Con-way Uses Kronos Labor Metrics to Control Costs and Visibility and Improve Productivity

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Con-way Inc. is a $4.3 billion publicly traded company that provides an extensive array of freight transportation, logistics, and supply chain management services in the United States and 20 countries worldwide. Among the services the San Mateo, Calif.-based company provides are less-than-truckload (LTL) and full truckload freight transportation in North America and third-party logistics including warehousing, distribution, transportation management, multimodal services, and supply chain engineering globally. Services are delivered through three primary business units: Con-way Freight, a regional and nationwide LTL carrier with more than 300 service centers; Con-way Truckload, which with its fleet of 2,800 trucks provides regional and transcontinental full truckload services in North America; and global supply chain company Menlo Worldwide Logistics, which manages nearly $1 billion of freight spend annually and operates 16 million square feet of warehouse space in 20 countries.

Con-way’s decentralized payroll system resulted in pay miscalculations, overpayments, considerable timecard costs, and sizeable storage needs for processed timecards — as much as seven years’ worth of records in many locations. Managers at each site reviewed and totaled each employee’s hours daily or weekly, then manually entered information regarding the employee’s work location, account code, and hours worked. Each site then transmitted a weekly payroll file to a central office for processing.

At Con-way’s numerous locations, frontline supervisors ran into labor budget overages more often than they wanted, and had difficulty measuring workforce productivity to meet customer service levels. Data warehouse reports for regional managers and executives also lacked detail on a key component — labor. Because this information existed only in paper files and separate databases by location, Con-way didn’t have visibility into the information that could help it control labor costs and improve workforce productivity.

The solution to these issues? The Kronos Workforce Central suite

Within the Con-way enterprise, Con-way Freight and Menlo Worldwide Logistics in the U.S. utilize the capabilities of the Kronos Workforce Central® suite of solutions to pay employees accurately, provide managers with visibility and control over key labor metrics to better manage their facilities and labor costs, and reduce potential compliance issues by tracking and validating each employee’s hours. Between the two business units, the platform supports the payroll management needs of more than 22,000 employees who fall into job categories including driver, dock and warehouse worker, and administrative support staff. With the enterprise’s different business units and diverse workforce, the payroll system presented a complicated challenge.

Con-way gains control over key labor metrics

“With Kronos, we feel confident that we’re paying over 22,000 people accurately every week,” says Bryan Beazley, Con-way’s project manager of the Kronos rollout. The company’s delivery drivers, dock workers, and most administrative staff punch in at one of the company’s 700 Kronos 4500 badge terminals. All timekeeping information is exported from the Workforce Timekeeper application directly to payroll, freeing up managers for other activities while improving payroll accuracy. Restrictions at the badge terminals also prevent employees from clocking in early, helping scheduled hours meet actual hours.

This solution has helped Con-way control key metrics, such as overtime and employee attendance. “Kronos gives managers visibility as employees approach overtime, to keep close tabs on it to minimize labor costs,” says Greg Peterson, Con-way’s application team coordinator for the Kronos support team. “And company executives like the visibility they now have with our automated attendance process.” The solution also tracks time of temporary hires, giving Con-way the ability to verify invoices from its staffing firms.

The Workforce Attendance application has provided control over one of the most difficult processes to standardize across so many locations. “It’s made it very easy for managers to administer attendance and enforce policies consistently,” says Beazley, “eliminating claims of favoritism, catching errors that could turn into overpayments, and providing an audit trail that improves compliance.”

Visibility into workforce data improves productivity and accounting accuracy

Using Kronos information, supervisors can tie their labor costs to their number of shipments and revenue to measure performance daily, or more often if needed. “Having access to timely labor information helps our operations managers better manage their facilities,” adds Beazley. As the first pickup and delivery drivers return to a service center, Kronos on-premises reports help managers ensure that they have enough coverage — without overstaffing — to perform whatever dock work needs to be done in time to set up the next day’s deliveries, and meet turnaround times and deadlines.

Con-way also uses Kronos to track where labor costs are actually being accumulated, for improved accounting accuracy. With drivers making deliveries at multiple locations, the company has its own complex rules on which location gets charged for a driver’s time. “Kronos tracks how many hours are charged to each location, helps pay employees correctly, and ensures the right cost centers get charged,” explains Beazley.

Senior and regional managers use Kronos reports and information supplied daily to the company’s business intelligence system for improved visibility into service center activities. All Kronos punch data is sent to the system, giving executives access to detailed information to help them evaluate labor costs and activity levels. Beazley says his team can also respond quickly to requests from corporate-level managers in finance, operations, HR, and other departments for ad hoc reports by using Kronos data, reinforcing the value of the company’s central database.

Consistent policy application improves labor law compliance

Compliance is a big issue at Con-way. Managers use Kronos reports to see when drivers are approaching DOT drive-time limits in order to avoid violations and to prevent scheduling problems from compromising delivery times. Beazley says the ability of Kronos to help the company comply with the hours-of-service regulations is a major benefit.

“With Kronos’ configurability, we’ve been able to meet all of these various rules and our changing business needs without customization,” he adds, reducing the solution’s total cost of ownership. Although Con-way is the melding of three companies, they have not come together on their pay practices. Con-way’s six operating units have their own pay rules, and California and New York have special pay and work rules that Con-way can easily accommodate in order to maintain labor law compliance.

The company’s compliance risk has been further reduced with the solution’s detailed audit trails. Con-way has been able to validate punches from a number of years prior, at the request of its legal department, and has supplied the accounting group with detailed labor information to allocate labor costs to particular accounts.

Tapping capabilities for future benefits

In the future, the company plans to use its Kronos data to build out reports that match freight tonnage to man-hours to evaluate productivity, as well as use Workforce Attendance to identify and reward employees with exemplary attendance records. Peterson says the solution’s options and configurability make these goals more easily achieved.

Con-way Overview

Category: Freight

Business Type: Trucking and logistics

Employees: 28,000+

Locations: 440

Products: Workforce Timekeeper™, Workforce Attendance™, Kronos 4500™ terminal

Project Benefits

• Effectively managing key labor metrics helps managers control labor costs

• Visibility to workforce data improves productivity and labor cost accounting

• Consistent application of rules and policies mitigates labor law compliance issues

Kronos Incorporated 297 Billerica Road Chelmsford, MA 01824 +1 800 225 1561 +1 978 250 9800 www.kronos.com

More information about Kronos customer success stories may be found at www.kronos.com/library-search.aspx.

©2010, Kronos Incorporated. Kronos, the Kronos logo, and Workforce Central are registered trademarks, and Workforce Timekeeper, Workforce Attendance, and Kronos 4500 are trademarks of Kronos Incorporated or a related company. All other product and company names mentioned are used for identification purposes only and may be the trademarks of their respective owners. All specifications are subject to change. All rights reserved. 33501-99507