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Revamped routing.

Automated routing and scheduling brews up a winning solution to distribution challenges faced by Coors Distributing of Anaheim.

As the nation's beer wars continue to escalate, wholesale distributors are increasingly finding themselves on the front lines. Recently, the Coors Distributing Co. of Anaheim, CA, made an aggressive move to outflank its rivals. Faced with a rapidly evolving market environment and ever-present competitive pressure, Coors of Anaheim realized that to grow and prosper, it had to cut distribution costs and increase efficiency--while simultaneously meeting exacting customer demands. One solution proved pivotal to the battle: better routing.

Overcoming Obstacles

According to distribution supervisor Gary Becker, the biggest routing hurdle to overcome was a challenge typical of so many industry distributors: the one rep--one truck syndrome. "Traditionally, Coors had one truck follow each sales representative's route," he recalls. "While that policy helped us grow during the early years, it became more cumbersome as we expanded.

"With some 7,000 accounts to service, deliveries that arbitrarily follow a pre-sales route are simply not cost effective any longer," he continues. "What a salesman can sell in eight-hour shift is not what a driver can deliver in an eight-hour shift. One salesman might sell too much beer for one truck, the next too little."

The one rep--one truck system resulted in Coors sending out its entire 24-truck fleet every day--regardless of whether a vehicle carried 150 cases or 1,000 cases. Additionally, when route sales exceeded truck capacity, Becker had to put another truck on the road. The company's drivers also faced unpredictable workloads.

In his quest to cap escalating distribution expenses, Becker faced another obstacle as well: He had no way to measure the true cost of doing business. "The old adage, "You can't manage what you can't measure" is absolutely true. It is impossible to determine what a particular route really costs based on guesswork alone," he says.

Automated Routing: Real Costs, Real Solutions

With so many demands on staff resources, Coors of Anaheim realized that manually reeengineering its distribution operation was no the answer. Instead, the company turned to a sophisticated systems for automated routing and scheduling and has already begun to reap significant rewards.

"My goal is to be able to state unequivocally that we cannot deliver our product any less expensively or more efficiently. And, it is only by taking advantage of advanced technology that we can juggle customer service demands, handle local restrictions, and plan more efficient routes," emphasizes Becker. Last year, the company teamed up with McLean, VA-based Roadshow International, Inc. to implement a computerized routing anc scheduling system. Becker indicates that Roadshow is imperative to his ability to manage the real costs of distribution. "We use Roadshow as a gauge to put a real number on our distribution business. By getting the delivery factors right and the miles right, we can eliminate approximations and work with true measurements."

He adds, "At the end of the day, I know exactly how much each route costs, and I have a hard target against which to manage. It's a great tool for distribution planning and for determining the equipment and staff levels I need each day. Our real cost as a distributorship is on the street--how much money and equipment we have out there each day and how we manage it."

Coors of Anaheim chose Roadshow over competitive packages for one simple reason, Becker says: Real maps. "What sold us on Roadshow was that we were dealing with real streets and real businesses," emphasizes Becker. "Other packages build routes as the crow flies. That's not very convenient when you are trying to drive a truck. As an ex-driver, I know what it's like to be on the road and pass a stop, then drive another mile before you can get turned around and back to that stop.

"Ultimately, we are successful if we make a difficult job as easy as possible," he continues. "Productivity is better; attitude is better; and there's less chance of drivers getting into accidents."

Territory Routing saves "Truck Days"

Today, Coors of Anaheim has replaced its one-rep truck routing with state-of-the-art territory routing. Says Becker, "Now we can cut the pie in equal slices. We take total sales for each day and lump them together in Roadshow with a zero route designation. Then, the system goes to work and divides up deliveries based on territories, stops, volume, available equipment, and the specific parameters for each day. it tells me how we should run the routes to maximize our fleet. Then, I tweak the routes a little to make them even better."

The results have been impressive. Becker offers one example, "On Monday, we typically deliver less beer than the rest of the week. Before automated routing, we put out one truck for each of our 24 sales routes--even on Mondays. Now. I may send out 18 trucks on Monday. We just saved six 'truck days.' Already this year, we've saved over 100 truck days. When a truck doesn't leave the yard, not only do I save on fuel and operating expenses, I extend the useful life of that truck."

He adds, "before Roadshow, we utilized every piece of equipment every day. Now, I only send out what I need to get the job done."

Beyond that, Roadshow is helping Becker motivate the drivers. "We don't want our drivers to be average, so we set our Roadshow factors for the higher end of the scale. The outstanding drivers can still beat our Roadshow times, and the average drivers are now better than before."

On the Horizon: Driver-Sales Routing, Sales Rep Routing

Today, Becker feels he's crossed the halfway mark in his drive to maximize efficiency and cost-effectiveness. In the near future, he'll use Roadshow to cut costs and boost productivity in other areas as well.

One possibility is the driver-sales routes, which account for approximately half of Coors of Anaheim's business. "Right now, driver sales routing might have room for increased efficiency," Becker says. "In some instances, the trucks are the same size as the large pre-sales trucks, but the volume of beer sold from them is not nearly as high. We're going to use Roadshow to help us look at re-routing, combining routes, switching to pre-sales, and even telemarketing to utilize our equipment better and improve efficiency."

Another area to evaluate will be the strategic deployment of sales reps on the pre-sales routes. "If the route is sold pretty, it's delivered pretty," Becker stresses. "We're going to take those sales routes and let the machine show us how we can make them more productive."

By easing the burden of routing, Becker says Roadshow has made his own job more productive as well. "Now, I don't have to start routing until 5:00, after all the reps have come in," he says. "That leaves me time to try new ways of increasing efficiency by conducting 'what-if' analyses.

"With the powerful potential Roadshow has," Becker concludes, "I'm on course to answer 'Yes!' when my boss asks if we are delivering the beer as inexpensively and efficiently as possible."

Linda G. Sowers is an executive with MarkeTek, a marketing consulting firm in Fairfax, VA.
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Title Annotation:Coors Distributing Co.'s automated routing and scheduling
Author:Sowers, Linda G.
Publication:Modern Brewery Age
Date:Jan 31, 1994
Words:1194
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