Andrews goes to school
Jun 1, 2005 12:00 PM, By Gary Macklin
Foodservice distributors often describe their customers as hotels, restaurants, and institutional feeding locations. Andrews Foodservice Systems in Pueblo, Colorado, might be more likely to place institutional customers at the top of its client list. More than half of the business goes to institutions while the remaining 40% is delivered to restaurants.
Most of the institutional customers are schools; others fit into a completely different category — penal institutions. Andrews Foodservice serves the state prison system in Colorado as well as federal facilities. The federal maximum-security facility in nearby Florence, Colorado, known popularly as Supermax and home to the Unabomber and Terry Nichols and the last permanent address of Timothy McVeigh, receives a weekly order. “Those guys actually eat pretty well,” says George Andrews III, president.
Delivery to Supermax is a little different from other distribution stops in the company network. The prison is about a 45-minute drive west of Pueblo, a modestly sized city of 98,000. Because the facility has such high security, delivery is made to a warehouse off-site from the actual prison. In general, delivery to correctional institutions is a full load. The business is based on annual contracts secured by competitive bids.
Starting with peaches
Concentration on institutional sales is simply the most recent change in a long line of evolution at Andrews Foodservice. In fact, the company began operation in 1926 on a street corner sidewalk in downtown Pueblo where George Andrews and Joe Andrews, grandfather and great uncle of the current president, sold peaches. At the time, there were 11 produce houses in Pueblo. The distributors would buy rail cars of fruit and vegetables for local distribution.
The reason for the high concentration of distributors in a small city was its isolation. The world stopped at Denver, Andrews says, and Pueblo fell into that gap between Denver in the north and Albuquerque far to the south. At that time, Colorado Springs, now a fast-growing city, was probably smaller than Pueblo, which was more important to the Colorado economy, because it had a thriving steel industry and provided a shipping point for cattle from local ranches.
Andrews Foodservice remained in the produce business exclusively until 1975 when groceries, both dry and frozen foods, were added to the product line, allowing the company to become a full-scale broadline distributor. General foodservice distribution rapidly took over to the point that frozen foods now account for 55% of the business.
Since 1975, the company has done business in just about every mode possible, Andrews says. At one time, produce distribution to a small retail grocery chain provided the bulk of business. The company also once served a chain of convenience stores that spread across the Plains and Western states from the Canadian border south into New Mexico.
More compact trade area
The trade area now is much more compact, taking in all of Colorado but the Western Slope of the Rockies, communities along the southern edge of Wyoming, and northeastern New Mexico all the way to the Oklahoma state line with most of the deliveries concentrated in Raton and Cimarron. As far as mileage is concerned, the fleet runs about 220 miles north to Cheyenne, Wyoming, 150 miles south to Cimarron, New Mexico, and 270 miles across Colorado to Durango.
This trade area places the company in direct competition with the big, well-known houses in Denver, including Sysco, US Foodservice, and Shamrock Foods. The ability to compete with these deep pockets hinges on location and service, Andrews says
In 2000, Andrews Foodservice Systems purchased its lone remaining competitor in Pueblo. At the time, the two companies were such fierce competitors that they had few customers in common. With the purchase of the competitor, Andrews Foodservice gained its entry to the public school market. That offered the company a tool for leveling the business cycle, Andrews says. “Receivables from restaurants can be critical,” he says, “because new restaurants pop up and then go out of business with little or no warning, sometimes leaving the distributor waiting a long time to be paid. Even though schools mostly operate only nine to 10 months a year, the business is stable. That stability is enhanced by the few districts that operate all year round.”
Schools provide heavy volume
Schools represent heavy volume when class is in session. Andrews Foodservice serves CCStar, a cooperative of school foodservice operations in Colorado, on a 10-year contract. The cooperative is responsible for more than 50,000 meals a day. The company also serves metropolitan school districts including Denver and Jefferson County, which is the rapidly growing suburban area south of Denver. The Denver school system has 154 schools and serves more than 46,000 meals daily for breakfast and lunch. The Jefferson County district has 148 schools and a total of 85,000 students who require more than six million meals annually.
With institutional distribution coupled with street restaurant business, Andrews Foodservice has almost no slow season anymore. “In the past, we would ask our people to schedule vacations during the summer when we needed fewer workers,” Andrews says. “This year, we hit on a different solution. We are using our fleet as an internal truckload carrier, hauling freight outbound from Colorado for third parties and returning to Pueblo with product for the warehouse. The plan is to make our fleet earn its keep while distribution is a little slower, keep our employees working, and cut inbound transportation costs, all at the same time.
School orders differ markedly from typical restaurant orders, because schools receive delivery only once a week. While the company would like to have 48 hours advance notice for orders, the practical cutoff is 2 pm on the day prior to delivery. Regardless of delivery frequency, the foodservice industry operates on a short cycle that caters to customer needs with orders changing almost right up until a truck leaves the dock, Andrews says.
Full loads, multi stops
Deliveries to schools vary widely. Some districts operate central receiving facilities that can take a full 53-ft trailer load at one time. Other systems need delivery made directly to the school site. Such individual deliveries can add up to 10 stops per trailer. “Ten stops in a day is about all a driver can handle,” says Paul Montoya, operations manager.
Delivering directly to schools requires great care, Andrews says. “School systems have extensive rules about how we can operate equipment on school property,” he says. “They try to take deliveries at times when students are not present on the grounds. If we have to deliver during school hours, our drivers and school personnel go to great lengths to keep children away from the trucks and out of the drivers' blind spots.”
Serving the customer base became easier in March 2004, when the company moved into its new distribution center that has 100,000 sq ft for storage and order selection plus 8,600 sq ft for offices. The warehouse is divided into 36,000 sq ft of freezer and cooler space and 64,000 sq ft for dry groceries.
Andrews Foodservice is moving carefully toward a complete paperless warehouse and delivery management system. “We have already implemented a radio frequency management system for receiving,” Andrews says. “How to manage the outbound side of the business is still under discussion. We may decide to use a voice-directed order selection system. Whatever the final decision is, we're sure that paperless delivery is the ultimate goal. We want to make sure we handle our inventory correctly at receiving and that we get outbound orders right. Paperless delivery with automatic credits to customers at the delivery point will make the business more efficient and allow us to improve profit margins with less administrative effort.”
High mileage fleet
Although the trade area is smaller today than when convenience stores were part of the customer mix, the Andrews Foodservice fleet still averages relatively high mileage — from 100,000 to 120,000 miles per vehicle per year. About half the company routes can be completed in one day, and the rest finish on the afternoon of the second day. For a company that runs a large number of overnight routes, Andrews Foodservice operates only one tractor with a sleeper berth.
Andrews says he wants drivers in a hotel at night, and the company pays for rooms. The hotel bills and the additional restaurant meals that go with a room for the night are worth the expense, he says. “I want drivers to have a good night's sleep and a shower before they start meeting customers after a layover,” Andrews says. “The drivers are our closest contact with customers, so I want them at their best, looking their best. They have uniforms, and we want them to represent the company as well as possible.”
Drivers operate a relatively small, but widely varied fleet of 17 power units and 20 trailers. Three small straight trucks, two with 14-ft bodies and one 16-ft box, are used for short-range and city delivery. Two single axle tractors pull short delivery trailers, and 12 tandem drive tractors handle heavier trailers ranging from 36 to 53 ft in length. The trailer fleet shows the most diversity beginning with four 28-ft refrigerated vans, two 36-footers, three 40-ft boxes, two 45s, four 48s, and five 53-ft vans. All the trailers are equipped for multi-temp delivery and have been since the mid-1980s.
Big operating change
“We've had an interesting change in operating strategy over the years,” Andrews says. “I became operations manger in 1986. At that time, my father was president and he said we would always own our fleet and that we would never run tractors and trailers. We still own those three straight trucks and all the trailers. We now lease all the tractors.”
In 2000, the company began to switch the trailer fleet from traditional multi-temp compartments to center dividers from FG Products. “Our loads are 40% frozen and 60% chilled and dry,” Montoya says. “We put the frozen foods in the streetside compartment, which is cooled by the primary evaporator from the host refrigeration unit. Chilled and dry goods go in curbside compartment, which has two remote evaporators, one near the nose and another four pallet positions inside the rear door. Right now, we're only using two different temperature zones, but the trailers have the capability of three compartments.”
New Utility 3000R trailers are built with side doors immediately behind the nose on both sides. Originally set up for the convenience store customer, trailers with side doors offer particular flexibility for delivery at small restaurants. Most school orders are pulled out through the rear door and down a R•O•M RoadwarriorR delivery ramp. Most school orders amount to at least 100 to 125 pieces. Trailers have three-panel rear doors so that only the center section can be opened during delivery stops to help maintain product temperature, Montoya says.
Tractors are held on lease from MHC Kenworth, the PacLease franchise in Denver and Colorado Springs. Single axle tractors are Kenworth T300s with 3126E Caterpillar engines rated at 250 horsepower and six-speed Eaton Fuller synchromesh transmissions. Eight of the 12 tandem tractors are Kenworth T800s with Cat C15 engines rated at 475 hp driving through 13-speed Roadranger transmissions and Dana Spicer DSP40 tandem axles with a 3.55: final drive ratio. The remaining four tractors are Freightliners placed on the MHC lease from a previous lease.
Tractor specifications are essentially left in the hands of MHC. “We don't try to write vehicle specifications,” Montoya says. “We tell PacLease what we need and depend on them to provide equipment that meets those needs.”
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