InformationWeek 500: Con-way Earns No. 1 Ranking In InformationWeek 500
Paper isn't going away in this information-intensive business. Con-way found a better way to live with it.
It's dawn in California, and the sun is just breaking over the low hills surrounding Hayward, starting to burn off the fog that lies over the south end of San Francisco Bay. The traffic on Interstate 880 is light, but at the loading dock of trucking company Con-way Inc., the workday is well under way.
The L-shaped Con-way loading dock, which has 124 "doors" or bays, is alive with forklifts moving around pallets piled with computers, appliances, bed frames, and other goods. A freight transportation and logistics company with $4.2 billion in revenue, Con-way is a "less-than-truckload" specialist, which means shipments average a half-ton and have short shipping times. Three-quarters of its loads get delivered in one to two business days. From this facility, opened in 1987, 46 short-haul pickup and delivery drivers plus 16 "line haul" (i.e., longer-distance overnight and two-day trips) truckers go out every 24 hours. The Hayward operation serves as a staging point for local shipments in the Bay Area and, overnight, as a freight assembly center where loads are consolidated and processed. More than 700 shipments are received and dispatched here every day.
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Like many companies in the less-than-truckload business, Con-way had faced complex logistical problems with mostly rudimentary technology. Under the leadership of CEO Doug Stotlar, CFO Kevin Schick, and CIO Jacquelyn Barretta, however, it has tested and deployed a range of leading-edge information technologies, including asset management software, a service-oriented architecture, and business intelligence tools, both to improve its internal processes and to bring new services to customers.
For instance, Con-way has deployed virtualization technology for its Unix and Windows environments, reducing hardware and server administration costs. Virtualization also has let the IT organization cost-justify separate development, testing, and quality assurance environments, says IT manager John Reich, "particularly ones that require dedicated environments but have infrequent use," such as disaster recovery systems.
For CIO Barretta, IT consolidation came before automation
"Our IT department has definitely become a source of innovation," CFO Schick says. "Jackie's development team has done a tremendous amount of work in the last two years in terms of the corporate positioning of Con-way. We're in a very customer-focused industry, and in such an information-intensive business, our IT initiatives have given us a big differentiation."
Remarkably, this innovation has come during a period of transition within the IT department. When Barretta became CIO in February 2005, after nine years with Con-way, she was more focused on consolidating the 22-year-old company's IT department than on launching initiatives. Con-way had three disparate IT groups: one for its core business, one for its logistics unit, and one shared-services arm, each reporting to different people and using different platforms. "There was no coordination between them all," says Barretta, who works out of Con-way's Portland, Ore., offices (the headquarters are in San Mateo, Calif.). "It was quite a task to bring them together."