Wholesalers are using computerized technology to turn unpredictable transportation systems into something close to an exact science.
Escalating costs and inefficiencies are often cited as two areas of immense concern among wholesalers. But now the industry is using new technology, in the form of enhanced software programs and hardware systems, to help boost efficiency in a wide range of areas, including truck routing, scheduling, receiving and loading.
"We're just scratching the surface," said Mark Foster, manager of transportation at Associated Grocers, Seattle. "From a transportation perspective, we may be ahead of some other [wholesalers], but we are still far behind where I want us to be."
Associated currently uses a computerized routing system to monitor and plan its delivery routes, a program designed in-house that tracks dispatches and on-time arrivals, and a trip-recording device installed in each truck.
"The devices record drivers' hours," Foster said. "But we also use them to record data for analysis of our transportation operation. We record the pallets delivered and picked up."
Use of the routing program has revolutionized Associated's daily loading operation. "We optimize the routes every day," Foster said. "We look at the volume coming down, the stores the product is going to, what fits on a truck. It will optimize the driver time.
"We use the package to determine the most efficient routes that still meet the guaranteed delivery window to the stores," he added.
After routes are determined at the office level, the system creates a document for each driver. "The document goes to the loaders, who use it to search the dock for the product and verify it," Foster said.
Fleming Cos.' Kansas City, Mo., division is hoping that when a similar routing program is rolled out this fall, the precision of its distribution system will be enhanced.
"The system will give us better routing," said Dave Adney, manager of transportation. "It will cut miles, tell us how long a driver should be at a store -- how long it should take him driving at a certain speed to go to each store. It should cut out some hours for us that we have no control over right now."
The system, which has been rolled out with "positive" results in Fleming's northern California and San Antonio divisions, literally maps out a driver's route. After the distribution staff prints out the store orders for the day, the program creates diagrams and maps that show the optimum route a driver should take.
"The map will tell the driver where he's going, the sequence of order," Adney said. "It tells him what route to take to go to each store, how long it should take to go that store and how long the delivery should take."
A wholesaler, who asked to remain anonymous, said his chain plans to roll out a routing program in the hope of gaining cost reductions in both miles and routing staff.
"We hope for cost savings and increased efficiency," said the source. "From what I've seen so far, [savings] will come from less miles traveled. We have a large routing staff and we hope to cut that down some. We anticipate saving a substantial amount."
Routing programs have had the most impact on wholesalers with many complex truck routes in which the routes change on a day-to-day basis based on individual store sales volume.
Distribution systems that involve a high percentage of fixed routes, on the other hand, in which the same truck goes to each of the stops regardless of sales volume, have seen more moderate savings from implementing computerized routing systems.
McLane Co., Temple, Texas, which has a high percentage of fixed routes, uses its routing system mainly when the wholesaler needs to change truck routing schedules to accommodate seasonal order increases.
"We work in a fixed routing situation and use our routing program only for seasonal reroutes," said Terry McElroy, vice president of distribution and operations. "It is also used to accommodate new business we secure, which, depending on the division, could be quite often," he added. Since a majority of delivery routes for Super Rite Corp., Harrisburg, Pa., are fixed patterns, a routing system has so far not been seen as a necessity.
"We don't have a situation here where we just dump everybody's orders into a pool and have them routed," said Fred Watson, manager of transportation. "Our schedule is set and there's enough consistency that we can fill trucks on a consistent basis without having to reroute them every time we go from one week to the next."
Super Rite, though, uses a computer system to automatically create route schedules, based on the predictability of its distribution system. "We have a computerized system into which we have programmed our delivery schedule. When orders come in, they are referred to the trip, date and stop that the delivery would go to," he said.
"All we do is monitor that everything looks OK -- cubes, weight, pieces and all those kinds of things -- and away it goes."
Use of the system allows Super Rite to make changes and review routes much faster. "There weren't as many steps to go through in order to change point A to point B," Watson said. The result has been more flexibility and a reduction in transportation hours.
Spartan Stores, Grand Rapids, Mich., has used its routing package to substantially reduce the number of trucks needed.
"We have seen some extraordinary benefits in the reduction in the number of loads because of the way the program fills trucks," said Pete Lima, transportation manager. "The system has two main functions: to fill the trucks and to make sure you never route so that you're late to a retailer.
"We saw some real gains in the number of trucks outbound here because it just packaged them so much more efficiently," he added. Spartan's system features a data base that creates truckloads based on order size, geographic locations and scheduled times retailers expect orders to arrive.
"The algorithms built into the system calculate all these things," Lima said. "We set parameters, such as trailers do not exceed 'X' amount of cube, so that the system knows how much it can put into a trailer. Based on that, it packages your loads for you."
As soon as Spartan implemented the system, it managed to reduce the number of trucks needed daily. "Initially we saw somewhere between 10 and 15 loads per day less, just because of the way the system packaged them," he said.
At Spartan's Grand Rapids headquarters, for example, the number of trucks used per day was reduced from 125 to 104. "When you reduce the number of loads, you're obviously using fewer drivers and you don't need as much equipment," Lima said. "Today we're doing more business with fewer trucks.
"We used to operate on a schedule where a certain store got a certain load at a certain time every week. But we didn't have enough people to look at each load, so some trucks were going out half-loaded, one-third loaded, because that's the way it went every week," he said.
Future uses of routing technology look to be even more comprehensive. For Associated Grocers, the main goal is a move to satellite technology that will allow the wholesaler to track the position of each of its trucks.
"I expect in a year we'll see drivers with handheld [trip-recording] devices replacing the hardwired devices we have now in the trucks," Foster said. "They'll be equipped with bar code capability and global positioning technology. That's our plan."
Drivers would use the handheld readers to bar-code products off and on the truck. "When you pick up products and come in, whether it's backhaul product or store product coming back in, you can bar-code it on the truck," he said. "So before the truck has arrived, warehouse operations will be able to view what's on the truck," he added. Satellite technology will also eliminate the need to print routes, because headquarters will be able to simply download routes into the handheld readers in each truck. "If a driver was late in his route and wasn't going to make his stop, the device would signal him that due to his current speed and position, he's not going to be on time and had better call in."
As a driver nears the next stop, a signal also could be sent to prepare the retailer's receiving department. Foster said all the technology exists now to implement such systems. "One of the struggles we've had is getting the various components to come together," Foster said. "The idea of combining handheld technology with routing software, which will put in a latitude-longitude data base for each of your customers, is fairly simple to do. It's just that no one has brought it all together in one device."