BATON ROUGE, La. -- Associated Grocers, based here, is in the midst of several technology upgrades for its distribution operation aimed at boosting speed and efficiency.
Among the projects is the installation of a 2.4 gigahertz warehouse radio frequency scanning backbone foundation, an upgrade of its warehouse management system, installation of new slotting software, an upgrade of its fleet management system and an enhanced e-mail communication system.
"As a company, we try to keep up with the latest versions of the software and technologies that we are using," said Randy Fletcher, vice president, logistics and supply chain management, of the 235-store retailer-owned wholesale company.
"All of our efforts are driven by our goal of attaining a higher quality of service for our customers, delivering not only quality product but reasonable prices," added John Gillespie, vice president, distribution. "If we see the need and the opportunity for change, we are empowered to effect that based on our ability to demonstrate the return on investment, and we don't have to go through a lot of bureaucracy to make it happen," he said.
"We try to take advantage of technologies when they become available, and as they are proven to be effective," Fletcher said. "We don't like to be on the bleeding edge of anything, we like to be on the leading edge, and we try to position ourselves in that fashion."
The 2.4 gigahertz RF backbone foundation will replace a 900 megahertz system when it is installed later in the first quarter, Fletcher said. "The key factors are reliability, speed of response time and increased range of coverage." No vendor has been selected yet, however.
"That project is on the fast track and we are finalizing the cost and timetable as we speak. As soon as we get those final numbers, we are going to make a decision and move forward," he added.
The technological upgrades are being made following some recommendations from KPMG, New York.
The 2.4 gig has a much faster response time than the old system and allows for a broader coverage area, Fletcher said. For example, the company has a returns building about 200 yards from the warehouse.
"We will be able to establish a communications site there with our warehouse management system to scan returns and damaged products, and adjust our inventory in real time. So, the new system allows us to have a communications ability from gate to gate," Fletcher said.
Speed is another advantage of the new backbone foundation.
For example, if there are 10 or more forklifts working in the warehouse at the same time, there will be a delay in the RF response anywhere from five to 20 seconds, he said.
"With the 2.4 gigahertz, that pretty much goes away because of the broader band, and it is almost an instantaneous response for those updates."
The time savings over a week or a month is substantial, Fletcher said. "Therefore, your forklifts are more productive, as well as the other workers using the handheld scanners to do inventory updates at the pick-slot level, or scanning something to locate its slot. So it opens up the speed factor and gives you a much faster release time."
The wholesaler anticipates that the new system will be much more reliable. "The 900 megahertz system is somewhat antiquated and it has a tendency to get hung up. And when it gets hung up, you have to go through a process of bringing the radios down, turning the radios off, and then rebooting the system," he said.
With the upgrade of the Triceps Real-Time Warehouse Management System, from OMI International, Richardson, Texas, which was completed in late November, Associate Grocers has picked up more speed and efficiency, Fletcher said.
"The assignments that are sent via RF take time to be accepted by the RF units. This upgraded version reduces that time and takes idle time out of the day-to-day activity. It will also allow us to manage the shift start-ups' timeframe where we can pre-assign duties and tasks in advance of employees actually being there. So you don't have idle time when the shifts begin," he said.
The upgrade also allows the wholesaler to value its inventory on a daily basis for daily profit reports. "That is a financial goal that we have as a company," he said.
The Cairo Warehouse Optimization system, also from OMI, will be installed during the first quarter, said Fletcher. It will allow the wholesaler "to dynamically re-slot our warehouse and perform what-if scenarios based on parameters and criteria such as crushability, weight, cube, velocity or movement of product, family grouping, or, better yet, category in the store. So, as we select products, we can do so in a manner that gets them closer to the aisle that they belong to in a particular retail store," he said.
The wholesaler also plans to upgrade its FleetAdvisor fleet management system from Eaton Corp., Cleveland, during the first quarter.
"The FleetAdvisor upgrade is designed to give us speed of information, as well," Fletcher said. "It will reduce the response time for locating trucks within their routes, provide us real-time data that will allow us to see where those trucks are, as opposed to batch time, which is delayed. Eventually, it will enable our retailers to see where their truck is without having to ask us. We hope to have that available on a Web site, so they won't have to call our transportation department to ask when they can expect their truck."
Gillespie noted that late deliveries are not a problem with Associated Grocers -- the company has a 96% on-time rate for trailers reaching their first stops.
"It is not so much an issue of knowing if the truck is going to be there on time as much as just knowing where the truck is," he said. "In most cases, our trucks are there early." Earlier in 2000, the wholesaler developed an e-mail system to help employees working different shifts communicate more effectively.
"One of the problems you have in the grocery industry is that the people who work nights very often don't get the chance to talk with people working days, and there is a lot of miscommunications. The industry has always been challenged by the end-of-shift piece of paper, such as a transition report. We have developed end-of-shift reports that are transferred electronically through some Access databases that enable us not only to communicate the day's productivity, but also issues and concerns," Fletcher said. These messages go not only to the employees on the shift, but to all warehouse employees, "so that we keep everybody in the loop as to what is happening, and you always have the option to respond or not."
