New electronics extend management reach
Jan 1, 2004 12:00 PM, By Gary Macklin
In an industry where the costs associated with drivers can range from 55% all the way to 70% of total costs, managing driver productivity takes on critical importance. Some experts say that drivers in wholesale grocery distribution average nearly two hours per day of non-productive time — and that's in the efficient companies.
With new federal hours of service effective since January 4, 2004, managing driver time has become even more vital. In anticipation of these changes, Associated Grocers in Baton Rouge, Louisiana, began planning a new driver productivity initiative about 18 months ago. At the time, AG had a fleet management system in place, but it was several years old, relatively slow, and support for the system had recently changed from one vendor to another.
Knowing that change in one form or another would soon be necessary, John Gillespie, AG's vice-president distribution, assigned Jason Hebert, the company's driver supervisor, to the task of exploring options for driver and fleet productivity systems. Hebert's mission was to find a fleet management system that could eventually become a part of a totally integrated company productivity system, working seamlessly with the warehouse management system and the fleet routing system.
The new system would have to be capable of operating in a company that was ready to embrace almost any new technology that would make it more efficient. Associated Grocers is a modestly sized wholesale grocer cooperative in an industry dominated by giants such as Supervalu. However, it holds its own in its home region with sales of more than $500 million, and, partly as a result of the liquidation of Fleming's wholesale grocery operations, has seen some fairly rapid growth. The company was founded in May 1950 to serve 17 member stores in the immediate Baton Rouge area from a warehouse measuring only 2,500 sq ft.
Today the warehouse, built on a 45-acre property, holds almost 575,000 sq ft and serves 265 stores belonging to 175 member-owners in five states. The company uses a fleet of 83 tractors and 116 trailers to supply supermarkets in Alabama, Arkansas, Mississippi, and Texas in addition to its traditional core of Louisiana. At the same time, AG has positioned itself to increase efficiency in every way possible. “We claim to be a small company with a big vision,” Gillespie says.
“At one time, membership in a traditional wholesale grocery cooperative could range all the way from a corner convenience store to a major supercenter,” says Randy Fletcher, vice-president logistics and supply chain management. “We have consciously pared away the smaller end of the spectrum. For instance, the company web site says that the threshold for membership is a store that purchases a minimum of $20,000 weekly.
“We also ask our members to help us move forward technologically and cut costs at the same time. For instance, stores send in orders electronically using a system we call AG Link. Those orders are delivered as efficiently as possible. To speed the process, orders are handled on an honor system with no physical count made at the store during unloading. In addition, we no longer unload any order by hand. If a member has been unable to upgrade a facility to handle pallet unloading at trailer floor height, we have three trailers equipped with liftgates to serve them. Delivery with that equipment incurs a small delivery charge, just enough to cover the cost of operating specialized trailers. It has all been a part of our drive to cut unloading time and conserve driver hours. The new hours of service make this campaign even more important,” Fletcher says.
Conserving driver time is critical, Fletcher says, because AG drivers typically stay with the trailer during unloading. Depending on mileage and the size of the load, AG drivers may make from one to four stops per day with a maximum of two stops per trailer. That maximum is also very nearly the company average. “We actually average 1.9 stops per route,” he says. “Perhaps we could increase our driver and tractor utilization if we had a system that depended on dropping full trailers at stores and picking up an empty. However, that is not the case. On our heaviest delivery days, we may drop eight to 10 trailers for unloading by store personnel.”
Drivers who make four stops per day do so by running one route, returning to the distribution center, and picking up a second loaded trailer. A driver scheduled for a trip with a total of four hours required for driving and unloading can run two routes. The average is 30% to 35% of drivers handling two runs a day.
Roadshow routing software
In general, drivers know at the start of the day if two routes will be required. Associated Grocers uses Roadshow routing software from Descartes to build routes. Although Roadshow is capable of handling fully random, dynamic routing, AG drivers typically run repetitive routes in assigned tractors. Drivers know what the route will be, including projected driving time and estimated stop time. “Roadshow generates projected route times, and we have another software system that projects unloading time based on the number and type of pallets involved, Hebert says. “For example, insulated containers of frozen foods take a little longer to handle. The stop time software serves an additional purpose. It keeps track of which pallets are in which positions in the trailer. This is to ensure that we know what we delivered so that we know how many and what type of pallets to pick up at the next delivery to the same store. We don't actually have a formal pallet exchange program with our stores, but we want to make sure that we remain in basic balance as far as pallets delivered to pallets retrieved.”
Fleet trailer count is part of the reason for so few full load drops. “Even when we drop a trailer, we can't afford to let it sit empty overnight,” says Caleb Prejean, director of distribution. “On those occasions when we do drop trailers, we do it at customers fairly close to the distribution center, and we go back and get the empty van later in the same day.”
Hebert started his search for a new fleet management system during the Food Marketing Institute Productivity Convention in Atlanta in October 2002. He was not told specifically to select a new vendor; although, new hardware obviously would be necessary, because the system in place had simply become obsolete and was no longer being supported by the vendor. In fact, the existing vendor had a number of positive attributes. The equipment was familiar to drivers, and it was a solid, durable package that provided all the basic onboard computer functions. However, the radio frequency capability that AG sought for future system expansion was not yet available, and the onboard computer was slow compared to some competitors. Remote communication was available, but at a relatively high cost.
Highly expandable system
“We were looking for a system that would be easily expandable,” Hebert says. “Which ever vendor we chose, the new system would replace a group of onboard computers that simply no longer provided adequate technology. The new system would be required eventually to handle radio frequency data exchange, and it would have to automate our hours-of-service compliance. At the same time, we wanted a system that used less reliance on cellular telephones so that we could reduce our communication cost.”
The selection process, including performing due diligence research on prospective vendors took a whole year, Gillespie says. “Eventually, we settled on the Mobius TTS system from Cadec, primarily because of the expandable nature of the system and its capacity to integrate into our wireless vision for the company,” he says. “The decision was not final until discussions with Cadec during the 2003 FDI Productivity Convention in Nashville. At that point, timing became critical, because the last thing anyone in the wholesale grocery business wants to do is install new technology during the pre-Thanksgiving rush. However, we were looking at a hard deadline of January 4, 2004, to be up and running, because that was the day that the new hours of service rules went into effect.”
Meeting the deadline for hours of service was not the only complication faced during the transition to the new system. “We were also still digesting a 17% increase in business that started with the acquisition of the failed Fleming division from nearby Lafayette, Louisiana,” Gillespie says. “That growth spurt started in June 2003.”
Cadec system installation began in early November and took a little more than a week to pull the old systems from tractors and replace them with the new onboard computers. Installation time was shortened, because AG already had eight Cadec units working as technology demonstrators.
Many of the building blocks for the eventual goal of a completely paperless distribution network were already in place when the new fleet management system began installation. An upgrade to the warehouse management system was installed in 1997 using Triceps, a system provided by OMI International in Dallas, Texas. In October 2002, the warehouse system was improved by the addition of voice-directed order selection using Vocollect software. With Vocollect, order selectors are given spoken instructions on selection slot locations and order size. After selecting the order, workers acknowledge the instructions vocally and give directions to the next order. The Vocollect system was quickly adopted by workers, including those who did not read well, and significantly improved the accuracy of the order selection process, Fletcher says.
Associated Grocers personnel now refer to the warehouse management system and the infrastructure to support the Vocollect system as the warehouse backbone. It carries the nervous system of the warehouse. “For this to be the basis of a wireless warehouse system, we sure strung a lot of wire throughout the warehouse,” says William Holtman, systems manager. “To ensure a high level of accuracy throughout the system, we spent a lot of money on advanced hardware.”
This high level of infrastructure was put in place to support future expansion of both warehouse and transportation management. The eventual goal for delivery operations is to equip loaders in the warehouse and drivers at delivery stops with a handheld device that allows pallet bar codes to be scanned at loading and again at delivery. Wireless communication between the warehouse and delivery truck will provide instant confirmation that the correct delivery has been made. Such an advanced system also will involve electronic delivery receipts, Hebert says.
Paper never disappears
In practice, drivers will always handle some paper documents. “We refer to such paperwork as customer mail,” Fletcher says. “When drivers report for work, they pick up the paperwork associated with that day's route. This includes a hard copy of the trip sheet along with invoices, advertising materials, and other paperwork used by the customers. The same sort of thing goes on in the warehouse. Although the voice-directed order selection process requires no paperwork, we still tag every case with a gummed selection label — not because we have to, but because those labels contain information such as pricing used by some of our customers.”
The paper trip sheet is just a backup for electronic data available to the driver, Hebert says. As soon as a driver gets in a truck and logs onto the onboard computer, the work schedule and route for the day is loaded into the Cadec device from the Roadshow routing system. The route data is tied to the truck driver by employee number, which gives AG great flexibility in equipment selection. Although tractors are generally assigned permanently, using the employee number instead of a tractor number to assign data allows routing data to be portable from tractor to tractor. This portability also applies to identifying trailers within the system.
Data is uploaded and downloaded to the onboard computers wirelessly, using two access points — otherwise known as antennas — on the warehouse lot. One access point is near the truck entrance to the facility; the other is at the returns building, which is the first stop for all AG equipment upon returning from a route. Transmission range for the access points is about 300 ft line-of-sight with no obstructions. The potential data transfer rate is 11 megabytes a second; although, onboard computer speed limits transfer to a lower actual speed. However, an upload of a day of planned activity or a download of route history takes only a few seconds.
Full expansion of the system to integrate data captured by a handheld device at delivery probably is one to two years in the future, Gillespie says. Not only will such expansion provide information from customers, it will allow managers to supervise driver performance during delivery stops.
Positive management process
“We can't present this system to drivers as a ‘big brother is watching’ program under any circumstance,” says Fletcher. “However, when they begin to see the capability of the system, we expect that they will begin to manage their own time more effectively and become more productive for AG in the process. We want our drivers to make as much money as possible from productive use of their time. The information gathering capability of onboard computers in a transportation management system allows the company to set standards and convey its expectations to employees in a positive fashion.”
Fleet management using the Cadec system follows two tracks. The primary track is historical and is based on data collected during a route and reported upon a driver's return to the distribution center. The historical data shows speed, engine rpm, brake applications — essentially all the information collected by the engine electronic control module. This recording is continuous from the time a driver logs onto the system until the driver logs off at the end of a day.
“In general, this historical information is not needed until route completion,” Prejean says. “It is data that provides the basis for exception reports that highlight activity outside the normal expectations of the company. We have no need for this data in real time. If we tried to collect it as routes progress, the communication costs of moving such a high volume of data would become prohibitive.”
The other data track is in real time and shows GPS-generated, time-stamped vehicle locations transmitted wirelessly to Baton Rouge. This data is vital for a grocery wholesaler trying to meet the strict delivery windows of its customers. This data track is customer service driven. It provides AG with the capability to predict estimated arrival times following a delay, calculate additional delays, and notify customers whose deliveries are downstream on a delayed route.
Delays along some routes are all too common, because of the physical location of Baton Rouge. The main east-west route is Interstate 10. That highway is built on an elevated causeway above the swamps of the Atchafalaya Basin between Henderson and Grosse Tete west of Baton Rouge and also for part of the distance between Baton Rouge and New Orleans. The bridges are two lanes in each direction. A major accident in the middle of one of these causeways can stop traffic for hours.
The fleet management system automatically sends an alert to the AG transportation department if a truck is delayed enough to make it 30 minutes late to a stop. A new feature in the system is an alert message if a truck is 30 minutes or more early to a stop. This information will be used to update the routing package to ensure the most productive use of driver time. “In most instances, this will be a simple matter of updating the routing software with accurate store operating hours,” Hebert says.
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