A wide variety of information technologies, from onboard computer systems that can pinpoint a truck's location via a global positioning system to computerized routing and load planning systems, are fueling distributors' journeys toward maximizing transportation efficiencies.
The next high-octane boost to transportation logistics could come from the Internet. Some companies are exploring the Web's interactive communication capabilities as a cost-effective alternative to electronic data interchange and other communications media.
Information technology's use in the transportation arena allows distributors to respond more effectively to their customers' needs, as well as reducing costs by giving companies better control of overall supply-chain operations.
"We're just bringing up our inbound routing system, and our goal is to control all the freight coming into the facilities," said Bill Merrigan, vice president at Wakefern Food Corp., Elizabeth, N.J., which operates 195 stores under the ShopRite and PriceRite banners.
Wakefern currently controls 30% of its freight. Raising that percentage would allow the retailer to reduce the cost of goods coming into its facilities by reducing its inbound transportation needs, Merrigan explained.
Computerized routing systems can also be used to optimize truck capacity for outbound deliveries to stores. This type of system incorporates factors such as the size of the store order and the store location to determine the optimal load for each trailer.
Such systems also take into account parameters such as local restrictions or areas that may have curfews for trucks. "A lot of deliveries are set up according to the store's [employee] availability, so you have to take that type of thing into consideration," said a source at a wholesaler who requested anonymity.
This wholesaler also makes use of onboard computers. "Onboard computers also give us an opportunity to monitor their pickup and delivery activity," the source explained. "For example, if we have a store manager calling that our driver is always late or every Friday he is late, we can go back and look at the delivery history for a particular driver or a specific location."
Use of this system helped the wholesaler increase its on-time delivery percentage by at least 3% between March 1997 and March 1998, when it reached 96%, said the source.
Wakefern is installing a new generation of onboard computers, which will be tied in with a global positioning system so that the retailer can keep track of the location of its nearly 500 trailers at all times.
"With the tracking system, we know exactly where each truck is. We're also installing two-way communications with the trucks via alphanumeric pagers," said Merrigan.
Winn-Dixie Stores, Jacksonville, Fla., uses onboard computer systems on its fleet of 1,200 trucks, which run 70 million miles per year delivering products in 15 Southern states. The onboard system has produced a wide range of benefits, including tracking of fuel consumption.
"We've been able to reduce fuel consumption 2% over the last two years, primarily from educating drivers on how to cut down on idling time," said Ray Gordon, director of warehouse and transportation at Winn-Dixie.
Quickly transmitting transportation information is an important element of an efficient supply chain. One way to achieve this is through the Internet or internal intranets, said Richard Kochersperger, director of the Center for Food Marketing at St. Joseph's University, Philadelphia.
Information about loads could be accessed via the Web. "You lay information out there, carriers make inquiries and then they can secure loads off the Internet, Kochersperger said."
Certain electronic data interchange transaction sets can handle this process as well, but he believes "EDI is expensive and requires a lot of transactional data to pay for itself," noting that the Internet may be cheaper to use. "But I don't see one method overriding the other. I think you'll see a blend of information technologies to help make the supply chain more efficient."
For Wakefern, tendering loads via the Internet is the next step from using EDI for this function, said Merrigan. The retailer sees future opportunities to tender loads, using its inbound supply-chain management software to communicate with carriers via the Internet.
Several business units within ConAgra, Omaha, Neb., which use 300 carriers to move products representing $13 billion to $14 billion in annual sales for the food manufacturer, are already using the Internet to communicate with carriers who do not support EDI.
"We had to find some way in which we could have a common business process within our company, whether the carrier was on EDI or accessing information via the Internet," said David Bash, vice president of information services at ConAgra. "That's where we came up with this application" for tendering loads over the Internet, called the Carrier Internet Response and Update System.
ConAgra puts information about a load on the Cirus Web site. Then, the manufacturer automatically generates a fax to the carrier to look at the site. The system allows carriers to respond to tenders by either accepting or rejecting them. "Once they've accepted that load, they are responsible for updating the status of shipments," said Joe Terhaar, assistant director of share application at ConAgra. "If, as a result of those deliveries, they have over, short or damage, they need to tell us about that." Terhaar noted that there are fields where this information can be added into Cirus.
Terhaar spoke at the Information Systems Logistics/Distribution Conference held in May, sponsored by the Grocery Manufacturers of America, Washington, at a session titled "The Internet and Innovation in Transportation."
Through Cirus or an EDI application, carriers also have to provide ConAgra with information about failures, such as a late delivery. Carriers are also required to update basic information such as change of contact, new fax or phone.
ConAgra is in the process of implementing new applications to the system that will allow carriers to put in bids for available business.
Use of Cirus is growing, according to Terhaar, who noted that about 40 carriers began using the system in April.