Jan 1, 2008 12:00 PM, By David A Kolman
Throughout the years, Driftwood Dairy of El Monte, California, has faced many challenges as it has grown from a family dairy begun in 1920 into a business with $100 million-plus annual sales. The largest provider of milk to schools in Southern California, it serves more than 90 school districts, including the largest in that area - Los Angeles. It delivers to almost 2,500 schools daily, all of which have certain time windows for receiving.
Driftwood Dairy's expanding milk production and distribution includes hospitals, health care facilities, independent markets, restaurants, bakeries, coffee houses, foodservices, institutions, cafeterias, and other creameries. It also co-packs for other manufacturers.
Plus, it distributes a full line of dairy and related products. Among these: creamers and toppings, cottage cheese, cream cheese, yogurt, butter, margarine/oleo, assorted cheeses, eggs, juices, salads, dressings, mayonnaise, and breads. In total, Driftwood Dairy offers more than 800 SKUs (Stock Keeping Units) of products.
One of the dairy's most recent and daunting challenges was a total replacement of its aging straight truck delivery fleet - a hodgepodge fleet of 67 vehicles. Some trucks were more than 20 years. Many had accumulated more than 600,000 miles.
The fleet evolved over time as the dairy's business changed, says Bill Steiner, Driftwood Dairy's chief operating officer. Vehicles were added as needed, without there being any real plan for doing this. Several factors accounted for this situation.
One was that “family dairies, which have been around for many decades, have typically kept to the basic core group of dairy products - milk and cheese,” he says. “Then in the 1960s, with independent dairies merging and going into the more lucrative retail business, many got out of servicing schools. We went into that niche market and over time got better and better at it.”
Another influence on Driftwood Dairy was the societal change to people combining activities as a way to save time, says Steiner. For example, more and more people began eating behind the wheel. “It wasn't all that long ago that vehicles didn't come with cup holders. Now, cars and trucks come standard with plenty of them.”
This lifestyle change led to the development of more and more products being produced in single-size servings. “The market for smaller size packaging grew to be a significant part of our business,” Steiner says.
That, in turn, impacted Driftwood Dairy's transportation operations. “Trucks were added to the fleet when needed, without much concern for uniformity,” says Jeff Dolan, vice president of logistics. “Over time, we ended up with a very mixed fleet of vehicles, and that required us to maintain a huge parts inventory.”
“From 1985 to about 2005, our fleet was maintainable,” Clint Hammond, Driftwood Dairy's fleet manager says. The dairy operates its full service shop, body shop, and small fleet of road service vehicles.
“Around the 20-year mark, our trucks were requiring considerably more service,” he says. “Road calls for breakdowns became a regular occurrence. We had tow trucks that spent more time at our place than at their businesses. We had to keep spare trucks on hand for vehicles that were out of service.”
Big changes for Driftwood Dairy, situated on 11 acres of land about 15 miles from downtown Los Angeles, began in July 2006. That is when a group of investors purchased it from the Dolan family, who established the dairy.
A new management team was created, lead by Steiner and Kelly Olds, both veterans of the dairy industry. Olds serves as the dairy's chief executive officer. Also on the team are members of the Dolan family.
“As the transportation requirements continued to change, and the costs for operating the fleet have steadily risen, we realized we needed to upgrade our fleet with more efficient equipment suited specifically to our operations,” says Steiner. “We also wanted consistency across makes and models.”
The decision was made to replace the entire straight truck delivery fleet. This would be more than a $6 million investment.
“It took us about six months just to come up with a plan for standardizing our fleet,” says Allen Case, director of purchasing. “Surprisingly, many of the things we took for certain were questioned as we got into the process of looking in detail at where we make deliveries, how to do this most efficiently, and how to find one common vehicle that would fit all our requirements.”
Management got drivers and maintenance personnel involved in the process from the beginning. Various truck and body makes and models were brought in for them to check out.
“We looked at such things as turning radius, size, cab interiors, liftgates, type of body doors, interior body lighting, suspensions - just about everything you could think of,” Dolan says.
“We wanted those who do the driving and maintaining to have a say,” adds Case. “We considered their collective experience and wisdom very important to the equipment decision-making process.”
After much consideration, Driftwood Dairy decided to purchase 56 2008 conventional Model 338 Hino Trucks. With a gross vehicle weight rating of 33,000 pounds, the trucks require a Class B commercial driver license.
Thirty-nine of the trucks are dedicated to school deliveries. The other 17 are used for the dairy's wholesale business.
The new trucks are powered by a 260-horsepower turbocharged and intercooled Hino diesel engine that produces 585 pound-feet of torque. The engine is mated to an Allison 3000RDS automatic five-speed transmission.
There is an exhaust brake and cruise control. The interior has air-ride cloth seats, AM/FM/CD player, and air conditioning.
“Once the decision was made to purchase Hino Trucks, we needed to choose a dealer to partner with on this project,” Case says. “Dealer selection is an often overlooked aspect of a fleet purchase, yet the dealer plays a major role in fleet implementation.
“We chose Carmenita Truck Center of Santa Fe Springs, California. It is a long-term vendor to Driftwood, and the excellent service levels this dealership has provided us over the past 20 years was a major factor in our decision process.”
Forty-five of the new Hino Trucks got refrigerated bodies built and installed by American Truck Bodies of Fontana, California. The 22-foot bodies have a smooth aluminum outer skin that provides a clean surface for decals.
Inside each body is a custom product rack, ribbed aluminum dairy floor, two E-tracks in the sidewalls with custom cargo straps for securing loads, and strategically placed fluorescent lights for optimum interior lighting.
Each body has a Todco 42-inch rollup curbside door, below which is mounted a Waltco 1291 medium duty liftgate with a 2,000-pound capacity. The liftgate's 23-by-41-inch platform can fit two stacks of milk cartons along with a driver, or three stacks without the driver
The full rollup insulated rear door also is from Todco. It has an inside safety release. There is a rear step bumper configuration. Grab handles are located on each side of the rear body frame.
The old trucks had a center rear door that slid open and a swing-open curbside door.
“The doors on the American Truck Bodies have sensors that shut the refrigeration unit off when the doors are open,” says Hammond. “Blowing cold air outside sucks in heat.”
Driftwood Dairy opted for Carrier Transicold Supra 750 refrigeration units with electric standby. With this capability, the unit's engine can be shut off when it is plugged into an electric power supply. This is done when the trucks are being loaded and when loaded trucks are parked.
The Supra 750s feature a microprocessor control system and have Carrier Transicold's Cab Command in-cab controls and display and Automatic Start/Stop fuel saver.
Milk and milk products must be maintained at temperature between 33° and 42°F, says Dolan.
“Because refrigerated, as well as some frozen products, are delivered to about half our account, we needed to find a way to manage this on our trucks,” he explains. “We determined the best method was to use Bonar Polar Insulated Containers.”
These are specially compounded plastic containers on wheels that have a built-in special refreezable liquid inside.
“If we had spec'd our refrigerated bodies with a freezer compartment we would have wasted space,” notes Hammond. “Not all of our trucks go out with frozen product all the time. We're also saving a lot of money because we had been packing the frozen products in dry ice.”
The other 11 new Hino Trucks received refurbished bodies, brought to the new specifications by The Spray Booth in Bloomington, California. These units each have a 3,500-pound capacity Maxon Tuk-A-Way rear liftgate with a 41-by-93-inch platform.
All 56 of the new Hino Trucks have been wrapped completely in custom high performance vinyl graphics by Avion Graphics, a full-service commercial fleet graphics company in Foothill Ranch, California.
“We wanted them to look sharp because each of our delivery trucks makes hundreds of visual impressions every day,” says Steiner. “We chose Avion Graphics because the company is also experienced in airline markings, so we knew our new graphics would be very durable and long lasting.”
Along with updating Driftwood Dairy's fleet, the management team modernized the company's graphics and its company mascot, Drifty the cow. The dairy got its name because when it would rain, the river that runs behind it would often flood, depositing driftwood on the dairy's property.
The transition of the straight truck fleet took about 12 weeks.
“With the capacity and efficiencies afforded by the new trucks, we were able to reduce our delivery fleet by 11 vehicles, and reduce the number of mechanics from 19 to 12,” says Hammond. “Because all the trucks are the same, we can now put any truck on any route. Before only certain trucks could be used for certain routes.”
“Part of the cost justification for replacing the fleet was improved fuel mileage,” Steiner says, “and we've been getting great mileage with the new Hinos. The fleet upgrade couldn't have come at a better time, considering the cost of fuel these days.”
Driftwood Dairy's fleet also consists of an assortment of 13 daycab tractors, in both single- and tandem-axle configurations. Models include Freightliner, International, Mack, and Volvo.
There are 20 refrigerated trailers, with both Carrier Transicold and Thermo King refrigeration units, and 10 dry 48-ft trailers. These are used for storage and transport of non-refrigerated supplies and empty milk cases.
The main trailer suppliers are Great Dane and Utility. The dairy's older trailers are slowly being replaced with newer models. All new equipment gets the new graphics.
Most of the refrigerated trailers are 48 feet long, but there are some older 24- and 28-footers. “We first started using small trailers when we picked up the LA school district,” says Dolan. “There was too much volume of product to fit on our straight trucks and be within legal weight limits.”
Driftwood Dairy's fleet also has five 48-ft Walker stainless steel tank trailers and two Semo Tanks trucks. These are used for bulk deliveries to places such as bakeries, candy companies, and ice cream companies.
All trucks have backup warning devices.
In addition to its company-owned fleet, the dairy has 30 independent contractors that work their own routes. Some still make home deliveries.
Driftwood Dairy assigns its 78 drivers to routes rather than equipment. Drivers are provided with uniforms and all carry Nextel phones. The company is investigating the Navtrak GPS-based fleet management system.
“We're testing Navtraks on 10 of our trucks,” says Dolan. “We've begun tracking vehicle information, such as location, engine status, speed, fuel usage, refrigeration temperatures, and door openings and closings - in real-time.
“One of the nice things we've discovered about Navtrak is that it generates reports detailing specific information about these 10 trucks' daily activity. Particularly helpful are the exception reports.”
The dairy's management team also is considering routing software. At present, it does its routing by hand.
“We plan a route and then diagram it to get an idea of how long it should take to run,” Dolan explains. “Three times a year we sit down and review traffic flow and all our routes. Our goal is to try and send our trucks out against the grain of traffic, and at the less congested times.”
That's no easy task, remarks Hammond, as the Los Angeles area is consistently ranked as having the worst traffic congestion in the nation.
Driftwood Dairy's plant is split into two sides. One side is for the raw products - raw milk, condensed milk, skim milk, cream, juice, and sweeteners. The other side is where these products are finished and packaged. “We have our milk and milk products from the cows to the shelves in less than 48 hours,” says Case.
The dairy no longer has cows. Its last herd was sold off in 1972. Instead, it buys milk from milk cooperatives.
“Our supplier is the Dairy Farmers of America,” Steiner says. “They work with hundreds of individual milk farms and ranchers to supply us milk on a very consistent basis.”
On a typical day, up to 25 tanker trucks unload raw product at the double receiving bay, says Michael Messier, Driftwood dairy's logistics manager. These products are then worked (processed, pasteurized, homogenized, flavored, etc) into finished products. Fourteen filling lines handle paper and plastic containers of all sizes and shapes - from four to 128 ounces. The plant, which operates seven days a week, produces milk, milk products, juices, drinks, and water.
Four-ounce flexible polyethylene milk pouches from DuPont Liquid Packaging Systems have become extremely popular with grade schools, says Case, and also with grade school children. “They enjoy poking a straw into the pouch to drink the contents. For the schools, the pouches are cost and space effective, as they take up less space than a traditional four-ounce milk carton.
Ninety pouches are packed into one crate, compared to 60 gable top milk cartons.
Driftwood Dairy has been updating and modernizing its plant, and is utilizing technology to improve its manufacturing efficiencies. It produces between 1.6 to 1.7 million containers per day.
It has become the largest producer of milk pouches in the country. It has eight lanes for making this product and produces 700,000 paunches per day.
The plant has a Shikoku Model 240 filling machine, one of only two in the nation. It can fill 400 paper half-pint cartons every minute.
Completed liquid containers are automatically packed into milk crates, says Messier, which are then machine stacked six high. The stacks are moved via an in-floor driven conveyor belt into the refrigerated storage area or into one of the 15 refrigerated 48-foot storage containers. Four of these containers are used for storing the loaded Bonar Polar Insulated Containers.
All of the storage containers are equipped with Carrier's ThinLine container refrigeration units.
“Being an older facility,” Case says, “we lack cold storage space so we occasionally need to use refrigerated storage containers. We're in the process of retrofitting some of the plant for additional cold storage.”
With the new California regulations going into effect that mandate reduced emissions from transport refrigeration units, Driftwood Dairy has converted its storage containers to electric power.
The refrigerated storage areas are also where others products, such as cheeses, yogurts, and eggs, are kept, says Messier. “These products came about as piggyback business. The milk truck usually shows up several times a week, so we figured, why not carry other products?”
Customers' orders - for the most part full crates - are picked, stacked six high, and moved on the floor conveyor to the double-sided loading dock. The dock has space to load 26 trucks on each side at one time. Loaders slide the crates off the conveyor and into the trucks using a long J-hook.
The loads on all route trucks are organized alike, with the same product in the same area. Some trucks carry about 15 extra cases of products to replace any damaged items.
A school route typically will have 12 different SKUs; a wholesale route will have around 200. Deliveries are made six days a week, Monday through Saturday.
Before starting their deliveries, drivers check their loads, then load and secure any Bonar containers with frozen products. Depending on the route, some trucks may have more than one container; some may not have any.
Upon their return, drivers first off-load empty milk crates picked up at each delivery stop. Then they drop off any returns or bad product. Next they unload any Bonar freezer containers.
The truck body or trailer is then swept out and washed. Following this the drivers fuel their truck and then spot it either at the loading dock or in the yard.
School routes are run on a “doubles” operation. One driver makes his deliveries, after which the truck is reloaded and another driver takes it out for deliveries on a second route. The first routes go out from 1 am to 5 am. The second routes go out beginning around 11:30 am.
Each truck typically averages about 300 cases per route per truck and makes 20 to 30 deliveries, basically within a 150-mile radius. The average loaded milk crate weighs 50 pounds.
Some 30,000-plus crates of milk are delivered to schools on an average day; about 165,000 crates per week.
Driftwood Dairy's drivers are unionized and paid hourly. Drivers bid on routes based on their seniority, when they open up, which isn't very often, says Steiner. “There is a tendency for a lot of drivers to stay on their routes. The dairy business has historically been one where your milkman shows up on a regular basis, you get to know him, and he gets to know you and what your dairy needs are.
“Milk delivery has changed considerably over the years, because dairies are now are selling to hospitals, institutions, schools, stores, retailers, and so forth. However, that personal connection with the milkman is a proud tradition that continues.”
Driftwood Dairy has a big dependency on schools, which are open only nine months of the year. “Our business drops off when schools recess for summer,” Steiner says,
Consequently, it has seasonal drivers. These are full-time drivers who work school routes, take the summer off, and return to work when school resumes. “It's a lifestyle choice,” he says.
The dairy's driver turnover rate is very low.
“Being a milkman in Southern California is a sought after position,” says Dolan. “Not only do milkmen have a good reputation, it is one of the higher paid teamster driver jobs. We're always getting drivers inquiring about openings, as do our drivers.”
“We are changing our way of thinking, away from that of a small family business to that of a business that makes beverages and has the refrigerated capacity to store and deliver these products,” says Steiner. “We have a plant and infrastructure that is capable of running any type of beverage.
“That creates many exciting opportunities for us because the one thing Americans love is variety. We like to have new and different. Do you realize that the average grocery store carries more than 40,000 different items?”
Along with becoming an organic-certified dairy, Driftwood Dairy has been developing a variety of new flavors of milk, including orange splash, chocolate raspberry, cookies and cream, root beer, and bubble gum. It is also working on protein drinks, soy milk products, and products for consumers looking for healthier products.
“We probably are presented with 10 opportunities a week with people coming in and saying we've got an idea for this product or the other,” Steiner says. “And we're constantly looking for products to add to our portfolio.”
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