By Steve Feldman—Chattanooga, Tenn.—Despite numerous supply chain challenges and rising costs across the board, Xpress Global Systems (XGS) is on pace for a record year. A tenacious commitment to service—including a massive technology upgrade and new customer portal—coupled with a strong value proposition for flooring retailers and suppliers is driving this growth.
Some of the growth is cumulative, attributed to a pair of acquisitions earlier this year, but most of the growth is organic. That’s credited to a booming floor covering market, which on one hand is good for business but on the other hand poses difficult challenges for a logistics company, specifically tight capacity on trucks and driver retention and recruiting.
“Capacity is very tight, thus causing inflationary cost pressures on the transportation business,” said Derek Bartley, vice president of process improvement. “The cost of fuel is up significantly. Wages for drivers are up. Virtually all players in the logistics space have faced recruiting challenges due to the increase in demand.”
That leads to even tighter capacity as smaller trucks get utilized in lieu of larger ones. “You also have fleet diversifications, where you’re switching over to a box truck which requires a different class of driver,” Bartley said. “Class A drivers have more stringent requirements to drive the larger trucks. Class Bs have the ability to drive box trucks.”
How does a company like XGS maintain or even enhance its service in this climate? For starters, they invest in their people by providing opportunities for development and implement sign-on and referral bonuses to attract high-caliber talent. They also leverage technology and data to maximize their network where challenges exist with capacity. “Our technology enhancements position us to optimize resource utilization and stay on time and on schedule,” Bartley explained. “We can make informed decisions on when to expand fleet, add new facilities, increase our workforce or—as a last resort—partner with outside carriers to ensure we are continuously raising the bar on service.”
Technology enhancements at XGS involve new WMS (warehouse management systems) and TMS (transportation management systems), resulting in increased transparency for their customers. “We took a hard look at our technology and are closing the gaps between what we have and the expectations of our customers,” said Daniel Millbank, director of information technology. “Then we determined how to best accommodate those needs. For example, we know accuracy and dynamic visibility into what’s in our warehouses is imperative for our customers and that we had to be flexible with how items are indexed and inventoried. Everyone has their own way of categorizing their freight. So, there’s an enormous amount of versatility that’s needed to accommodate every single customer.”
On the TMS or freight side, XGS has identified key areas to exceed customer expectations. Here it looked to an outside vendor, Tech Evolutions Partners, a firm with experience in industry standards and best practices. “The idea is for us to take advantage of that experience and connect all those systems into one cohesive unit that will allow our customers and internal users to go to one place where they can have full transparency into tracking the freight.”
XGS has already gone live in Dallas with the WMS upgrades, and the TMS is piloting right now in Lakeland, Fla. Early results are encouraging. “We’ve witnessed an improvement in accuracy because the new system has quality built into the processes,” Bartley said. “You never lose traceability of freight; it drives one-piece flow and virtually eliminates the opportunity to batch process. That’s been a huge improvement. On the quality side, it prevents misplacing products in the warehouse because the technology drives you to where it’s supposed to be. It also provides real-time inventory updates, so our customers always know where their inventory is.”
Expectations are to be fully live with everything across the country by the end of Q1 2022.
Millbank said the separator is that XGS went the “non-traditional” route of not selecting an all-in-one integrated system such as an Oracle or SAP where some areas are good; some not so much. “The route we went was best of the breed—a WMS that best fits with our business, one that’s highly customizable. So, we’re able to cater it to our business as opposed to choosing an ERP with a substandard WMS but a dynamite TMS.”
Not only does XGS integrate its systems internally, but it also integrates with its customers’ systems, such as SAP, NetSuite. “When they place an order in their system, that transaction flows automatically into ours, and it eliminates that phone call or email. It’s all digital. Those connections have been precious.”
This all has created what Bartley refers to as a digital transformation. “When we first started doing the due diligence on what companies we wanted to partner with on the WMS and TMS, we evaluated our processes and identified 80% of them had some sort of manual interaction,” he said. “This digital transformation allows us to increase automation of the formally manual processes and minimize opportunities for error. It enhances all aspects of our business resulting in the best-in-class transparency for our customer on inventory and delivery status.”
Acquisitions create synergies
The two aforementioned acquisitions—7 Hills Transport and Delta Distribution—provide enhanced strength in the middle of the country. “7 Hills Transport is very active in Texas and Louisiana with a cross-docking operation in Cartersville, Ga., which is near our Tunnel Hill operation,” Bartley said. “We operate in Texas as well, so it brought forth those synergies. Delta Distribution is based in Grand Rapids, Mich., and has a robust line haul network. They are also capitalizing on our technology. Those synergies came into play almost immediately.”
XGS is also beefing up its presence in the Northeast. The company is in the process of opening a facility in Clinton, Mass., to better serve customers in the region and provide additional growth opportunities.