How Cardinal Logistics scaled operations and ensured SOX compliance with Nutrient Workflow

Background

Cardinal Logistics Management, Inc., headquartered in Concord, NC, started as a common carrier in 1981 with 14 tractors. In July 1997, Cardinal Freight Carriers was purchased from its former parent company, ABF, by the Chicago-based private-equity firm GTCR Golder, Rauner. Due to its focus on dedicated delivery and logistics consulting, the company has grown at a rate significantly above the industry average, becoming a top logistics provider in North America.

The challenge

As the company continued its rapid growth, it found that its traditional method of manually processing requests or using disjointed desktop databases to communicate between field locations was becoming cumbersome and disorganized.

Each department had its own processes and preferred communication methods, and field users were required to meet the demands of whichever department they needed for a given task — a challenge that took time away from their management responsibilities. Cardinal needed a method that both standardized and quickened the process, so the company implemented Nutrient Workflow to automate its driver development and help desk processes.

Later, as Cardinal prepared for a public offering, management realized its existing systems wouldn’t fully comply with the Sarbanes–Oxley requirements for publicly held businesses. To address this, Cardinal expanded its Nutrient Workflow implementation to include SOX assessments for P&L verification and compliance.

Automation goals

• Improve the handoff of requests between decentralized field operations and the corporate office.
• Better manage workflow to enhance customer service and support continued growth.
• Give management and employees visibility into request processing, allowing them to easily identify and track requests.
• Unify departments around a single system for completing their respective tasks.
• Verify all P&L input from employees at all levels to comply with Sarbanes–Oxley requirements.

Why Nutrient Workflow?

According to Cardinal’s VIP of MIS, Jonathan Turner, Nutrient Workflow proved to be faster to install, easier to administer, and more intuitive for novice users when compared to other options he evaluated.

Turner was also impressed with the versatility of the software, saying it can apply to just about any business. “It especially works for a decentralized organizational structure where there are a wide variety of request types and workflows,” he shared.

Implementation

Cardinal chose Nutrient Workflow’s solution because it was easy to deploy and intuitive for employees to use. The company found it to be flexible in the scope of tasks it helped automate, and the software’s compatibility with Cardinal’s existing systems (SQL Server, intranet) made the move quick and painless for IT.

The Nutrient Workflow team spent time onsite installing and implementing the Nutrient Workflow software. The only challenge Cardinal faced was getting all the departments to agree to standardization; each entity was concerned that its individual process, as well as exceptions, would be overlooked. “The business process analysis part of the implementation was very helpful [in that respect],” said Turner.

As business volume increased, Cardinal enhanced its implementation with the latest version of the software. This update provided additional capabilities that Cardinal was able to immediately put into place. The team particularly benefited from automatic process escalations, an extended hierarchy of process categories, and expanded process definition.

The automatic process escalation enabled Cardinal to define notifications that can escalate based on time, create predefined rules that move a process along without continual user monitoring, and automatically escalate and trigger action notifications to ensure quicker and more efficient movement of requests through the process.

The extended hierarchy of process categories also made it so Cardinal could categorize processes in multiple levels by the administrator. This gave end users the ability to filter down to the specific process they want to submit by multiple categories, saving both administrators and employees significant time in day-to-day operations.

This expanded process definition allowed administrators to further define a process with file attachments, versions, process and reporting managers, and categories, providing even greater control to the entire system’s workflow.

In addition, the new version of Nutrient Workflow provides user reporting, enhanced user interfaces, email notification templates, user activity archives, form replication, enhanced administrator reports, and form field replication.

With Nutrient Workflow SOX assessments, Cardinal can implement, monitor, and control processes and policies that require authorizations as part of the internal control compliance requirements in the Sarbanes–Oxley Act. The software helps Cardinal:

• Design, describe, and publish corporate policy
• Enforce internal controls automatically
• Create a complete audit trail of control activities
• Document risk assessments

These capabilities reduce the time and cost of auditing and compliance reporting.

The benefits

Since the initial Nutrient Workflow installation, Cardinal has standardized its operations and gained greater visibility into workflows. Employees and managers can now quickly revise and update a process when it needs to be changed and get instant compliance, because all necessary changes are automatically made within the system. This capability, as well as the fact that fewer people are required to process requests, has saved the company time and resources that can be better used to serve customers. In addition, clearer communication on exceptions, improved documentation, and online access to case history requests has enhanced intra-department communication and made operations run much smoother.

Nutrient Workflow has also enabled Cardinal to run more driver applications through the system than ever before, in addition to helping them improve the quality of the applicants they hire. “If we hire a lot of drivers that don’t meet our corporate standards, they could have a lot of accidents and they wouldn’t deliver the kinds of service we promise our customers,” Turner said. “Accidents are probably the biggest driver of our profitability. We could have one driver have an accident that could cost us a million dollars, so having a process in place that can help us ensure that the quality of drivers sitting in our trucks is at the highest level has a huge impact on our company’s performance.”

The SOX assessments tool gave Cardinal the ability to easily document and communicate policies and procedures, carry out management assessment, base its internal controls on a suitably recognized framework, automate enforcement of defined internal controls, and create a complete audit trail of transactions and control activities. It also allowed rapid changes to accommodate process or control enhancements and integration capabilities for process updates to be exported to and from ERP and legacy and disparate systems. The company was able to initiate the complex and time-consuming process of documentation for Sarbanes–Oxley compliance without having to add administrative and financial staff to do so.

The main benefit for Cardinal in implementing Nutrient Workflow SOX assessments is that the company can ensure that at all levels, managers have verified all the data they’ve put in to the system that drives invoicing, payroll, and all functions that affect P&L reports. At every level of the company, all employees must attest that the information they’ve entered is correct; they’re required to answer a series of questions at the end of each submission.

ROI

Cardinal’s revenues grew by 50 percent, and the company added 40 field offices. Yet the company was able to process the higher volume of driver applications and service the increased number of field users without adding staff at the corporate office. Because Nutrient Workflow managed a 30 percent increase in process volume without requiring an increase in staff, Cardinal saw a savings of $30,000 in overhead.

“The way our company’s structured, we have a small corporate staff and a large number of users out in the field locations,” Turned said. “Improving the handoff of requests between people in the field and our corporate people has helped us scale up without adding additional staff in Concord.”

Using Nutrient Workflow to automate the driver application process resulted in more “landing” of qualified applicants who might have accepted another offer while waiting to hear from Cardinal. This lowered the average cost per hire, because the company found more successful applicants from the same advertisement expenditure. Currently, Cardinal runs about 15 percent of applications approved but not hired; before Nutrient Workflow, that number was closer to 25 percent. The improved process gave Cardinal an approximate savings of $200K.

Cardinal has expanded operations without adding to its corporate overhead because of the greater efficiency offered by the automated process, as well as the time and money it saves in training employees on using the system. “If we wanted to add 50 new processes to the system, then we’d be adding 50 more things that we have to require each field operation to do when they wanted something from our corporate staff,” said Turner. “By having Nutrient Workflow, once they’ve learned the system for one process, they’ve learned all 50 different processes, because the interface is the same.”

Conclusion

Cardinal is very pleased with the installation and the ROI it has seen. The company saw an immediate improvement in communication, processing, and workflow in the initial phase of Nutrient Workflow implementation, and is confident the upgrade and additional SOX assessments capability will help the company continue its tremendous growth.