Islands in the Stream

Jan 01, 2002 10:30 PM  By

When your hourly driver leaves the yard with a $100,000 piece of equipment, what happens between his departure and return? How do those events compare with what you had planned or anticipated? How soon can you make this information visible and placed in the hands of folks who can put it to the best use?

These, of course, are not new questions. For example, in 1985, a vice president of distribution for one of the major West Coast grocery companies (I’ll call it Sun Drenched Foods) said, “I have engineered labor standards for my warehouse employees, so why can’t I have them for my drivers, too?” And so he did.

And the company saved 15% — 20% of the driver payroll annually over the next 15 years. But that was then.

Today, Sun Drenched is a bigger, better organization, with hundreds of stores, more than 400 trucks, a comparable number of drivers and daily delivery routes, and several billion dollars in annual sales. Recently, that executive’s latter-day counterpart was charged with a familiar assignment: “Generate additional savings from fleet operations while improving service and trailer utilization.” After saying yes, the executive asked himself, “How can we do that?”

The answer, though not immediately apparent, was the same as it had been 16 years ago — applying innovations in technology to existing operations. But one of the major differences today is that access to these opportunities and innovations is much greater for organizations of all sizes, thanks to declining costs, greater flexibility and sophistication of both the tools and the users, and remarkably shorter payback periods for the requisite investment.

Take the much smaller Surface to Air Transportation Company of Dayton, OH (not a grocery operation), for example. The company’s president, John Platz, notes, “Almost anywhere in the transportation arena, this kind of technology can be of great benefit if management makes good use of it. I’ve used standards in other situations, and would have benefited greatly from the kinds of technology now available for managing driver productivity.”

Separation anxiety

The grocery industry has long been a leader in the application of new technology to the distribution and retail environments, and Sun Drenched is no exception. In 1985, it installed VSCS Vehicle Scheduling and Control Systems, developed by Irvine, CA-based Enteq Inc. The application, written in COBOL and running on the mainframe, was developed and successfully installed in each of four distribution centers. Designed to calculate and apply engineered labor standards for delivery fleet drivers, the program generated significant annual savings from the outset.

At the time of the more recent initiative, Sun Drenched, like many companies today, had separate systems for several aspects of fleet management. The company used a widely installed, commercially developed package for routing deliveries, another separate tool for on-board data capture, and yet another combination of software and hardware for payroll timekeeping. Each provided important data or functionality, but each tool also presented its own challenges.

The routing package was efficient, but the resulting trips had to be re-keyed into the VSCS system for labor standard calculation and dispatching. The on-board computers tracked vehicles on the road and generated speed and over-idling reports, but the driver had to make two entries at each stop, one on the trip sheet for delivery verification and labor standard, and one on the on-board computer. The payroll tool kept track of time-clock entries for payroll, but time reconciliation with the labor standards reporting was a completely manual and greatly time-consuming process.

A bridge too far

When Sun Drenched made the decision to upgrade and integrate its fleet management process, the shortest distance to a solution meant assessing the potential of working with the incumbent vendor on a new solution.

As a first step, Sun Drenched assembled a team from the various departments that would be directly involved with the conversion — transportation, data processing, industrial engineering, training, and management. Enteq, the original developer of the VSCS application, had been successful in converting its other legacy programs, including the ENSTEP Warehouse Labor Reporting System, to the Microsoft Windows environment. The platform in use now was Windows NT as the server, Microsoft SQL Server as the database, and Visual Basic as the development language. The team evaluated these changes, and once they were satisfied that the technology was suitable, and with Enteq’s ability to accomplish what was required, the project was ready for the internal launch. The team laid out a project plan and timetable.

The first span of the bridge was to the routing program. Sun Drenched had been using the package for many years to efficiently route the deliveries for each day’s billing. After routing, the solution was manually entered into the VSCS program to apply the labor standard, compute the appropriate time content of the work, and calculate and dispatch all routes for the day. Although the software had the capability to export the optimized delivery sequence in a flat file format, Sun Drenched had never taken advantage of this feature.

An interface between the two applications was built to automate data exchange. Now a flat file containing the approved routing solution could be imported into the VSCS system, enabling it to automatically apply the labor standards and ready the delivery solution for dispatch based on destination store requirements.

“One drawback of the legacy VSCS program was the burden of manually maintaining driving directions for facility-to-store and store-to-store travel,” says Kevin Myers, president of Enteq and developer of the VSCS application. “Missing paths meant that the driver time for that leg was not accounted for. To create directions, an analyst had to sit down with a map and a computer, measure distance with a wheel, and enter the directions for every leg of the route into the computer.”

The new bridge enabled Sun Drenched to take advantage of the routing software’s capability to export the driving directions for each route created. And the new interface executed this task without operator intervention. This increased the percentage of “on-standard” driving legs and improved use of drivers’ time.

All aboard

Once the routing bridge was completed, the next task was to integrate the on-board system. In the original legacy system, the driver had to log arrival and departure times, quantities, delays, and returns onto a trip sheet by hand. That data was later keyed into the VSCS system for the calculation of performance. The upgrade opportunity here was multi-fold. First, all of the problems associated with manually captured data would disappear. Second, with the change in place, drivers could spend more time driving and making deliveries. Third, the quality of information would be improved and processing time at the end of a route would be reduced.

Enteq developed an interface to extract its data and automatically apply it to the post-trip calculation. Exceptions reported during the import process were now the only thing clerks had to manage.

Time travel

This left only the timekeeping system to be integrated. Previously, payroll reports and VSCS reports had to be compared manually to identify drivers whose paid hours did not match their VSCS production hours. This was a time-consuming task, and the older the data, the more difficult it was to close gaps and resolve problems. For this application, Enteq wrote an interface to extract the payroll hours by driver by day. This information was then combined with the trip data in a single report. Discrepancies were comparatively easy to spot and the information for analysis was available within a short time after the drivers’ return.

As is often the case in projects of this magnitude, during the operational review additional opportunities to cut costs were discovered. For example, the trip sheet in the original program was printed on five-part paper-tractorfed NCR paper, so that each store could have a copy of the delivery record. As a result of the review and analysis, the trip sheet was re-engineered to fit on one laser-printed legal sheet, perforated so that the accompanying delivery record could be torn off and given to the store personnel.

Reports represented another opportunity for streamlining, and were scrutinized to determine their usefulness. Several reports were combined, some eliminated, and another set revised to make them easier to use. The resulting paper savings was measured in tons.

With this comprehensive approach to upgrading operations, it is relatively easy to confirm whether execution times for tasks are “right.” How much time is being consumed in various non-delivery tasks such as paperwork or inspections? Managers can readily focus attention on systemic issues and bottlenecks, and use on-time delivery results as the basis for meaningful and persuasive conversations with stores or customers.

For a few dollars more

Probably to no one’s surprise, Sun Drenched isn’t done yet. With the programs barely “cooled off,” plans are on the drawing board to add new features to the software. One such proposal is to notify the store several minutes before the driver arrives at the dock. This would enable the store, backroom, and receiving to be ready to process the load with a minimum delay. In combination with more consistent services in general, labor scheduling and labor efficiency would improve. Sun Drenched Foods’ analysis suggests that the proposed store alerts would yield a conservative savings of five minutes per driver per stop. Translated into dollars, this arrival notification function could yield annual savings of as much as $130,000 to $300,000 where drivers’ fully loaded wages averaged $25 per hour.

Another plan calls for arming drivers with hand-held computers — in effect paperless trip sheets that could afford fleet operations an opportunity for real-time messaging between the driver and the dispatch office, to handle situations as they arise and not after the fact.

Although not all of us live in the grocery world, the Sun Drenched experience offers applicable lessons for almost anyone. Clearly, a comprehensive approach to driver productivity represents another level of opportunity for significant operational improvement.

Ron Hounsell is vice president of software solutions at Tom Zosel Associates, a distribution and logistics consulting firm based in Long Grove, IL. He can reached by phone at (847) 540-6543 and e-mail at rhounsell@tzaconsulting.com.