As transportation-fleet managers strive to do a better job of routing and maintenance while controlling costs by reducing fleet size, they are turning to sophisticated systems that can map out the best delivery route, pinpoint the truck at any point along the way and provide store managers with precise delivery schedules.
"The end product of using technology tools is in better management of my fleet size," said Kenton Reynolds, trucking and transportation manager for Laurel Grocery Co., London, Ky. "We are also looking for better customer service, less out-of-route mileage and having the ability to fill trucks to full, aiming at the most economical means of delivery. The full potential is not being realized. The products are expensive. But the benefits are coming about slowly."
Retailers are finding that while the technology is evolving, optimizing transportation resources still requires a blend of high-level systems and first-hand knowledge of the routes.
"We are trying to stay on the leading edge of technology," said Stan Eggink, general manager of corporate transportation for Certified Grocers of California, Los Angeles. "We have to be effective and efficient and drastically improve customer service every day."
While these high-tech tools are expected to eliminate equipment and warehouses, particularly as shipping shifts to more just-in-time delivery systems, achieving these goals requires internal technology finesse.
"You have to understand what you want when beginning to examine technology," said Eggink. "Usually systems are over-priced, under-serviced, over-sold and slow to implement. There are too few qualified reps available who understand our needs. Operators have to know what they need before they search for solutions."
The leading mistake in fleet management, operators say, is in not finding the right process for the real world environment.
"The real world takes a human touch. Feedback is causing the technology providers to improve their product and improve the way they look at logistics," Reynolds said, but they still have a way to go, he noted.
"What you see on paper is not the real world," said Bryan Goins, director of outbound logistics for Associated Food Stores, Salt Lake City. Associated Food Stores currently has a transportation management system in beta test. "What we started with and what we have ended up with are two very different things."
Associated told its provider it needed variables programmed into the system to give it a "what-if" modeling component to examine the effect of shifting delivery sequences, for example.
"Simple activity-based costing and mile savings just aren't enough. It is more than driver, pay and fuel," said Goins. "You have to look at real costs. If you [eliminate] 500 miles you may show a savings on a cost-per-mile basis, but what are the real costs of fleet operations including insurance and depreciation? A lot of what we need is not included in current packages. We need to show how to save money by changing the fleet or changing the route. It is not the mile saved, it's the dollar spent."
"Automated routing systems can fix a lot," said Eggink, but they do require some human intervention. Certified Grocers of California initiated a routing system in 1994. "The system told our drivers to go down dirt roads, rather than go down freeways. It told them to take freeway exits that did not exist. We overrode the fully dynamic function and went in and established some fixed routes. In many instances more miles were not bad. We went around controlled intersections, multiple stop signals and railroad tracks. The miles became meaningless."
At Laurel Grocery Co., routing technology is assisting in use of equipment, helping the shipper gain control over delivery times. The wholesaler is always on the lookout, using the high-tech tools, to ship full loads by grouping customers on the same truck. Where the rub comes is when customers want the same delivery times. In those cases Laurel, wanting to provide customers service under the best economical model, offers financial incentives to customers. Customers willing to be flexible with their delivery time demands are offered cost reductions.
"Technology is no longer a revolution. Now it is an evolution," said Pete Kennon, vice president for line operations and maintenance at Viking Freight, San Jose, Calif. "And it's evolving rapidly and oftentimes the systems don't speak to each other." Viking is a for-hire carrier for major supermarket chains in the Western states, including Alaska and Hawaii. The company operates 7,500 vehicles.
According to Kennon, one of the leading disconnects involves transponders in the truck's cabs, installed for the express purpose of weighing the load while in motion. This technology is giving states the ability to receive truck weights from a mile to one-half mile away from the scale. The system at the scale gives a signal to the transponder that the load has cleared the scale and it is allowed to pass.
"Unfortunately, several states have developed unique transponders," said Kennon. "So a system designed to save driver time is resulting in spending more time and multiple units onboard." Luckily, this situation may be headed off by a consortium of software and hardware providers, he said, as a common protocol is in the works.
Similar system interfaces within the logistics areas of a supermarket chain or wholesaler are becoming more crucial as operators strive to shave costs by sharing information.
"If you start out knowing where you want to end up, system interface can be accomplished because you are building systems with a common goal," said Eggink. "If you are unsure of the ability of the system provider to make changes or if the cost is prohibitive or if you want to have an initial test of the ROI, then you are forced into a position of piecing systems together."
Certified Grocers of California is installing an electronic receiving system, which begins with dispatch, takes the load through routing and gives the wholesaler instant response for receipt of product. Eggink said he believes that the new capabilities will give the wholesaler a broad look at fleet management while giving the ability to fine-tune specific logistics practices.
"Operating systems for organizations have been designed for routing, scheduling and utilization of equipment, but warehousing may not have been included, for example," said John Deris, director of business development for the food and beverage industry at Ryder, West Chester, Pa.
"Now the separate systems have to be linked for logistics departments to use the information. Upgrades are needed."
According to Deris, logistics executives are finding that no one vendor can possibly fill all the high tech needs and many are finding partners to marry all the component systems into one.
A specific area where integration is crucial for transportation managers is when tracking mileage on tractors and trailers and scheduling the equipment for preventative maintenance and inspection. Operators report that there is a shift from mainframe to network systems.
"These systems give us the ability to track either mileage or time and flag the equipment for inspection or service," said Kennon. At Viking, line equipment is slated for preventative maintenance at 24,000-mile cycles and at 10,000 miles for local equipment. Trailers are inspected every 90 days, as are converter gears. Biennial inspections of Viking terminals are conducted by the state of California.
Viking's maintenance control and management system has been in place one year. Introducing the program to non-keypunching transportation workers had its challenges, Kennon admitted, however within six months the wealth of information and the readability won crews over. Some administrative support still backs up the work in the yard to simply check to ensure that processes are updated on a timely basis.
The system also provides the ability to broadcast system-wide which equipment has been flagged for maintenance. "With the program, when a tractor is flagged each shop within the system has access to the information and it can be serviced at any center within our network," said Kennon. "We are using the system to develop standards and performance levels."
Operators additionally reported that the program enabled them to slash administrative time on several fronts by keeping control over parts inventories and handling.
Other high-tech support is being felt in the maintenance bays. As engines are becoming more and more computer controlled, mechanics are plugging in laptops to do diagnostic work. These smart engines are also recording performance including the number of panic stops and idle time, and reporting these to drivers.
These onboard systems give drivers an incentive to operate equipment properly, resulting in less trips to the maintenance facility.