |
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The Challenge: A Flexible, Intuitive e–Procurement Solution
Headquartered in San Mateo, Calif., Con–way is a $4 billion company with more than 24,000 employees. Con–way is a leading provider of global supply chain solutions for a wide range of manufacturing, industrial, retail, and government customers.
Operating in 20 nations, Con–way handles freight transportation for many of its customers, as well as taking a larger role by assuming total management of the complex transportation and information networks required for companies to get all of the raw materials or finished goods they need. Con–way manages warehouses, completes final configuration, packages products, and distributes the finished goods with precision timing.
For Con–way, however, a gap existed between the promise and the reality of e–procurement. Until recently, Con–way relied on an in–house, legacy mainframe system for its procurement. The procurement system was driven by electronic data interchange (EDI) transactions that often required manual intervention by Con–way employees. By switching to Ketera, Con–way benefited from robust functionality and a set of innovative features that automated transactions with a large pool of suppliers.
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 automated procurement system altogether. The result? Maverick spending and limited visibility into savings opportunities.
As Con–way faced more pressure to find better deals and reduce its spend companywide, it sought out a fully automated e–procurement solution to replace its proprietary system.
The Solution: Ketera Procurement
After evaluating competing procurement solutions, Con–way chose Ketera Procurement.
"After doing research, we discovered it′d be very costly to buy the software, absorb the implementation costs, and handle the ongoing maintenance," said Mitch Plaat, 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, Ketera enables companies to achieve fast ROI by handling supplier enablement directly. Currently, 20 of Con–way′s suppliers are on the Ketera Procurement system.
And unlike competing products, Ketera offers a fully automated, on demand model for true e–procurement.
"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 Ketera, we have a fully automated procurement system that manages the entire procure–to–pay cycle," added Plaat.
Additionally, integration between Ketera Procurement 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 Ketera offers its automated procurement 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 the Ketera automated e–procurement system, Con–way has improved internal productivity, slashed maverick spend, and paved the path for other internal efficiencies. Notable results include the following:
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Maverick spend has dropped significantly. |
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The cost of processing invoices has fallen from $30 to $40 per invoice to merely $5 per order. |
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An automated procure–to–pay cycle means that Con–way can handle over 60,000 transactions per year, without the hassles or errors associated with manual routing. |
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With this automated e–procurement system, 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. |
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Today, 1,500 users access the e–procurement system. An easy–to–use, highly intuitive interface allows them to view and compare products before they buy, saving both time and money. |
"Previously, the data fields in the legacy system were so limited they didn’t allow for adequate product descriptions. As a result, buyers would frequently order the wrong items," said Plaat.
With Ketera, 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 Ketera system as very positive," added Plaat.
And since Ketera′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.
In the future, Con–way will continue leveraging Ketera Procurement as part of an ongoing effort to streamline procurement. Plaat noted that the company is also investigating how other Ketera solutions, such as Ketera Spend Analysis or Ketera Contract Management, might tie into the e–procurement system.
Overall, working with Ketera has been a boon for Con–way. "If we ask Ketera for enhancements, it takes only a quarter or two before we see them implemented. That′s not the case with larger companies, who often take years to respond to customer requests, if they respond at all. With Ketera, we feel we have a voice. I can call anyone at Ketera at anytime and know they’ll be responsive and flexible." |
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