Acuity Specialty Products and PowerTrack Freight Payment: Cleaning Up the Freight Payment Process

Acuity Specialty Products, a leading provider of specialty chemicals and products in the institutional, industrial, and retail markets, found their company mired with inefficient freight payment processes and were challenged to find a way out. To achieve corporate goals, the company needed to eliminate paper invoices and duplicate payments while increasing visibility & control, and reducing costs. 

Acuity Specialty Products includes brands such as Zep®, Zep Commercial™, Enforcer®, and Selig™. Headquartered in Atlanta, Georgia, Acuity Brands employs approximately 11,000 people with operations throughout North America, Europe, and Asia.

The operating units produce thousands of cleaners, deodorizers, and pesticides for their global customer base. Acuity Specialty Products is the third largest provider of industrial & institutional cleaning and maintenance chemicals.

Acuity Brands, Inc., with fiscal year 2005 net sales of over $2.2 billion, is comprised of Acuity Brands Lighting and Acuity Specialty Products.

With more than 200 transportation carriers, transferring thousands of shipments a day to more than 26 distribution centers and thousands of destinations, Acuity Specialty Products had very specific needs from their freight payment partner. 

Historically, these 26 distribution centers located throughout North America operated independently from one another within the logistics and accounts payable arenas. There was no system-wide visibility to money coming in or going out.

The company needed a way to monitor spending, operations, and inventory at the corporate level to measure each site's efficiency and profitability.

Pre-PowerTrack Process

Challenges
Before selecting PowerTrack, freight bills were processed via a traditional, outsourced third-party freight payment company.  In addition, Acuity also sent invoices through its own accounts payable department.

From the beginning, Acuity Specialty Products had a number of challenges that it wanted to overcome. The challenges included:

• Using two freight payment processes, internal and outsourced, was inefficient and prone to duplication.
• There were numerous instances of duplicate payments and short payments.
• Electronic documents transferred from Acuity's system to the third-party payment company's system were often mismatched, causing multiple payment errors.
• Paper invoices and bill of lading documents submitted by Acuity were often lost by the third-party payment company and not processed. Acuity would often have to resubmit information up to six times before payment was made.
• Inaccurate accruals - there was no indication of when an invoice would actually be paid for cash management purposes. 

The PowerTrack Solution

Acuity Specialty Products wanted a freight payment solution that could provide cost savings and an improved process in a risk-free environment. A solution that would also pay its carriers on time without errors, offer visibility to both the shipper and carrier, be flexible enough to accommodate all sizes and types of carriers, and deliver excellent reporting capabilities.

After researching a number of options, Acuity Specialty Products found their solution with PowerTrack.

Results

• Acuity Specialty Products gained centralized control and visibility to all of its distribution centers and overall transportation costs. With PowerTrack, Acuity was able to accurately track freight expenses coming in and out of each distribution center. The efficiency and profitability of each distribution center was clearly visible.
• Better access to logistics data aided in overall strategic planning. Acuity was able to consolidate distribution centers - moving more products into select sites.  Use of PowerTrack reporting tools helped determine the best shipping routes and lanes based on volume. Acuity is now better equipped to convert their freight costs as an overall component of product price.
• Carrier selection was also analyzed to show which carriers provided the best rates.
• Surcharges and accessorial charges were reduced.
• Spending was monitored at both the local and corporate levels.
• Duplicate payments, old, unpaid invoices and lost invoices were eliminated.
• Carriers get visibility to the entire payment process from creation of invoice to payment and transfer of funds, eliminating carrier inquiries.
• Days to payment for carriers down from 30-60 days to 2-3 days on 1.5 million shipments per year.
• Improved cash flow for Acuity. Carrier payments are made with PowerTrack funds, providing better cash flow that enables new capital investments.
• Accruals are no longer a guessing game, but an accurate, quantifiable number for cash management purposes. Before PowerTrack, Acuity accrued $2-3 million because there were so many unpaid invoices. Now less than $300,000 is still open for payment in the next accounting period. Accruals are constant and consistent.
• Paper invoices virtually eliminated. All storage and paper handling has been eliminated, including invoice production, mailing and filing.
• Carriers are much happier and trust the system - they are getting paid on time and without errors.

"We have no regrets about our decision to implement the PowerTrack Freight Payments solution. PowerTrack actually pays carriers - correctly and on time! It has improved our entire freight payment process and provided wonderful tools which give both a strategic and tactical view of information."

Alan Whitten, Corporate Director of Transportation, Acuity Specialty Products Group, Inc.