XGS takes service up a notch
By Steve Feldman—Chattanooga, Tenn.—Despite numerous supply chain challenges and rising costs across the board, Xpress Global Systems (XGS) is on track for a record year. A persistent commitment to service – including a massive technology upgrade and a new customer portal – coupled with a strong value proposition for flooring sellers and suppliers is driving this growth.
Some of the growth is cumulative, attributed to a few acquisitions earlier this year, but most of the growth is organic. This is attributed to a thriving floor covering market, which is good for business on the one hand, but which, on the other hand, presents difficult challenges for a logistics company, especially tight truck capacity and driver retention and hiring.
“Capacity is very tight, putting pressure on the transportation industry with inflation,” said Derek Bartley, vice president of process improvement. “Fuel costs have risen significantly. Wages for drivers are rising. Virtually all players in the logistics space have faced recruitment challenges due to increased demand.”
This leads to even tighter capacity, as smaller trucks are used instead of larger ones. “You also have fleet diversification, where you switch to a rigid that requires a different driver class,” Bartley said. “Class A drivers have stricter requirements for driving the larger trucks. Class Bs can drive rigids.”
How does a company like XGS maintain or even improve its service in this climate? For starters, they invest in their people by providing development opportunities and by implementing sign-up and referral bonuses to attract high-quality talent. They also leverage technology and data to maximize their network where capacity issues exist. “Our technology improvements allow us to optimize resource utilization and stay on time and on schedule,” explains Bartley. “We can make informed decisions about when to expand the fleet, add new facilities, expand our workforce or – as a last resort – partner with third-party carriers to ensure we continuously raise the bar on service .”
Technology advancements at XGS include new WMS (warehouse management systems) and TMS (transportation management systems), resulting in greater transparency for their customers. “We’ve taken a close look at our technology and are closing the gap between what we have and our customers’ expectations,” said Daniel Millbank, director of information technology. “We then determined how best to meet those needs. For example, we know that accuracy and dynamic visibility into what is in our warehouses is imperative for our customers and that we needed to be flexible with how items are indexed and inventoried. Everyone has their own way of categorizing their cargo. So there is a tremendous amount of versatility that is needed to accommodate every customer.”
In the field of TMS or freight, XGS has identified key areas to exceed customer expectations. Here it looked to a third-party vendor, Tech Evolutions Partners, a company with experience in industry standards and best practices. “The aim 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 have complete transparency in freight tracking.”
XGS has already gone live in Dallas with the WMS upgrades, and the TMS is now being tested in Lakeland, Florida. The first results are encouraging. “We’ve witnessed an improvement in accuracy as the new system has built quality into the processes,” Bartley said. “You never lose the traceability of cargo; it boosts one-piece flow and virtually eliminates the possibility of batch processing. That has been a huge improvement. On the quality side, it prevents products from being misplaced in the warehouse as the technology pushes you to where it’s supposed to be. It also provides real-time stock updates, so our customers always know where their stock is.”
Everything across the country is expected to be fully live by the end of the first quarter of 2022.
Millbank said the separator is that XGS has taken the “non-traditional” route by 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 took was the best of breed: a WMS that best suits our business, a WMS that is highly customizable. So we can tailor it to our company, instead of opting for an ERP with a substandard WMS but a dynamite TMS.”
XGS not only integrates 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 automatically flows to ours, eliminating that phone call or email. It’s all digital. Those connections have been precious.”
All this has led to what Bartley calls a digital transformation. “When we first started due diligence on which companies we wanted to partner with on WMS and TMS, we evaluated our processes and found that 80% of them had some sort of manual interaction,” he said. “This digital transformation allows us to increase the automation of formal manual processes and minimize the chance of errors. It improves all aspects of our business, resulting in the best transparency for our customer about stock and delivery status.”
Acquisitions create synergies
The two aforementioned acquisitions – 7 Hills Transport and Delta Distribution – provide more clout in the center of the country. “7 Hills Transport is very active in Texas and Louisiana with a cross-docking operation in Cartersville, Georgia, near our Tunnel Hill operation,” Bartley said. “We are also active in Texas, so it fueled those synergies. Delta Distribution is located in Grand Rapids, Michigan, and has a robust liner network. They also capitalize on our technology. Those synergies came into play almost immediately.”
XGS is also bolstering its presence in the Northeast. The company is opening a facility in Clinton, Massachusetts, to better serve customers in the region and provide additional growth opportunities.