J.B. Hunt transforms operations to reduce costs and increase revenue

Published on 13-Apr-2010

Validated on 12 Jun 2013

"The success of the HAWK Power Detention System has demonstrated the value and potential of IBM software. As a result, other divisions within the company are exploring advanced case management techniques as a way to remove non-value-added work and add dollars to the bottom line." - Tarek Taha, Engineering Manager, J.B. Hunt

Customer:
J. B. Hunt

Industry:
Travel & Transportation

Deployment country:
United States

Solution:
Business Process Management (BPM), Enterprise Content Management, Leveraging Information

Overview

Using advanced techniques, IBM solutions with case management capabilities are helping J.B. Hunt achieve its goal to transform the way driver detention events are captured, administered and invoiced so that staff can optimize revenue from each delivery.

Business need:
Manually managing tens of thousands of documents increased operational costs and affected staff’s ability to accurately bill clients for services.

Solution:
Using advanced techniques, IBM solutions with case management capabilities enable staff to approach each delivery as a distinct case and track, assess and bill delays and other exceptions based on the terms of each client’s contracts.

Benefits:
Anticipated $1 million in revenue with real-time visibility to delay information; better driver utilization; 83 percent reduction in staffing requirements for billing operations

Case Study

J.B. Hunt, one of the largest transportation logistics companies in North America, focuses on the safe and reliable transport of full truckload freight to a diverse group of customers throughout the continental United States, Canada and Mexico.

The challenges of manually managing tens of thousands of documents associated with the daily shipment transactions included an increasing amount of physical space devoted to document storage; delays in finding and accessing specific documents held in storage; risk of misplacing or losing a document; as well as costs and delays in making and forwarding copies. In 2000, J.B. Hunt made an initial investment in IBM software to address these problems.

Based on the success of the initial application, J.B. Hunt applied its experience and IBM advanced case management strategies to address more complex business challenges, attacking three problematic areas—billing, dray carrier management and driver delay management.

Billing
The existing billing process was complex, labor intensive and time consuming. Data was being entered manually. Customer service agreements required invoices to be generated using different rules for each customer, yet there were no means to centralize and coordinate the numerous billing rules. It became increasingly difficult to produce timely and accurate billing at month’s end, requiring additional customer service efforts. Billing issues threatened to affect J.B. Hunt’s customer service reputation and cash flow.

Dray carrier management
J.B. Hunt often relies on independent carriers to transport rail containers to the nearest railway terminal. Coordinating shipment assignments and payments for independent carriers—known as dray carrier management—was primarily a manual processes, dependent upon knowledgeable staff to coordinate hundreds of independent carriers transporting thousands of containers annually. J.B. Hunt realized IBM software could be leveraged to significantly improve dray carrier management by replacing manual work with automated processes.

Driver delays
Upon pickup or delivery, carriers allot a certain amount of wait time—typically one to three hours, depending on the service-level contract. When a driver is detained longer than the allotted time, charges accrue. Tracking and reporting “detention” time was primarily the responsibility of administrative staff. In reality, accurate tracking and reporting was difficult to obtain. When delays were reported, the process of accurately applying these customer charges required extensive searches through data-intensive mainframe screens, e-mail documents and printed customer agreements. Legitimate charges were sometimes missed due to interpretation errors, time constraints and volumes of information requiring manual processing.

Moving to an advanced case management model
J.B. Hunt worked with IBM to implement advanced case management strategies so it could approach each delivery as a distinct case and track, assess and bill delays and other exceptions based on the terms of each client’s contracts. During phase one, J.B. Hunt initially applied third party capture software along with IBM imaging and business process management software to deal effectively with the high volumes of documents—bills of lading, delivery receipts, claims documents, accounts receivable, accounts payable, and driver logs—associated with customer transactions. The solution reduced, if not eliminated, the need for file cabinet storage, prevented the loss of documents, allowed employees to quickly and securely access the necessary documents electronically, streamlined document processing, and set a precedent for the business value of IBM software.

J.B. Hunt applied IBM software to improve its billing process by eliminating manual processes, establishing a central set of billing rules to improve billing accuracy, and identifying and rectifying any bottlenecks in the automated process.

J.B. Hunt then focused on improving dray carrier management by using the solution to automatically process work assignments and carrier payments. The solution effectively eliminated the time-consuming, manual task of scheduling carriers and confirming deliveries previously coordinated by J.B. Hunt staff and transferred these responsibilities to the individual carriers who could remotely access the Web-based portal, accept or reject pickup or delivery assignments and submit paperwork required for payment. The carrier electronically sends in paperwork once a job is complete, automatically triggering a payment from J.B. Hunt.

The most significant application of IBM software involved a sophisticated integration of multiple technologies and information sources—customer data, contracts, legacy systems, real-time monitoring and satellite-linked computers. The goal was a complete transformation in the way driver detention events are captured, administered and invoiced so that staff can optimize revenue from each delivery.

J.B. Hunt’s HAWK Power Detention system uses case management capabilities to capture and bill chargeable driver detention events using Web-based GUI screens. Delays are automatically identified through satellite-linked computers installed on every J.B. Hunt truck. Once a delay is identified, an e-mail is generated and sent to the detaining facility, notifying the customer of possible charges. These notifications, built using IBM® FileNet® Content Manager and IBM FileNet Email Manager, are determined by the specific contractual agreement between J.B. Hunt and the detaining customer. Highest priority delays are funneled to the next available J.B. Hunt delay specialist, ensuring timely processing. For customers requiring authorization for delay charges, HAWK leverages IBM FileNet Business Process Manager, FileNet eForms, FileNet Email Manager and FileNet Content Manager, to send an electronic form requesting approval.

Once all contractual requirements have been met, charges are automatically processed and sent to the customer for payment. As a result of the increasingly valuable benefits that IBM demonstrated, other operating segments within J.B. Hunt are considering advanced case management strategies as a way to potentially increase process efficiency and improve service quality.

“The success of the HAWK Power Detention System has demonstrated the value and potential of IBM software,” says Tarek Taha, engineering manager, J.B. Hunt. “As a result, other divisions within the company are exploring advanced case management techniques as a way to remove non-value-added work and add dollars to the bottom line.”

Optimizing business outcomes
Beginning with the initial application for managing the volumes of documents associated with shipment and customer transactions, J.B. Hunt was able to:

• Reduce cost, risk and inefficiency of paper document storage and retrieval
• Centrally and securely manage critical corporate documents
• Provide employees with instant and secure access the necessary documents

Applying IBM software to the billing process allowed J.B. Hunt to:

• Increase efficiency and accuracy by eliminating manual tasks in the billing processes
• Improve billing accuracy by establishing a central set of billing rules
• Improve automatic billing from 60 to 95 percent
• Easily identify and rectify any bottlenecks in the automated process

The dray carrier management application enabled J.B. Hunt to:

• Eliminate cost and inefficiency of manually processing dray work assignments and payments
• Allow independent carriers to remotely accept pickup and delivery assignments, submit invoices, and automatically generate payment for services

The sophisticated HAWK Power Detention system allowed J.B. Hunt to transform the entire process, providing the specific benefits of:

• Automatically monitoring driver delays and applying the appropriate billing charges
• Improving driver morale increased driver revenue potential as a result of the ability to promptly handle driver delays
• Eliminating errors and saving additional costs and time as a result of automating the process
• Netting the company more than $1 million annually

For more information
Contact your IBM sales representative or IBM Business Partner. Visit us at:
ibm.com/software/data/advanced-case-management

You can get even more out of Information Management software by participating in independently run Information Management User Groups around the world. Learn about opportunities near you at:
ibm.com/software/data/usergroup

For more information on J.B. Hunt, Inc., visit:
www.jbhunt.com

Additionally, IBM Global Financing can tailor financing solutions to your specific IT needs. For more information on great rates, flexible payment plans and loans, and asset buyback and disposal, visit: ibm.com/financing

Products and services used

Legal Information

© Copyright IBM Corporation 2010 IBM Corporation Software Group Route 100 Somers, NY 10589 U.S.A. Produced in the United States of America April 2010 All Rights Reserved IBM, the IBM logo, ibm.com and FileNet are trademarks or registered trademarks of International Business Machines Corporation in the United States, other countries, or both. If these and other IBM trademarked terms are marked on their first occurrence in this information with a trademark symbol (® or ™), these symbols indicate U.S. registered or common law trademarks owned by IBM at the time this information was published. Such trademarks may also be registered or common law trademarks in other countries. A current list of IBM trademarks is available on the Web at “Copyright and trademark information” at ibm.com/legal/copytrade.shtml Other company, product, or service names may be trademarks or service marks of others. This case study is an example of how one customer uses IBM products. There is no guarantee of comparable results. References in this publication to IBM products and services do not imply that IBM intends to make them available in all countries in which IBM operates. IMC12774-USEN-01