Phoning It In: Metal Management Automates Its Workforce Management

Case Study: Leading metals recycler strikes gold with phone-based fleet automation system

Leading metals recycler strikes gold with phone-based fleet automation system

Mountain View, CA  March 3, 2006  Metal Management Inc. is one of the largest full-service metal recyclers in the United States, with net sales approaching two billion dollars annually. The company has 40 facilities in 13 states and, for its fiscal year 2005, Metal Management processed more than five million tons of scrap metal.

The core of the company's operations is its pick-up and delivery business. Metal Management drivers collect scrap metal from customer sites and deliver the product to recycling facilities. A time-consuming and labor-intensive process, it would not be a stretch to say that the company's success hinges to a considerable degree on the efficient operation of this activity.

As part of its commitment to customers, Metal Management has agreed to complete scrap pick-up requests within 24 hours from the time an order is placed, and customers require that Metal Management provide an audit trail that tracks scrap pick-up from the point of order to payment on the load.

Phoning It In

In an effort to optimize office and field resources, and in conjunction with a corporate initiative to implement a paperless payroll system, the Chicago branch of Metal Management deployed in 2004 an automated mobile workforce management solution from Xora Inc.

The Xora service enables drivers to record timesheet and job status information on GPS-enabled cell phones, while office employees have access to Web-based maps and reports that show the status of drivers throughout the day. Metal Management in Chicago handles fleet operations for nine area collection facilities, its drivers completing in excess of 1,400 pick-ups and deliveries each week.

To further assist its fleet management program, Metal Management has integrated Xora with route optimization software as well as bar code scanners that can be attached to a phone. According to Metal Management executives, the result has been a system that provides dispatchers with a comprehensive, real-time view of fleet operations.

The Old Way

Before Xora, customer orders were processed manually and data collected by drivers was recorded by hand, then passed to a desk clerk for entry into the company computer system. Drivers were also required to hand-deliver bills of lading, or receipts, to customer contacts at job sites, indicating completion of an order. If a driver was unable to easily locate the customer contact at the job site, tracking him down meant it would take the driver that much longer to get to his next assignment.

The effectiveness of fleet operations was further complicated by the fact that dispatchers were required to check in with drivers twice daily for an update on the progress of their routes. Pre-Xora, dispatchers used truck-based radios to communicate with drivers. With 85 drivers "online" at the same time, communication was a logistical nightmare. And since drivers were not always in their vehicles, dispatchers often had only partial access to field information. In addition, it was not possible to assign drivers optimum routes, and more importantly, re-sequence them when changes happened.

Still another challenge was the scope of the information drivers needed to collect at each customer site. To truly understand what was happening in the field, Metal Management executives and dispatchers require as much information from each stop as possible, including when a driver arrived at a customer site, when he left, and what was accomplished while he was there. In many cases, drivers were expected to collect up to nine different pieces of information, all of which had to be recorded manually and re-entered into office computer systems for review.

Pumping up Customer Service

Since deploying the Xora service, data collection and analysis are easier, and customer service is better than ever. Today, new orders are entered by dispatchers into the Xora-integrated routing software system, which generates a confirmation number and e-mail that is sent to the customer. Dispatchers use the same data to produce an electronic trip report  a perfect replication of the handwritten trip reports Metal Management was utilizing before Xora  which is transmitted wirelessly to drivers' cell phones. As a result, drivers can go directly from local recycling facilities to customer sites instead of starting each day with a trip to the company's Chicago office.

Using drop-down menus on the phone-based Xora system, drivers can quickly record a multitude of information, including when a job was accepted, when he arrived at the job site, when an empty container was left, when a full container was picked up, when the driver is headed to or arrived at the recycling facility, and when the container has been placed on the scale. Rather than wait until the end of the day to collect and review this information, dispatchers have configured the Xora system to provide data updates in one-minute intervals.

As for the customer bills of lading, once a driver notes in the Xora application that a job has been completed, the system automatically generates a receipt, which is sent via e-mail as a PDF document to the customer's computer. Unscheduled assignments, rather than being phoned or radioed into a driver, are now sent via text message from the Xora system in the office to a driver's cell phone, thus speeding the flow of information and providing an easy to review data trail. Exception reports produced by Xora enable dispatchers to identify operational bottlenecks as they occur instead of after the fact, allowing for timely corrections and improved customer service.

Meeting Sarbanes-Oxley Requirements

In keeping with the corporate movement to paperless payroll, Metal Management is using Xora as its system of record for drivers. Time sheet information, recorded by the driver and confirmed by the GPS chips in their cell phones, is funneled to the routing software system and exported to Microsoft Excel, then shipped via e-mail to Accounting. All of which makes the payroll process more efficient and accurate.

Another innovative use of the Xora system has been its coupling with a bar code scanner. As a pubic company, Metal Management has an obligation to meet Sarbanes-Oxley requirements handed down by the SEC. Auditors want to know the precise location of valuable Metal Management containers. Drivers use the bar code devices attached to the cell phones to scan containers upon pick-up and delivery, so management has an easy way to track the whereabouts of each asset. Here again, container information captured by the bar code device is linked to the Xora system and immediately available for review by executives and dispatchers.

A side benefit of the Xora system has been its impact on the noise level in the office. Because most communication between the office and field is now electronic, much of the phone traffic has been eliminated, and dispatchers can talk to customers in an environment that is less hectic.

Bringing the Benefits to the Bottom Line

Since going live with Xora, Metal Management drivers are dispatched to customers 10 percent faster than before, equating to more "same day" customer service and an increase of 95 completed jobs each week. At an average of two hours per job stop, Metal Management is now billing an extra 190 hours every week, which works out to an additional $14,440 of billable freight per week.

On the flip side, Metal Management in Chicago estimates it is saving $15,000 per year by reducing the amount of time clerks spend entering data into the computer system. Additional savings can be found in the cost of the Xora service as compared to a truck-based or other mobile system. Cell phones running the Xora service and equipped with bar code scanners cost about $400 per unit, while competitive solutions range in price from $1,000 to $2,500; 85 Metal Management drivers use the Xora service today.

"Xora is the backbone of our fleet management system and the pipeline through which all customer data flows," said Phil Arends, driver trainer and special projects manager at Metal Management. "Having automated these critical business processes, everyone involved with the dispatching program is operating more efficiently. Xora has been a huge win for Metal Management and its customers."

"Cost savings and additional revenue are only part of the story," said Tom Wilkiel, fleet operations manager for Metal Management's Midwest division. "Xora is helping us to increase our level of service to customers, and no dollar amount can quantify that value. Xora is an excellent tool for the logistics industry. Its combination of pricing, reliability, scalability and performance far exceeds that of its competitors."

Additional Articles of Interest

 For more information on solutions for the service and support chain, see the articles "In the Field and All Grown Up," the Net Best Thing column in the June/July 2002 issue of iSource Business (now Supply & Demand Chain Executive), and "Time to Prove It," the Net Best Thing column in the April/May 2003 issue of the magazine.

 For best practices in service parts management, see the article "Three Keys to Successful Service Parts Management."