RICHMOND, Va. — Century Distribution Systems, Inc., along with Jo-Ann Fabric and Craft Stores® and Acuitive Solutions, are the proud recipients of the first 2012 Alliance Award, sponsored by World Trade 100 magazine and SMC3, in the international freight category. The award honors dynamic collaboration between shippers and their logistic partners that drives supply chain excellence. Century and its partners received the award in recognition of a freight bill audit and payment scheduling program the team designed and implemented to achieve 100% audit of Jo-Ann Stores’ freight bills prior to remittance. A key differentiator of this program is how it capitalizes on each partner’s strengths to create a better, more innovative solution than each company could implement individually.
The award will be presented to the team on January 22 at the SMC³ 2013 Jump Start conference in Atlanta, Georgia.
Century, Jo-Ann, and Acuitive formed their partnership in early 2007. Bryan Schuster, Jo-Ann’s Manager, Global Logistics, says, “We recognized that incorrect invoices were being paid, and it would often take nine to fifteen months to fully resolve billing issues, long after final cost allocations had been performed. With the business growing, a pre-payment audit solution was needed.”
Acuitive maintains Jo-Ann’s contracted rates and terms in its system. Jim McCullen, Century’s Vice President of Information Systems, explains, “The audit kicks off with Century feeding ASN/856 transactions from our web-based platform, VMS®, to Acuitive. Acuitive then receives freight invoices via EDI 310 feeds from Jo-Ann’s carriers. Invoice anomalies are identified systematically and flagged for non-payment pending follow up with the carrier. Validated freight charges flow from Acuitive to VMS®. Jo-Ann’s Accounts Payable team runs a VMS® report summarizing verified charges.” The Century/Acuitive solution is leveraged by several departments within Jo-Ann Stores, particularly Logistics and Accounting, not only to manage payment and cost allocation, but also to track carrier performance. Results of the Century/Acuitive freight audit are fed directly to Jo-Ann Stores’ financial systems.
“The process is fair and transparent to all carriers, with under-billing treated the same as over-billing. This has resulted in greater cooperation from our carriers, who see the process as an unbiased, equitable way to efficiently resolve errors and expedite payment from Jo-Ann,” Schuster adds.
Today, Jo-Ann pays Acuitive/Century-validated charges exclusively. No payments go out against unverified freight bills. By working with the carriers, Century/Acuitive resolve more than 98% of all billing issues without involving Jo-Ann Stores. The program has enabled Jo-Ann to reduce by 25% the number of incorrect invoices paid and save $30,000 in labor costs through automation. Jo-Ann has increased margins by eliminating over payment and establishing payment scheduling based on ETA and credit terms.
“Century’s corporate culture is all about innovation and continuous process improvement,” says McCullen. “We’re now working on moving this program further upstream to reap additional benefit for Jo-Ann Stores. We want to leverage the cost accounting framework derived from this audit program to drive cargo routing overseas. We can make use of this valuable costing and transit time data to ensure product is routed as economically as possible.”
A video providing additional commentary on the Jo-Ann Stores’ freight audit program is available at: