Successful grocery and foodservice distribution depends on speed, not speed on the highway but in all other aspects of the business. Modern information management makes that speed possible.
The decisions made by distribution and transportation managers remain essentially the same. However, the speed with which those decisions can be made have a major impact on business results. Having access to a constant flow of information can help warehouse managers control the flow of goods in and out of a distribution center while maintaining the lowest possible inventory levels consistent with customer service goals. Bar code scanning technology inside a warehouse helps speed the order processing mechanism and almost eliminates order selection errors.
In the transportation operation, information management systems help plan routes and control drivers. These systems pull unproductive miles out of routes and help maintain adherence to engineered work standards for drivers during delivery stops. Ultimately, routing systems can have an impact on the size of fleet needed to serve a given trade area.
Punchcards to Dynamic Routing In addition, the information gathered from routing and driver management systems can be used by the distributor's customer service department to maintain the goodwill and loyalty of customers. Based on information available in real-time, routes can be changed to meet the special needs of a distributor's best customers.
Automated information systems have followed the development of computers from punched cards to interactive wireless data. In the beginning, punchcard systems filled standing routes by adding every customer with an order on a given day. Eventually, this led to systems that could reroute entire distribution patterns in minutes to meet the user's desire for low mileage, efficient operation, high customer service, or a customized mixture of all these factors.
Early warehouse management systems were data collection only. They could keep track of things, but they cost a lot. A single inventory collection device could cost up to $5,000. The fact that users wanted each device to be physically small added to that cost. Such systems had high development costs and took a long time between conception and market availability.
Another problem with early systems was the proprietary nature of the operating software. Now, manufacturers provide systems that run Windows-based programs that can be used with a variety of hardware. This gives warehouses the ability to use a variety of handheld devices in the same operation.
RF Systems Since 1983 Narrow band radio frequency systems were introduced in 1983 and remained in use until 1990 and 1991 when spread spectrum devices became available. In 1999, 11 megahertz systems were introduced to meet the 802.11B standard. Prior to the introduction of that standard, systems were proprietary and could not communicate between systems provided by different vendors.
In the current market, warehouse management system hardware is provided by vendors such as Aether Systems, Qualcomm, RT Systems, Symbol Technologies, and Telxon Corporation, among others. These radios operate at short range with either of two transmitting and receiving systems - spread spectrum frequency-hopping or broadband.
At least the variety of hardware is slimming down. Almost all warehouse systems now use radio hardware that fits within the 802.11B standard, says Don Johnson, vice-president of systems technology for Telxon Corporation. Although a large number of suppliers provide hardware, they operate in a similar manner, much like a network of compatible personal computers, he says.
Short Transmission Range Radio frequency systems tend to have a range of about 150 ft from an access point, which is the terminology used by vendors for a transmitter/receiver. They do not require line-of-sight, but the more line-of-sight is ignored, the shorter the range from a single transmitter/receiver becomes. Goods stored between the access point and a mobile warehouse device also can affect range. A rack full of paper towels is radio transparent while a pallet of foil-wrapped frozen dinners is not. One important factor to consider about this short range is that these are in-building systems.
Spread spectrum radios work with a frequency-hopping pattern. They broadcast on a series of frequencies for a particular period of time. A control beacon is transmitted periodically to ensure that all equipment in the system remains synchronized. The constantly changing frequency sequences are pseudo-random.
Broadband systems broadcast on multiple frequencies at the same time. They require receivers that can pick up multiple frequencies simultaneously.
Frequency-hopping is less efficient than broadband. Originally, it also was less expensive. It was developed by the military, because its random frequency pattern is difficult to detect and locate. For the military, this could be quite important, especially to an artillery unit seeking to perform its mission without coming under counter-battery fire. The coverage within each frequency-hopping cell is less than for a direct-sequence broadband system.
Speed Depends on Range When radio frequency systems were first employed, direct-sequence systems were much faster than frequency-hopping systems. The original data rates were two megabits per second for frequency-hopping compared to 11 megabits per second for direct-sequence. However, frequency-hopping is better at coping with interference. It gets its data through when other radio systems are operating in the same area, but it causes interference as well. This is because frequency-hopping uses the entire bandwidth assigned to it.
Current radios operate at different data rates depending on the range from the access point. Up to 125 feet from an access point, radios will transmit and receive at 11 megabits. When the device is moved beyond a certain point, the data rate automatically slows down to two megabits. The user never knows that the speed has changed.
Data rates mean different things to different users. In general, a warehouse application is not affected by data rate, because the amount of information moving across the network is so small at any given time. However, an office environment that moves huge blocks of data or entire programs must have high data rates to maintain smooth work flow. Adding voice to any system boosts the requirement for higher data rates, because a voice system requires a constant carrier signal.
A warehouse with 250,000 sq ft of floor space typically has 40 to 60 individuals who need to use wireless devices. Some distribution centers have as many as 450 users under the same roof, but the roof usually is about one million sq ft. For instance, Ford's Kentucky Truck Plant is 4.4 million sq ft. Most places aren't that big. A typical warehouse needs at least two access points that cost about $1,200 apiece. Moving up to three access points from two can double or triple the number of users the network can support for a minimal incremental cost, Johnson says.
Global Radio Standard At least, the problems inherent in purchasing radio frequency warehouse systems give users less to worry about, because the 802.11B standard for radios is a global system. It can be used almost anywhere in the world, which means that multi-national companies do not have to change systems as they expand to additional countries.
Essentially, 802.11B provides the blueprint for using different vendor hardware within a single warehouse communication system. However, the practice was not quite that simple before a group of vendors decided to certify that their equipment would all meet the standard. "In the beginning, it was sort of like deciding that all engines would run on gasoline without mandating the size of fill tubes on the tanks of various cars," Johnson says. "Since the standard was first introduced, hardware manufacturers have worked out a system that gives users confidence that they can mix hardware. Basically, the manufacturers decided that users just wanted to plug in equipment and use it; they didn't want to have to know all the technical requirements before making a purchase."
One of the drawbacks to applying advanced technology to grocery and foodservice distribution has always been the shallow pool of technical expertise and resources in the industry. Few companies have the technical personnel on staff to implement state-of-the-art information systems. In most cases, this puts warehousing and distribution personnel in the position of trying to do two things at once. People do their primary jobs and try to be technical experts at the same time.
Implementing advanced technology systems places intense pressure on a warehousing and distribution staff. Some vendors sell radio frequency warehouse management systems as though they are magic bullets that can solve every problem that comes up. As a result, upper management often wants to see a positive return on investment in six months or less.
However, information systems is a rapidly evolving field. One of the worst aspects of this is that many different solutions from different vendors are available at the same time. Without a deep understanding of the technology, warehousing, and distribution, transportation professionals often are at a loss about which solution to choose.
Implementing a Radio System Implementing a radio frequency warehouse control system involves more than simply purchasing hardware. The radios and the display consoles all do about the same thing. Problems arise because every warehouse wants the hardware to do different tasks. Some wholesalers want the system to communicate with inventory records while others want automatic order replenishment. In each case, custom software is required. In general, the hardware producers do not provide custom software. A third party programmer is required.
The food industry has some special requirements for radio frequency equipment. The most common requirement is a device that can be used in a freezer. "That's important," Johnson says, "but the details that go with such a purchase are just as important. For instance, how long do workers stay in the freezer. If work periods are fairly lengthy, the device should offer hands-free operation or should allow operation while wearing gloves in addition to being able to withstand a freezer environment. Another concern is the work environment outside the freezer. One device may work fine in a freezer, but it can't be taken outside in the rain."
Information workflow in a distribution center breaks down mostly into receiving and shipping, along with some data about incoming material storage where inbound goods are held in a staging area instead of being put away immediately on receipt. An automated data collection system is more than just slapping a bar code on an inbound pallet. The system must be able to follow product throughout the receiving and distribution process. In particular, it must be adaptable, easy to change, or expand.
"One of the biggest mistakes distributors make is buying a system that meets the requirement for quick return on investment without considering the need for expansion," Johnson says. "This can result in expensive additional full system purchases instead of building onto an existing system."
Win an Easy One Implementing a radio frequency management system takes planning. Although most users want to install the biggest part of any system first, going slower sometimes makes more sense, because it proves to the workers that the system is easy to use. One good place to start in a distribution center is the returned-goods department. This is usually a low-pressure environment where bugs can be worked out of the system without causing delays. The important thing is to start implementation in a department that is easy to handle, Johnson says.
Once a warehouse system is in place, it must be integrated with the distribution and transportation systems for full efficiency. Managing inbound freight, rack locations, order selection, and real-time inventory doesn't offer much advantage if it cannot be used to build routes and manage delivery productivity.
In general, foodservice customers order today for delivery and use tomorrow. These orders may be placed through a customer service representative making an onsite sales call, by telephone to an order taker, or online. No matter how the order is received, the distributor must process the information, select the product, route the delivery, and make sure that the customer receives the correct order on time and in the proper condition.
"Ordering, processing, and delivery all are part of the same continuum," says Len Kennedy, vice-president and chief operating officer of UPS Logistics Group - Logistics Technologies, a business unit known until recently as Roadnet Technologies. "Improvement in any one of these areas can help improve the entire distribution system."
Solving the Puzzle Improving delivery operations is sort of like solving a puzzle that has four pieces. These pieces are planning, execution, delivery management, and communication. The most up-to-date delivery management techniques place the ordering and transportation systems online for routing and delivery, actually connecting to drivers and service representatives in the field. These systems can provide real-time information about delivery scheduling and conditions. Many distributors provide their drivers with computers that keep the system updated on a constant basis, Kennedy says.
Foodservice distributors face a number of challenges including building and maintaining customer loyalty, expanding delivery and service options, online ordering, developing an e-commerce strategy, tight profit margins, service failures, improving the customer experience, expanding service area and delivery density, and creating profitable routes. Other issues include the driver shortage and retaining drivers as a way to deal with that shortage, driver attitudes, and interaction with customers. From the customer end, foodservice houses must cope with inflexible delivery options, time windows, and missed delivery times.
Scheduling and routing systems can be customized to recognize individual customers. Much like airlines pay extra attention to high mileage frequent fliers, a scheduling and routing system can take note of special customers and make sure that they get extra time or extra service to maintain their loyalty. Keeping orders moving into the scheduling system in real time helps distributors predict actual delivery time compared to promised deliveries.
Real-time Order Management For instance, as orders build for a particular geographic area, a distributor can make the decision to add another truck to the route to ensure on-time delivery for the largest number of customers, or the distributor can choose to use a single truck and notify customers of a change in the delivery schedule. With real-time order management, this decision can be made much earlier than it might be with a batch-order management system. Another aspect of such a system is a costing routine that automatically runs a cost analysis on each additional order. Distributors can use this feature to decide whether or not to accept each additional order and promise delivery as customers place them, Kennedy says.
These costing tools can save customers money as well. A receiver may want a specific delivery time; however, the costing analysis allows the distributor to offer alternatives. For instance, the customer requests a special delivery on Tuesday morning at 7:45. The costing system could allow the distributor to accept that order at one price or suggest a different delivery time at a slightly lower price. The decision depends on how much the customer wants or needs delivery at precisely 7:45.
Internet technology can provide information directly to foodservice customers. For instance, a customer may want to know delivery status. Products exist that allow receivers to find out when a delivery will arrive - not when it is scheduled to arrive, but when it really will arrive. This is made possible by connecting the web site where orders are placed to the real-time dispatching system.
Calculating Service Costs Wholesale grocers and foodservice distributors already are familiar with routing software. It offers a choice between fully random dynamic routing and standard routes. Newer versions of routing software, especially web-based systems connected to order processing and warehouse systems, allow distributors to calculate the difference between standard and premium customer service.
Routing software offers several planning alternatives to distributors. Routes can be monitored as they are built throughout a day. Among the alternatives are a simple route listing or maps that show actual route configuration. These systems can be customized quickly to account for construction or other traffic conditions.
Instead of moving information in blocks - order receipt, order processing, order selection, route scheduling, truck loading, and dispatching - an online system is continuous. A distributor may accept orders on its web site. Information about that order is immediately transferred to the routing and scheduling system. In a system with web-based services, orders are instantly geo-coded by delivery address.
One of the best things about real-time planning software is that it provides a continuous update on truck capacity. As routes are built, the system fills the truck and provides information on remaining capacity. This can be done by weight, cube, or pieces. With wireless route management, this process can be reversed. Managers can almost watch a route in progress and keep track of how much work is left for a given truck. This also gives managers a method to compare actual driver performance against projected performance, Kennedy says.
Paperless Delivery Environment These systems help drivers as well as manage them. Handheld computers give drivers a nearly paperless delivery environment. For instance, damaged items can be noted on the handheld computer at the time of delivery - no more writing a note and taking it back to the delivery supervisor. The system will display full information about every delivery as it is made. In a wireless world, the driver's computer records arrival and departure times. This provides the possibility for rescheduling a driver while on the route. It also can provide directions on the fly.
One of the most difficult challenges for handheld computers has been finding hardware that is tough enough for the foodservice environment. "In an early test of handheld computer consoles, we had one device that lasted only two hours," Kennedy says.
Full warehouse management and delivery systems take care of the details that allow information to be used rapidly. In a sense, modern warehouse and distribution management systems do the same things that managers always have done. In a modern warehouse, the information management system does such things as scan bar codes on pallets prior to loading to ensure order accuracy in much the same manner that a checker used to work with every truck loader to ensure accuracy. The same job is getting done, but now it is done faster by fewer people with much greater accuracy. Distributors want to accept as many potential deliveries as possible. Modern information systems help ensure that product is available for timely delivery and that each order is operationally efficient and profitable.
