With retailers increasingly demanding greater frequency of product deliveries, transportation systems that help plan the most efficient routes and load combinations, as well as onboard computers that track and manage driver activities, have become essential tools for handling logistics today.
Retailers use routing and load-planning systems to create plans that result in less mileage, shorter routes and more cubes and weights loaded into the trucks. After a driver's tour of duty, onboard computers can download the data into the retailer's host computer system. This system takes the data and feeds it into the routing software.
With information about what should have happened and what did happen resident in the same database, a retailer can refine the routing process. For example, the software package may allot 8 miles for a particular trip but the driver traveled 12 miles. Adjustments allow for a cleaner data set upon which to draw up the next day's plan.
Separate from its ability to tie into planning, onboard computers are used to track the efficiency of the driver and the tractor.
"Our payback on onboard [computers] is more on efficiency of the equipment and less on the efficiency of the driver," said Mike Bargmann, director of distribution at Wegmans Food Markets, Rochester, N.Y. He said Wegmans tracks data related to engine idling, speed and revolutions per minute on the tachometer.
"The onboards we purchased were paid back in less than a six-month period. It was a great investment," he added.
Winn-Dixie Stores, Jacksonville, Fla., installed onboard computers for 1,100 tractors hauling perishables, dry grocery and general merchandise. Tracking the efficiency of the driver and tractor has been a valuable source of information.
For example, if the driver is taking a different route that is taking longer, Winn-Dixie is able to see that and correct the situation. The system also records driver stops and lost time.
"When a tractor gets only seven miles to the gallon on diesel fuel, a driver can't waste any time," said Ray Gordon, director of warehousing and transportation. "This system keeps track of that."
Winn-Dixie's move to onboard computers came after successful usage of a truck routing system for marrying outbound freight, which has been in place since the early 1990s. The retailer saved 15% of transportation costs including fuels and mileage the first year and continued to save thereafter, though to a lesser amount, Gordon said.
Now Winn-Dixie is looking at routing systems for inbound freight, which will be implemented in 1998.
This ongoing shift to more computerized systems in transportation is rooted, in part, in the changing dynamics of the business, particularly in reduced inventory levels in the warehouse and customer service.
One Midwestern grocery retailer, who requested anonymity, speculates that the inventory, which was reduced by 40% in five years' time while stores and sales were growing, could be reduced further with routing and load-planning software. The chain is currently evaluating software options.
For example, if the retailer could plan routes and loads even more efficiently, it could increase the amount of product it cross docks, thereby decreasing inventory while getting the product to stores quicker.
The retailer also said tracking and management systems for drivers would enhance operations further and is also under review.
While many retailers are looking to keep inventories to a minimum, they are also faced with stores' increasing demands in terms of frequency of service, in efforts to reduce inventory in the back room and improve in-stock positions.
To serve these stores without increasing costs for equipment and miles associated with the deliveries, routing and load-planning software is being used to help plan the most efficient routes.
"It used to be OK for the store to get one truck at 7 a.m., but now [retailers say,] 'I want my produce at 7 a.m., my dry grocery at 7 p.m., and by the way, I want my meat at 10 a.m.,' " said Mike Frank, vice president of distribution at Associated Wholesale Grocers, Kansas City, Kan.
He said routing and load-planning systems that help deliver food at different times mean that it's handled less by the store, saving costs, and is also the freshest quality possible.
Associated Wholesale Grocers uses routing software for outbound loads in perishables, dry grocery, produce and general merchandise at its three warehouses. Frank said at its Kansas City, Kan., warehouse, for example, which has 96 tractors and 187 trailers, the routing software reduced the order cycle time from nine hours to seven hours -- or by 22%. The order cycle time is the time that transpires from when orders are placed and when the product is available for dispatch.
Once the driver completes delivery, the data is uploaded from the onboard computer into Associated Wholesale Grocers' host computers so that it can compare planned and actual data. The onboard computer systems were installed last year.
Another Midwestern grocery retailer, who also requested anonymity, said it is currently implementing both inbound- and outbound-routing software for perishables, dry grocery and general merchandise, which affects more than 10 warehouses. With inbound up and running, the retailer has seen the biggest improvement in freight costs.
This retailer is also installing onboard computers for its private fleet with the intention of accessing information about inbound and outbound freight, tracking of equipment and fuel tax reporting.
Gary Watson, director of transportation and logistics at Hannaford Bros., Scarborough, Maine, which has more than 100 tractors and 250 trailers carrying grocery, frozens, perishables and general merchandise, said it is at the preliminary stages of evaluating onboard tracking and management systems.
Hannaford, though, is much further along on outbound-truck-routing systems, and is implementing a second generation of the software to improve the routing process to service its retail stores. Routing software for inbound loads has not yet been implemented.
"We're hoping to achieve improved efficiency of outbound through better cube utilization and minimized mileage between runs," Watson said. "On the inbound we're trying to match the inbound over time to the outbound loads with a minimal amount of [extra] miles to get at the inbound-origination points."
At Wegmans, the retailer is forging ahead with new inbound-fleet software. The system should help Wegmans find consolidation opportunities with inbound freight so that it can marry loads together in locations around the country.
The retailer experimented with software in frozens and produce, and was to be fully functional last week. All other operations, including dry grocery and general merchandise, will follow. The consolidation opportunities are heavily weighted in the general merchandise area because that is where there are a lot of the less-than-truckload shipments.