March 23 2009 02:50 PM

In most instances, when a company invests in technology, the owners, managers and IT staff expect it to be around and supported for years to come. Sometimes even with the most stable of solutions, it just doesn't work out that way.

During the fast and furious pace of business five years ago, Kuehne + Nagel faced a critical situation. They had to replace their newly obsolete, six year old shipping system due to an acquisition. With hundreds of customers reliant on the system their business was now at risk. 

Kuehne + Nagel currently supports 3 WMS (warehouse management systems) and needed to search for a system that can easily extract the data and import it into tables. One of the most important aspects to serving their customers is the ASN, Advanced Shipping Notice. Large companies such as Target, Walmart and Walgreens expect the data collection and the label creation process to be accurate every time. If not, Kuehne + Nagel will be fined and the goods are shipped back for proper labeling. This mistake can cost their entire profit margin and then some. 

The logistics company also maintains 20+ locations around the United States where the individual facilities each focus on a set of customers. Each location required a server and anywhere from one to 20 workstations resulting in a significant amount of time and cost for maintenance. It would take the IT department weeks to implement updates, rate changes, applications or system upgrades. 

Finding a Flexible Partner
Kuehne + Nagel began the search. Because the company employs highly experienced IT talent with shipping and logistics expertise, they required participating vendors to build a working prototype that includes a proven shipping technology. Many shipping software companies were interested in acquiring their business, but few were equipped for the task.

Two primary goals of the project were to deliver the required ASN functionality, and to identify new and improved ways to control cost and time associated with maintaining system at the 20+ locations.

The company that developed a usable prototype with an established shipping technology, along with a talented professional services team of experienced developers, and reduced costs with a centralized system was ADSI (Advanced Distribution Solutions Inc.), Zebra with ConnectShip's shipping solution. 

In Control of the ASN
What became clear to Kuehne + Nagel was that their core feature, ASN, needed to be developed and added to the shipping system. ADSI took on the enormous task that other providers would not: build and deliver a state-of-the-art, ASN module which creates ASN data and labels. Not only did ADSI deliver the ASN solution, but realized the importance of flexibility for the Kuehne + Nagel customers. 

Kuehne + Nagel is constantly adding customers, changing specifications and managing the requirements for labels as chargebacks is an expensive issue. If Kuehne + Nagel continued under the previous system, the Company would need to rely on the vendor to recode the system which requires system downtime for approximately an hour. ADSI provides full functionality, customer controlled modifications and is straightforward to maintain. 

The new shipping system streamlined the process and eliminated steps within the operation. Naturally, this solidified the partnership as the other competing vendors wanted to maintain control.

Islands Come Together for a Centralized Solution 
When the company used the previous shipping system, any upgrades, maintenance and rate changes were completed one facility at a time. Each of the 20+ facilities housed a server and up to 20 workstations. With the postal service updates occurring in the summer, UPS and FedEx in January, and patches to the software occurring every two months, the IT staff had time to do little else. The shipping operation at each of these locations was halted until the IT staff's work was complete. 
The ADSI solution with embedded ConnectShip technology enabled Kuehne + Nagle to centralize the solution to one location eliminating the need for 20+ additional servers. In addition, the Company also was able to purchase a corporate license instead of individual licenses for the server and workstation at each location. The cost reduction was stunning with approximately $500,000 in savings. This doesn't include the reduction of maintenance costs, which also mounts into the thousands.

With a centralized system, it now takes just a single morning to perform updates, upgrades, and rate changes for 20+ sites which occur on a Saturday allowing the business operations to continue without interruption. 

Kuehne + Nagel's Happy Customers
Because of the flexibility in the system, the Kuehne + Nagel IT staff offers flexibility in its solution like never before. The Company regularly offers customized solutions to its 500+ customers around the globe, each of whom require the data to be treated a little differently than the next. 

Most of the customizations come with the ASN's data. However, one of their customers needed •returns' functionality built into the system as well as a shipping label, contents label for the outbound shipment, contents label for the return shipment and an ASN label. The time sensitive, customer requirement enabled Kuehne + Nagel to secure the business and offer the new functionality to prospective and existing customers.

An Added Benefit
Kuehne + Nagel received a bonus from the project. The Company always searches for the best price in hardware. Most suppliers offered the hardware solutions at either the same or very similar prices. That was the expectation when the IT staff asked ADSI for their pricing. However what came back surprised everyone: A 30% to 40% lower cost of purchase. ADSI received that business too. 

Continued Efforts
With the passing of five years, the solution of ADSI, Zebra and ConnectShip still stands strong delivering longevity that matches the 119 year old company. Most of the development continues to be completed in-house at Kuehne + Nagel, however some help from ADSI's professional services expertise is essential. Since shipping systems is a core competency, ADSI brings the in-depth knowledge to the project. For instance, ADSI regularly works with the Kuehne + Nagel team on carrier related issues since they have extensive experience working with their data. Otherwise, when questions arise, they are brought to ADSI's support staff, which turns around any fixes or changes in 24 hours. Now that's service.

Since its founding in 1890 Kuehne + Nagel has grown to become the world's leading logistics providers with 850 offices in over 100 countries with more than 54,000 employees. With its strong IT systems and high value customer service, Kuehne + Nagel serves the high demanding industries of aviation, consumer goods, hotel, pharmaceutical, industrial, oil and gas as well as retail.