Distribution: Trucking along the right path
June 15, 2009
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With gas prices creeping up again, the cost of truck routing is a priority to many beverage distributors. Although route optimization software solutions may not solve all financial woes, they will help keep trucks on the right path and drivers accountable.
“Transportation is such a huge cost in the beverage industry,” says Dan Buttarazzi, director of marketing at MicroAnalytics, Arlington, Va. “How can we save on transportation costs? How can we become more efficient with the routes we run on a daily basis? When times get tough, people are looking to save.”
As the economy changes, beverage distributors will have different demands for route optimization, says Chris Macaw, president of bMobile Technology, Boise, Idaho.
“We feel for every client, we need to be a part of their business to help them improve the way they do business and to enhance their bottom line,” Macaw says. “A big part is listening to that client to identify exactly what they need to run a better route, to be more efficient, to have better cost control, and to have better accountability.”
Helmut Bubestinger, solutions architect for Salient Corp., Horseheads, N.Y., agrees that with manufacturers requiring low costs and high efficiency, solutions can be implemented to tackle those problems. “In this economy, it is necessary to cut the fat, not the lean,” he says. “Over-reacting or reacting without precise intelligence can do more damage than good if companies aren’t careful.”
To help solve some of the routing problems, bMobile offers RouteMizer, a route planning feature within its Route Manager suite. RouteMizer uses Microsoft MapPoint and takes a normal day or route within a company, looks at the different construction zones, time of day, when the truck plans to stop there and the best time to make a delivery, Macaw says.
“With the increase of fuel prices, there became a huge demand for a solution that would allow you to put the technology behind routes and optimize those, so you were taking the best path to get to your customer,” he says.
When delivering to restaurants, typically drivers will have a certain timeframe to meet so they do not deliver during dining hours. The RouteMizer program looks at the optimum time for delivery and builds it into the logistics plan, Macaw says.
“[RouteMizer] optimizes in terms of the hours you’ll be on route, the amount of labor that is involved in the route, the miles you’ll travel, the fuel you’re going to use, and it also looks at the amount of inventory loaded on the truck, which may be important if you’re going through a toll zone or if you have weight restrictions on certain highways,” he adds.
While many experienced drivers know the ins and outs of the weekly routes, with RouteMizer, an inexperienced driver or delivery person can run the routes effectively with turn-by-turn directions, Macaw says.
RouteMizer is a two-part system: software and a handheld device. The handheld device is used primarily for data collection. Cost factors can be plugged into it and it can show the driver exactly where he or she is on the route. It also shows the cost per route by adding up the mileage, labor, fuel and maintenance, says bMobile’s Director of Marketing Michael Brown.
“You see all the stuff added up, and you see what the cost is after it is optimized,” Brown says. “You actually see the savings per route on a daily basis. That is translated into the cost of the application, so it pays for itself.”
“It’s all about having information down to the nth degree for each route, so they can control it and make adjustments to make each route as profitable as possible,” Macaw says.
Providing the profitability of each route, down to the value of each customer, is a perk to Salient’s Margin Minder solution, Salient’s Bubestinger says.
“Margin Minder solution can integrate all the costs associated with serving customers, merchandising products, servicing fleets so distributors can understand where they need to focus on cost-cutting or new investments,” he says. “Salient has put focused effort into helping clients use their solutions to solve problems, improve efficiencies and cut costs.”
Salient also offers a Geo-Spatial add-on for evaluating the profit performance of each route in context with factors such as population, demographics and other regional customer attributes, the company says.
“Managers can identify new efficiencies for re-routing and changing serving frequency, service volumes and more, based on precise geographic intelligence,” Bubestinger says.
Plan and save
UPS Logistics offers a suite of applications called Roadnet Transportation Suite, which combines Territory Planner, RoadNet, FleetLoader and MobileCast. Territory Planner looks at historical data to create new standard or static routes. It also offers accountability through generated and customized reports that cover all aspects of a company’s sales, service and distribution operations, the company says.
“Roadnet takes the orders that I get today and creates routes for tomorrow,” says Cyndi Brandt, director of marketing for UPS Logistics Technologies, Towson, Md. “We can do that using the standard routes we just created in Territory Planner. We come up with routes based on the business constraints that the customer sends — open/close times, time windows, how many trucks do I have, how many drivers do I have, do I want to do reloads, what are the capacities of my trucks?”
FleetLoader’s sole purpose is to help load beverage trucks, Brandt says. “Once I create the routes, and I know exactly what products are going on the truck, I need to build those loads,” she says. “If I don’t build those loads properly, they move around, or I can’t get it up on the truck, they break.”
Lastly, once the routes are created in Roadnet, MobileCast watches what happens in real time, Brandt adds.
MobileCast can track all vehicles in real time against their individual routing plans, increase driver accountability by eliminating service delays and delivery errors, and reduce costs due to excessive mileage, overtime and deadhead miles, the company says.
All four parts of the Roadnet Transportation Suite can be used on beverage routes. The route is built on a PC in Roadnet, and then it is sent to the MobileCast dispatching module, which takes care of the communication and sends it to the driver’s handheld, Brandt says.
Small changes can add up to big savings, Brandt says. “If the driver goes off his route by five miles to get his favorite slice of pizza, that means he went off route 10 miles total,” Brandt says. “The average cost per mile is about $2.50, so it was $20.50 for that one day for that guy to go off route. Now let’s multiply that by 261 days. If he does it every day, that’s roughly $5,300 times 10 drivers, and holy crap, that’s $53,000 already. Ten extra miles a day in your process can drive up cost.”
MicroAnalytics also offers a routing program to help companies find the most efficient routes to serve their customers, Buttarazzi says.
“Truck Stops routing program is beneficial in a couple ways to the people in the beverage industry,” he says. “[Delivery] time windows play an important role. Truck Stops will take a look and make sure those stops get routed during the appropriate time windows. On a daily basis, the guys in the beverage industry look at time windows and make deliveries in an efficient manner so drivers aren’t wasting time on the road.
“The other thing they want to make sure of is that the road conditions are taken into consideration and road speeds are taken into consideration.”
Truck Stops is a PC-based program, where a person at a warehouse can develop the routes for the day, and either print out the route report for the driver or feed the information into GPS units displayed in the driver’s cab, Buttarazzi says.
The program is a planning tool, and although it is not necessarily in real time, changes to the route can be made. “You could go back in if there was a problem you knew ahead of time,” Buttarazzi says. “If they had to change their order or they say, ‘Don’t come until the afternoon instead of this morning,’ the user could update that again in real time, so the driver is told, ‘Hey, you were supposed to go in order number 1,2,3,4,5, but you’re going to go in order 1,2,4,5, then 3 because of the change of time.’”
The overarching trend in the beverage industry is looking to find ways to save money wherever possible, he says.
“People are afraid of spending right now,” Buttarazzi says. “But at the same time, a lot of companies are realizing that Truck Stops is a program designed to save money, so in the long run, it will be beneficial to them.
“Bottom line, you have places you have to get to, and you’re trying to get some efficiency out of those routes,” Buttarazzi says. “That’s where Truck Stops comes in. It’s built for efficiency of the route. As prices of fuel go up, we see an uptake in the number of leads and requests because people are looking to save.” BI
