Case Study: Using Technology to Make Things Happen.

Using a telecommunications system especially designed to support its innovative business plan, a Santa Clarita-based company has been developing aa significant new market opportunity in a very competitive industry. Mexpress, an international trucking and logistics company teamed up with Camarillo-based Information Systems Professionals (ISPro), to devise a system that enhances communications between Mexpress, its customers, suppliers and government agencies. The system also reduces delivery time, warehousing and infrastructure costs for leading computer manufacturers and consumer products companies who ship products between the United States and Mexico. One of the reasons the system has proven so successful is that every aspect of the network was designed with specific Mexpress business requirements in mind.

A Business-Driven Solution

Mexpress executives realized there was an opportunity to win a significant share of the shipping business between the US and Mexico if there was a way to eliminate truckers' three day wait to clear customs at the Mexican border. This would require that shipments clear customs in the United States before reaching the border. Their solution was to contract with a Mexican government-licensed firm to complete all customs documentation at the Mexpress warehouse in City of Industry, California, and transmit that information to customs officials. The shipment could then be "waved through" when it reached the border. It was clear that the success of their plan would depend on having a reliable, affordable method of communications between the US and Mexico.

Mexpress now has a computer and communications network that uses email to transmit customs documentation to border officials. The network also supports secure, web-based customer service that allows customers to place and track orders. In addition, it enables Mexpress agents, customers and government officials in various locations in the US and Mexico to communicate quickly and cost-effectively by fax and email about cargo shipments, prices and delivery times, allowing them to avoid dial-up calls or faxes over the Mexican government's costly TelMex communications system.

Analyzing Information Requirements 

It was in November, 1999, that Mexpress approached ISPro about providing the information technology needed to carry out the firm's business plan. Mexpress selected ISPro because a Mexpress executive had worked with ISPro on a previous project.

ISPro provided an analysis of Mexpress' information systems requirements, including its general business systems as well as the network the company would need to speed communications between its staff, customers and customs officials in the United States and Mexico. As part of the analysis, ISPro examined the information technology requirements for Mexpress' headquarters in Santa Clarita, for the warehouse in City of Industry, and for offices near the Mexican border in New Mexico and Arizona. While ISPro recommended appropriate computer hardware and software for Mexpress, most of the ISPro analysis concerned the specific ways information and telecommunications technology would support Mexpress' international business goals.

IS Pro worked with Mexpress to build a strategic business plan, so any purchases of information technology or any changes to the way the network was serviced would be dictated by specific business needs, not by a desire to add fancy technology for its own sake. For example, Mexpress was frustrated with the accounting system they had at that time, because it did not include an effective tracking system for their industry. Instead of suggesting they purchase a new system, ISPro worked with Mexpress' software vendor to refine the relevant applications. The desire of Mexpress to concentrate on trucking and logistics led to a proposal to monitor and manage the network, as well as design it.

One of the most important recommendations made was the result of Mexpress' need for frequent, secure high speed communications between Mexico and the United States, and the high cost of dial up phone and fax between the countries. ISPro recommended a secure, private frame relay network, using a fractional T-1 line. After soliciting competitive bids from several major carriers, ISPro selected MCI to provide the fractional T-1 line and frame relay service. The frame relay service fees Mexpress pays are based on the transmission of a certain amount of data, faxes, e-mail etc., per month. If Mexpress exceeds the amount for which it has contracted, it can incur slightly higher charges.

Mexpress' cost for the fractional T-1 line from MCI is about $2,500/month, a quarter of the cost of a full T-1 to Mexico. The fractional T-1 line has proved to be a very economical means of handling all the data transmitted by customers, brokers and custom agents, as well as the email and faxes.

ISPro selected MCI not only because of the firm's competitive bid on the fractional T-1 line, but also because MCI has significant experience dealing with TelMex, Mexico's national telecommunications carrier. ISPro knew that TelMex would be responsible for equipment and services in Mexico and wanted an experienced liaison to deal with the company.

Faster Turnaround, Lower inventory

As a result of the new system, Mexpress is able to provide what it calls "borderless transportation services" and guarantee a shipping time of 60 hours or less from Los Angeles to any location north of Mexico City. While Mexpress customers also benefit from Mexpress services on freight entering the US from Mexico, the time savings are not as great as US-to-Mexico shipments, because the customs process at the US border is not as complex.

Many companies use the Mexpress system to speed deliveries between the US and Mexico, and are able to cut costs, and estimate delivery time more precisely than before. For example, computer manufacturers whose profits depend on maintaining very tight inventory controls import circuit boards from Taiwan for assembly in Mexico, and then ship the computers back to their US distributors. By using Mexpress, the manufacturers save several days of shipping time. Also, the finished products do not need to be stored in the manufacturer's warehouse. Consumer products, and machinery manufacturers rely on Mexpress, too. While most Mexpress traffic is between the US and Mexico, the company and its subsidiaries handle shipments to and from Canada, and the Pacific Rim, as well, and use their telecommunications network to handle communications to and from these points.

Fast, Easy Communications with Staff, Shippers and Customers

The network's email feature is especially valuable because it simplifies communication across Mexico's various time zones. An instant messaging feature allows Mexpress brokers to send messages to each other, quickly and easily.

The network also makes it possible for Mexpress customers to order shipping services. A web-based tracking system allows customers to log-in securely and to input data. With this elaborate information infrastructure, Mexpress provides one stop shopping for its international customers.

Managing the Network

To link the various Mexpress and government locations, ISPro chose the Cisco 1720 router, a device specifically designed for small to medium-sized businesses. One reason ISPro selected this device is that it provides the encryption of data necessary for secure transmissions over the network The hub of the Mexpress communications network is located at the ISPro headquarters in Camarillo, California. ISPro uses a Cisco 2600 router to handle Mexpress communications. Soon, ISPro will be upgrading the 2600 router to a 3600. Through its hub, ISPro controls network users' access to the Internet, provides a firewall to protect Mexpress webbased customer service applications, and continously monitors the network. ISpro also works with MCI, Cisco and other vendors to make certain the network functions properly.

ISPro selected Dell POs to handle Mexpress email, order entry and other functions at the various Mexpress locations. ISP chose Dell because it is a proven platform that is well configured, and is easy to troubleshoot. Network and computer problems are rare at Mexpress. ISPro is able to fix 85% of any software problems remotely from the ISPro headquarters. ISPro also sends a specialist to each Mexpress site every week to make certain all systems are in order.

Focus on Trucking and Inventory Management

The new information technology system has freed Mexpress to concentrate on its strengths as a trucking and logistics company, and relieved it of any concerns about its information systems. In the future, Mexpress may need to replace some of the dedicated frame relay links it currently has with Virtual Private Networks using the Internet. The Cisco equipment can easily be adapted to work with this technology.

The innovative solution Mexpress incorporated demonstrates how information technology can be used to create a "virtual" company that can handle inventory quickly and efficiently. Mexpress customers, such as computer manufacturers, benefit from this solution because a faster turnaround of inventory makes it unnecessary for them to make huge capital investments in warehouses and other infrastructure.

While this communications solution was designed specifically for a highly mobile, time-sensitive business, it's clear that other businesses can benefit greatly from computer and telecommunications systems that are carefully thought out and designed with the actual needs of the business in mind.

This article was provided by information Systems Professionals (ISPro).