There's gold in them thar trucks!
Supermarket companies are finding hidden treasure in their transportation operations by integrating available technologies into a smooth and seamless process.
"The holistic approach to operations is a must," said Joe Andraski, an industry consultant and senior vice president of OMI International, Schaumburg, Ill.
"Cutting costs is key today. Higher fuel and labor costs and an exhausted labor pool will each require greater efficiencies to pick up the slack ... Through technology, it can be determined what activities play a role in consumer take-away," he said.
Food distribution operators such as Supervalu, Shaw's Supermarkets and Hannaford Bros. are among some of the companies using the latest technologies to bring the transportation processes together to better control costs and make fulfillment efficient. Supervalu, Eden Prairie, Minn., expects to gain 20% in truck cubing and raise its on-time performance from 99% to nearly 100% through its operational initiatives, said Mark Foster, Supervalu's vice president, supply chain.
"The strategic position we are taking, as we look at technology, is how it can be applied to our customers' needs," he said. "From an operational standpoint, we look for the best-in-class and best-in-practice [technologies]."
Supervalu's goal is to use the latest software and all its capabilities to manage its transportation. "For example, we have a routing solution in place. We want to make sure that we have the most recently updated edition and that we are putting to work all the power of the program," said Foster.
The wholesaler is working toward taking specific functions, including transportation, and migrating each component into a whole solution. "We look at best-in-class systems and bridge them together," explained Foster. "Where there was once one package for dispatch, one for inbound, one for outbound, we are bridging together the best-in-class solutions to create visibility in the pipeline without stop measures."
The result is more information that was previously unavailable, hidden or exceedingly challenging to obtain.
"We want to see trends and correlations between the elements. Whether it's cost reduction, performance improvement or quality improvement, they all have a technology touch point. What was once a one- or two-day process [in gathering information] can now be achieved in one hour," he added.
This holistic approach means that for Supervalu's customers, information is available in real time, and gives the wholesaler the ability to spot trends and examine core data. "Customers have visibility of the pipeline, giving them the opportunity to reposition in-store personnel. They have visibility of the product in the order process. We continue to use activity-based accounting. The system gives our customers the ability to better cube out a truck, for example. It gives them the ability to control costs from their end," said Foster.
"In today's environment, you can't manage what you can't measure," said Richard Kochersperger, director, Food Marketing Group, a Wallingford, Pa.-based consultancy group. "Retailers and wholesalers need dynamic information and most companies do not have that. They have to piece the whole thing together. You have to get a scorecard. It's a requirement to do business."
One of the efficiencies operators are seeking to control is inbound freight. Shaw's Supermarkets, West Bridgewater, Mass., has recently put into test a hosted inbound solution to gain visibility over their produce logistics.
The process will be automated using an inbound routing guide that will streamline the scheduling process. Once the inbound loads are tendered, Shaw's dispatchers will have full visibility of logistics events with alerts sent to a browser, personal digital assistant or mobile phone.
"By bringing increased efficiencies to our carriers and food suppliers, Shaw's continues to improve strategic partnerships while increasing visibility to our entire network," said Michael Griswold, Shaw's strategic process leader, supply chain.
Hannaford Bros., Scarborough, Maine, will also shift to a Web-based service to manage its transportation this spring (see "Hannaford Installs Electronic Logistics," Page 23).
The controls gained include visibility from the time an order is placed until it is received at the chain's warehouse, according to Rich Zaffarano, director of supply chain services. Outbound transportation for stores and distribution centers are also included in the new program.
Every penny saved is important in today's competitive environment, operators report. As a result, technological applications have emerged as a linchpin to smart business.
"We recognize there are not many things we are able to accomplish without information technology," said Foster. "Technology dependencies are enabling us to make the processes better to service our customers."
