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Covering the angles: computerized routing provides timely reduction of transport costs.

Covering The Angles With fuel prices soaring due to the PErsian Gulf crisis and recent tax increases, and the outlook for the future uncertain at best, the problem of controlling transportation costs looms larger than ever.

Over the years, beer distributors have tried many approaches to managing delivery costs. One of the most powerful they have found is to go to the source of the situation: the routing and scheduling function. By routing trucks more effectively, a company can dramatically reduce fleet miles and thus lower or hold the line on fuel expense. A reduction in miles also saves costs in vehicle wear and tear.

In addition to cutting fleet miles, a good routing program can reduce expenses in other areas. It can help limit the number of trucks placed on the road, and shorten run times, leading to savings in driver labor costs. It can also become a tool for tracking driver performance.

Moreover, the right routing system can help a distributor improve customer service, enabling it to meet a customer's specific delivery requirements such as time windows more effectively.

According to Roadnet, a growing number of firms have turned to computerized routing systems to achieve these goals.

Don Lee Distributors Inc., Waterford, MI, for example, reduced the number of trucks it sends out in its territory from eight or nine daily to just seven on average after using the program for only two months.

"Once we start using Roadnet to route our larger Oakland County territory next month, we expect even greater savings," notes Dale Klopcic, operations manager.

"In addition to cutting trucks and mileage," he adds, "it slashed our routing times in half."

Jay Krueger, drive manager at Foothill Beverages, Pomona, CA, states Roadnet has dramatically limited the time its router requires, from three hours to just an hour-and-a-half each day.

"We're getting orders to the warehouse faster," he says, "and we're also developing more efficient routes, so our trucks are travelling fewer miles."

Dispatch Efficiencies

Garth DeFelice, distribution manager for Mesa Distributing, San Diego, CA, reports the efficiencies it provides have enabled the company to dispatch at least two fewer trucks a day than it would without the program. It has also given the transporation department a better handle on its operations, and helped improved service, he reports.

Before acquiring Roadnet, these companies routed its trucks manually or with a simple, computer-based fixed route system which merely grouped stops in pre-assigned routes regardless of the number of deliveries per truck or load sizes that resulted. Under pressure to get the work out to the warehouse, routers had little time to examine the runs with an eye to cutting costs or optimizing customer service.

The problem facing any router who does the job manually or with a conventional fixed route system is that there are simply too many factors involved to be able to analyze routes strategically. Deliveries, then, tend to get scheduled in certain patterns simply because, "That's the way it was always done." Any attempts to improve on these routines geneally provide only rough "best guess" solutions.

Computers, on the other hand, can calculate the results of thousands and million of combinations of factors in seconds. This is the idea behind the Roadnet system, from Roadnet Technologies, Inc., Timonium, MD, a United Parcel Service Co. It uses sophisticated algorithmic software to help human routers develop least cost routing solutions that also take into account all the necessary customer service considerations. MoreoveR, it often produces these results in less time than it takes to handle the same task manually or with a computer-based fixed route program. The creators of Roadnet stress that the system is not designed to replace a human router. Instead, it provides a host of data and sophisticated tools for analyzing that data, allowing him to make decisions better and faster than ever before.

Detailed Reports

The program also provides detailed reports on the routes constructed to help managers track on an ongoing basis such information as delivery costs per case, route and customer profitability, and driver productivity.

The system, which runs on a microcomputer, lets users download information from their main or host computer on customers and daily orders, combines this with other data entered by the router such as the number of trucks available and starting times for each driver to construct the routes, then sends the information back to the host system to generate pick lists, loading documents, invoices, and updating other files as needed.

Among the information entered for each customer are name and address, delivery time windows, special delivery instructions and service time factors.

Customer locations are identified through a system of geocodes which pinpoint each stop by latitude and longitude. Based on these, the program automatically figures travel distances and run times through a complex series of algorithms. SImilarly, service time estimates are based on the actual size of each order along with other factors that affect the time it takes to deliver each account.

Meeting Requirements

Before beginning to run the system, users define delivery areas within their territory. As the Roadnet system receives each day's orders, it groups them into clusters based on these areas, computes distances and travel time between delivery sites, and calculates

the service time required. Next, it sequences the stops within each delivery area to create the best routing solution, and adjusts these sequences to meet customer time window requirements based on company-assigned priorities.

After the preliminary routing has been developed, the system displays a summary of vital statistics on each route showing start and stop times, load sizes, run times, total miles, costs per mile, per stop, and per piece, and the number of missed time windows, if any.

The router can also call up more information on individual routes, and see one, all, or any combination of routes graphically displayed against detailed maps of each area.

Using this information, the router can then interact with the system, moving stops, re-squencing, combining, and balancing routes, to achieve the best solution in terms of service, run times, costs, and vehicle utilization.

A powerful feature of the program is its ability to let the router experiment with "what-if" scenarios. As he moves stops, for example, the program immediately recalculates all factors and shows him the effect on the total picture in terms of run times, miles driven, time windows hit or missed and other factors. This gives the user the date needed to make an informed decision on whether to accept or discard any changes or try another variation.

Cost Breakdowns

Among the reports Roadnet provides is a Route Summary Statistics report which tracks cost breakdowns based on travel time, service time and fixed costs for a given route over any selected time frame; a Driver Performance Report which enables managers to measure each drivers actual performance against system projections; a Resource Utilization Report which analyzes percent capacity, route times, and cost projections over various intervals; Customer Delivery Cost, showing the costs to service each stop and meet time windows; and detailed driver itineraries and manifests.

Roadnet Technologies estimates the system can save most companies at least five to 10 percent of their current delivery expenses, while maintaining or improving customer service. DeFelice of Mesa Distributing says Roadnet has provided the company at least a 10 percent savings in transportation costs, as well as other important benefits.

"When we routed manually," DeFelice points out, "the job took me four hours in the morining and another two or three in the afternoon. Because we distribute both beer and wine, sold by two separate sales forces, I had to collate two sets of hand-written orders and add up all those case totals in my head. We achieved only about 70 percent efficiency in terms of getting both beer and wine for the same customer onto one truck, plus time was a major problem, since the job took most of my day.

"Also," DeFelice continues, "when I went on vacation, someone else had to spend their whole day routing, and without my experience, it was a nearly impossible job. In addition, we weren't getting the efficiencies from our trucks that we wanted."

100-Percent Efficient

Since installing Roadnet, DeFelice comments, he now spends no more than two and one-half hours a day on routing. "We also are 100-percent efficient in getting beer and wine orders for each customer onto the same truck. That alone has significantly reduced our total number of stops and mileage, and improved our service."

Use of the routing system plus another program from Roadnet, called Load Manager, has also cut down the total number of man-hours required, both in the warehouse and on the road.

Load Manager compiles the orders for each truck after the routing has been completed, providing a diagrammed printout that shows how many cases of each pack should go in each truck bay, and what percent of each bay's capacity is left.

"Before, when our night manager did the load sheets manually," DeFelice says, "he had to figure out on his own which types of packages and how many should go into each bay. This took a lot of time, plus he was always writing as fast as he could so the sheets were often hard to read, causing a lot of loading errors. Now the system automatically calculates the best configuration for each truck and produces a printed load sheet.

"As a result, between the routing and scheduling program and Load Manager, Roadnet saves us just in terms of personnel: two drivers, one loader, a part-time checker, and the equivalent of one manager due to the speed-up in the night manager's job and nearly 70-percent reduction in the time I spend routing.

More Stops, Fewer Hours

"In addition," DeFelice says, "our truck miles are probably down at least five percent. The men are driving fewer hours, and we're getting more stops per truck."

Another benefit is back-up, DeFelice adds. "A lot of the routing information I used to keep in my head," he says, "and that's now in the system. The program is easy to learn, so now we've got several people who can step in and handle the job when I'm not around.

"I know the skills and capabilities of our drivers very well," DeFelice continues. "I know which driver is better at handling a lot of stops, and I know which are better ar unloading large volumes. So I typically massage about 40 percent of the routes, shifting stops around to take advantage of these considerations."

In making these changes, DeFelice says he values the system's ability to create "what if" scenarios. "If I don't like the end result," he says, "I can just call back the original solution by typing the restore command.

"I also like the manifests it provides," DeFelice notes, "which shows drivers exactly what time they should arrive at and depart from each account, plus blanks for them to fill in their actual times. These statistics can then be fed back into the system to fine-tune service-time projections.

Number One Goal

At foothill Beverages, like Mesa Distributing, the use of Roadnet has produced savings in the warehouse as well as on the road.

"Our number one goal as to complete our routing more quickly so we could get our trucks loaded faster," reports Carla Lopez, systems analyst, who helped install the program. "Our second goal was to route more efficiently to cut down miles and driver hours."

Foothill's problem was that its manual system took an average of three to four hours, so the warehouse often did not receive the last of the load sheet suntil 11 p.m. This meant the crew had to wait for work, and much of the loading had to be handled by the company's third shift.

"With Roadnet," points out driver manager Krueger, "the routing and scheduling function takes just half the time, so we can usually send the finished routes down all together and the warehouse can start working on them by 7 p.m. If we're extremely busy, we can still send enough to get started." According to Krueger, this allows more loading to be finished by the company's second shift, and fewer total hours are required. The change has alos impacted the DP staff, reducing overtime, since they can now finish by 8 p.m. or sooner, compared to 9 p.m. at the earliest when the company routed manually.

Less Time on the Road

"We haven't done any studies yet," Krueger says, "but we already see that our drivers are travelling fewer miles. They like the system, too, because it means less time on the road.

"We're getting more stops onto some trucks," Krueger continues, "and we've also eliminated situations we used to have where four of our trucks all crossed the same intersection, each delivering a stop on a different corner.

"We use the manifests to monitor how our drivers are doing," Krueger adds, "and the ability to set time windows for each account has helped us improve customer service."

Like many distributors, Foothill feels it's important to keep the same one or two drivers calling on each customer so they can get to know the accounts and develop a rapport. For this reason, Lopez explains, one deciding factor in choosing Roadnet was its ability to let the user define cells of customers for each driver and have the program stay within these when building routes.

At the same time, Krueger points out, it has the flexibility to allow the router to combine fixed and dynamic routing approaches as needed. "That comes in handy when business fluctuates," he notes.

"On slower days," Krueger reports, "we can cut the number of trucks and Roadnet will reassemble the routes so that all the stops are still close. We're also constantly adding new accounts. For each one, we simply enter the information and Roadnet automatically inserts it whether it fits best."

Balancing Loads, Limiting


Bibb Distributing co., of Macon, GA, was one of the earliest users of the Roadnet system. According to assistant sales manager Lonnie Harris, the ability to balance loads and limit dispatches has provided benefits over five years of Roadnet use.

"We acquired Roadnet at about the same time we switched from driver-sale to pre-sale operations," Harris states. "Our goal was to minimize the number of trucks on the road by making sure we were filling eachone adequately, instead of pre-assigning certain stops to each driver and sending the same number of truck out every day.

"Now we just send as many trucks as we actually need," Harris reports. "This has helped the company save money by responding to seasonal and other fluctuations in business. The program also helps us out during busy periods, like the holidays.

"During Thanksgiving week," Harris continues, "we only had three days to deliver the same number of customers we normally service in five. Roadnet enabled us to add the number of trucks we needed in an efficient way, combining many of the additional stops with existing routes. We were able to handle the extra load by running just 17 or 18 trucks each of those three days, compared to the 14 or 15 we normally average."

Summing up, DeFelice says he couldn't be more pleased wit the system. "It's done everything we were told it would do, everything we wanted it to do. But what I'm most pleased with is Roadnet's support. Their people are there when you need them, they get right back to you. Their communication is excellent."

Carol Casper is a writer with Rosse & Associates, a marketing and commmunications firm that works with Roadnet. For more information on the Roadnet system, call 1-800-ROADNET.
COPYRIGHT 1991 Business Journals, Inc.
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Title Annotation:brewing industry
Author:Casper, Carol
Publication:Modern Brewery Age
Date:Jan 21, 1991
Previous Article:Issue for the '90's.
Next Article:The shape of things to come: ECHIP, Inc. is producing tomorrow's software for today's brewers.

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