Schneider National is far-and-away the largest trucking firm in the United States, with about 19,000 employees and a fleet of nearly 15,000 trucks (cabs) and 43,000 trailers. The company is so large that it is $1 billion larger than the next two largest trucking firms combined. Headquartered in Green Bay, Wisconsin, Schneider National services two-thirds of the Fortune 500 corporations, including such major clients as General Motors, Wal-Mart Kimberly-Clark, Procter 81 Gamble, Chrysler, Sears Roebuck, and Staples. The company is privately owned and had annual sales in 2000 of about $3.1 billion, a growth of nearly 11 percent from the previous year. Schneider National was a major trucking firm with Don Schneider as its CEO when the federal government deregulated the trucking industry in the 1980s, revolutionizing the business environment of the industry overnight. Interstate trucking firms no longer had to follow the rules of a regulatory bureaucracy about what kinds of freight to carry and where to take it. These rules had made it difficult for customers to change carriers because only certain trucking firms could meet these regulations. Competition for customers heated up. Schneider National responded to these demands with a multipronged strategy based on the use of information technology, so that computer systems were now playing a powerful role in Schneider National's operations. Moreover, the company also began treating its employees differently, a major step toward democratizing the company. The company made a paradigm shift. Several other competitors responded to deregulation by merely lowering rates. They went bankrupt. CEO Don Schneider's business philosophy emphasizes IT. Basic to his philosophy is Schneider National's communications with its customers. In its giant headquarters building, the ground floor contains its call center, a full acre in size, where 600 customer service representatives work. Using computers, they have easy access to any customer's history, enabling each customer service representative to answer customers' questions. The result is that the customer is satisfied and the jobs of Schneider National reps are eased. New customer service reps are given 4 to 6 weeks of training, much of it on the use of both the company's computer systems and on the Web. In 2000, 50 percent of Schneider National's customer orders were received either on the Web or on its electronic data interchange (EDI) system. Through the use of these electronic connections, the orders automatically arrive in Schneider National's computer system, resulting in improved ordering accuracy and higher productivity, thus lowering the cost of the whole ordering operation. Moreover, within 15 to 30 minutes of sending an order electronically, customers know what truck will arrive and when. The system also includes electronic invoicing. The reason electronic orders encompass only 50 percent of the total orders received is because the Web system is new whereas EDI is an older technology, dating from the 19605, which is very expensive, so the small companies cannot afford it. However, the Web is very inexpensive and easy to use, and Schneider is trying to get all of its customers to use the Web ordering system. In fact the goal for 2001 is to have 60 percent of Schneider orders arrive electronically, with the gain being through the Web. To the information that its customers require available and to plan its pickups, deliveries, and routes, Schneider National must gather a great deal of information about the trucks, both cabs and trailers. "Trucking companies are asset-intensive businesses," explained Donald Broughton, a senior transportation analyst at A. G. Edwards 81 Sons. He emphasized how crucial the use of the cabs and trailers are when he added, "The guy who has the higher rate of asset utilization wins." In 1998, Schneider National became the first fleet trucking company to use Mm OmniTracs is a satellite- based communications and positioning system produced by m the San Diego- -based wireless communications company. Schneider National worked with QualComm in the development of the product. For it to operate, each tractor has a radio frequency identification tag, a computer with keyboard in the cab, and a satellite antenna with a GPS (global positioning system) on the back of the trailer. Using this system, the company knows where every truck is within 300 feet at all times. The driver and headquarters communicate as often as required. The dispatchers can send information to the driver on how to get to the delivery spot [if there is a problem), the location of the next pickup [usually from someplace nearby), directions to the pickup spot, the necessary papers [if any are required), and even traffic and road problems. The driver can respond with approval and raise any questions about the instructions, the truck, or the road. Schneider National sends and receives about four million messages per month. The cost of mm system was $30 million. Schneider thought the drivers' response to the system might be negative, but he was wrong. "We thought drivers wouldn't know how to use it or want to use it," he said. "What we found was exactly the opposite," because they were frustrated at having to stop along the road and call headquarters at telephone booths every few hours. In fact, the system has been such a success that by 2001 more than 1,250 fleet trucking companies have started using it. Schneider National worked with m again to develop mm in order to collect engine data, such as speed, 3% and oil pressure, via satellite. The data not only contribute to better maintenance of the engines but also help drivers to drive more safely and to take better care of the vehicles. It can even increase the drivers' incomes. One element of a driver's monthly bonus is based on staying within certain key factor ranges when operating the vehicle. Currently, Schneider National is working with Wm to develop a trailer- tracking system. It too is wireless. Each trailer has a radio frequency identification tag, which is read by devices that are placed at various points along the rail lines and in the rail yards. The data are directly linked to Schneider National's fleet management and logistics systems. They tell the dispatchers and the customer reps if the trailers are empty or full and if they are hooked onto a cab, sitting in a yard, or, rolling on a train. "Ultimately revenue is the measurement of how well we load and move these trailers, " said Paul Mueller. president of Schneider Technology Services, a unit of Schneider Logistics. "It is not uncommon to have to send drivers off-route to get [empty] trailers." When they arrive, the trailer isn't there or it might be loaded." Schneider National sees the new trailer-tracking system as a way to improve customer service through more on-time deliveries and better in-transit knowledge. It should increase drivers' satisfaction by increasing their billable miles and so their earnings. Ultimately it will increase trailer utilization and efficiency. The company does not intend to use it to reduce the number of trailers it owns because its orders are increasing. However. it does want to reduce the number of new trailers it needs to purchase so that it can use the saved funds elsewhere. Schneider's Global Scheduling System [GSS) helps to optimize the use of both the company drivers and the loads throughout the country. The system processes about 7,000 load assignments daily, looking at all the possible combinations of drivers and loads on any one day. It accesses more than 7,000 possible combinations of drivers and loads per second, and of course the loads and trucks are at different locations each day. Its primary value is servicing customers by satisfying their requests to move freight. However, the GSS can also save the company money because fuel is expensive, and the system makes it more likely that when the trucker delivers his or her load, the next load to be picked up is close by. Information technology is also being used to help Schneider retain drivers. There is an industry shortage of 80,000 to 100,000 drivers a year. The company's Touch Home program uses the existing in-cab computer technology to give the drivers e- mail access via satellite. The system thus enables drivers to stay in contact with their families. The company is forging ahead. For example, currently it is working with Network Computing magazine on a Web site in which the entire logistics transaction will be accomplished electronically, including the order, its acceptance, pickup, delivery, billing, payment, and reporting. "Then order management will be a no-touch process from front to back," declared Steve Matheys, Schneider's vice president for application development. "That's a huge cost-saver and customer satisfaction play." Source: Charles W "Transportation: Sharing the Load," 5m online" January 13, 2003. a) Discuss FIVE (5) roles of Information System (IS) in today's competitive business environment that can help Schneider National? [10 marks] b) Identify and describe the major types of information systems in Schneider National? What role do they play? [10 marks] c) In your opinion, what does Don Schneider need to know about information when he emphasizes it? Justify your answer. [10 marks] d) Describe the major management challenges faced by Schneider National in building and using information systems? [10 marks] e) Discuss the benefits of using information system for customer relationship management by Schneider National? [10 marks]