DRIVING COSTS DOWN

Transportation operations, one of the last key logistics areas to take advantage of automated-technology's efficiencies, are getting up to speed.Onboard computers that allow real-time communication and help make driver labor standards possible, as well as routing and yard-management software, are providing significant savings and improved customer service for an increasing number of distributors.Associated

Transportation operations, one of the last key logistics areas to take advantage of automated-technology's efficiencies, are getting up to speed.

Onboard computers that allow real-time communication and help make driver labor standards possible, as well as routing and yard-management software, are providing significant savings and improved customer service for an increasing number of distributors.

Associated Food Stores, Salt Lake City, for example, started combining frozen and produce products into combined truckloads during the recent test of a new routing system. The software helped eliminate two delivery runs per week, lowering total mileage at its distribution center.

One Fairways Foods distribution center, in Fargo, N.D., has been able to reduce its overall transportation costs 6% in the past year through closer scrutiny of all transportation practices. With the anticipated introduction of onboard computers this year, the wholesaler is looking to reduce overall transportation expenses by an additional 6% to 10%.

The test of a new routing system at one of Associated's distribution centers last fall yielded increased transportation efficiency in the form of decreased miles.

The routing software helped the wholesaler integrate frozen and produce loads on multitemperature trucks. The integration allowed Associated to eliminate a few other delivery runs and reduce the overall transportation mileage at the test location by 1,000 miles a week, said Craig McPhee, director of outbound logistics for Associated.

McPhee said the wholesaler is looking for additional locations where the integration of loads could be applied on a broader scale.

Although the improvements with the routing system are encouraging, McPhee said, the wholesaler hasn't yet seen any large payback with its onboard computers, which have been used in the wholesaler's fleet for about four years.

However, he added, this may be due to the fact that Associated's onboard system does not possess real-time communications capabilities.

"All the computers do is give us time arrived, time at stores and time at stop," McPhee told SN. But that information is only available after the driver returns to the warehouse and downloads the information, which in many cases means getting the information the day after the run is complete.

McPhee said the wholesaler is looking into upgrading the onboard computer system so that it could be used more as a real-time communications medium.

Although transportation efficiencies on the road are paramount, Associated has also improved transportation efficiency within its own yard.

"About two years ago we put in a yard-management system to begin tracking equipment in the yard," said McPhee. The goal of the yard system was to reduce drivers' time in the yard so that they could depart for delivery destinations on time.

Prior to the yard-management system's installation, McPhee said, drivers would spend about 40 minutes looking for their equipment in the yard. By eliminating "wasted time" in the yard, now drivers spend an average of only 10 minutes in the yard before departure, he said.

According to McPhee, Associated is also looking to use the yard-management system to help schedule trip plans. He said that with reduced time in the yard and increased on-time departures, the wholesaler is looking to cut its costs and improve customer service.

Raley's Supermarkets, West Sacramento, Calif., is looking to reduce overtime paid out to drivers as a key element in reducing its transportation expenses -- once its 66-truck fleet's onboard computer systems are up and running, according to Stan Sasaki, transportation manager for Raley's.

The information from the onboard computers will allow Raley's to devise labor standards as well as to reward drivers who help increase transportation efficiency, he said.

The onboard computers will tell the retailer, in real time, when a truck is on or off, in motion or stopped and how long it stays at a particular destination, Sasaki said. The labor standards will include guidelines for how long a delivery run to a particular destination should take, he said, adding that the retailer already has labor standards for certain warehouse workers' functions.

"If a driver's run is scheduled to take 45 minutes and is completed in a half-hour, then the driver banks the saved time. At the end of the quarter he can cash in [the saved time] for days off or straight pay," Sasaki said.

He added that the end result of the program is a happier, safer and more efficient driver. Furthermore, the driver is not spending 12 hours a day on the road, which saves the retailer a significant amount of overtime pay.

The retailer is also looking to integrate onboard computers with its warehouse-management system and its mainframe system, but this process has had slow going at times, Sasaki said.

The hard part is getting all three systems to talk to each other. "That's what we're working on now," he noted.

Raley's began to upgrade its trucks' onboard computers last July, and they should be ready for use this spring, Sasaki said.

One piece of the transportation puzzle that has helped everyone save some transportation dollars, at least in recent months, is the recent drop in diesel fuel prices. "Diesel prices are the lowest I've ever seen -- the lowest in about 10 years," Sasaki said. "However, it makes our [nondiesel-fueled] Liquid Natural Gas trucks more expensive,"

"We've saved about 10 cents to 15 cents a gallon for diesel fuel since the summer," said McPhee.

Joe Van Laere, distribution director for Fairway Foods, Northfield, Minn., a division of Holiday Co., Bloomington, Minn., has also noticed the decrease in the price of diesel fuel.

But for the essentially manual transportation operation in Fargo, N.D., most other efficiencies are achieved by looking over every aspect of the transportation process with a discerning eye.

"We analyze every run and have been able to reduce the amount of stops to stores," Van Laere said. "We don't send out half-load trucks. We want full-load trucks leaving." Through strict transportation-system monitoring, the Fargo location reduced its overall transportation expenses, including everything from tire tubes to licenses and fuel to wages, by 6% last year, Van Laere told SN.

Although the increased efficiency is good, Van Laere said he believes onboard computers are going to make it better.

Once the onboard computers are in place in the fleet, which consists of 13 tractors and 28 trailers, Van Laere is hoping for an additional 6% to 10% reduction in total transportation operating costs.