High mileage fleet supplies Jason's deli

Quick, name four well-known things about Beaumont, Texas.

Janis Joplin grew up there — pretty easy, right? The East Texas oil boom began with the discovery of the Spindletop field nearby in 1901 — it's in all the history books. Billy-ball is the fast-paced brand of offensive basketball run by Billy Tubbs during coaching stints at Oklahoma and TCU and being practiced at Lamar University where Tubbs graduated and is now coach and athletic director — a little more obscure. The first Jason's deli opened there in 1972 and company headquarters remain in Beaumont.

That first Jason's deli had only 12 items on the menu and could seat 40 customers at full capacity. Before long, new restaurants opened in Tyler, Texas, and in Dallas. By the 1980s, Jason's had its first franchised operation in Tucson, Arizona. Today, the Jason's deli name can be found on 128 restaurants in 16 states from Arizona and Nevada to Florida and North Carolina. The company opens an average of 15 to 17 new locations every year. Roughly 75% of this growth results from opening corporate stores. The new restaurants cover an average of 4,500 sq ft, seat more than 200 customers, and offer more than 100 menu items.

Most Jason's deli locations provide catering services as well as operating as restaurants. In fact, some locations generate almost as much from catering sales as from on-site sales. It only takes a few big commercial customers such as Dell Computer in Austin, Texas, to ring up heavy catering totals, says Dane Douthit, director of distribution.

Rapidly growing chain

The current store count shows 74 corporate locations and 54 franchise restaurants. The three largest markets are the Dallas-Fort Worth area with a total of 23 restaurants along with Houston and Atlanta. Considerable growth is expected in the Carolinas and Florida in the near future. In addition, a deli is soon to open in Iowa, taking over the northernmost position in the chain from a deli in Ft Collins, Colorado.

Those wishing to become a Jason's deli franchise owner face some fairly high hurdles. The company web site lists capital requirements as net worth of at least $500,000 with the ability to borrow sufficient funds to cover operations until cash flow begins to pay for costs. It says the total cost of opening a Jason's deli franchise can range from $670,000 to $895,000. In addition to access to capital, applicants for a franchise must show five years experience in restaurant management.

Franchise operators can purchase food and supplies from any vendor they choose. The only constraints on franchisees are that all purchases must match specifications set by corporate headquarters. Neither franchisees nor corporate stores are allowed to purchase product overruns, overstocks, or closeout merchandise. Once a product has been approved by Jason's deli corporate headquarters, vendors are prohibited from changing the product specifications. In addition, vendors must provide proof of $3 million in general liability insurance for each product Jason's buys.

Although corporate headquarters is in Beaumont, distribution for Jason's deli restaurants is located 300 miles away in North Central Texas in Arlington, halfway between Dallas and Fort Worth. The entire corporate entity behind Jason's deli is known as Deli Management Inc. Although Arlington provides a fairly centralized location for supplying the far-flung restaurant network, placing distribution there resulted more from chance than strategy.

DMI purchased vendor

The company was founded in 1972 and purchased food and supplies from outside vendors for 28 years, Douthit says. By 1996, DMI had settled on Webb Foodservice, a small wholesaler in Arlington as its primary vendor for food and paper products. In early 2000, changes in the status of some Webb managers led DMI to consider becoming a self-distributing restaurant chain. “Once the decision to become self-distributing was made, the change, which involved purchasing Webb Foodservice, took place in a matter of weeks,” he says.

The changes at Webb were relatively minor, Douthit says. One of the two company principals became ill, and the other was nearing retirement. Purchase by DMI seemed to be the most logical choice to maintain distribution continuity. In fact, the transition took place almost seamlessly. One of the reasons is that of the 12 office personnel currently working for DMI in Arlington, nine were working for Webb when the purchase became official on May 15, 2000, he says.

Volume doubles in four years

While administration has remained constant, delivery operations have exploded. This is in response to growth of the Jason's chain. DMI does not solicit business from or sell to customers outside the Jason's network. In May 2000, Webb Foodservice had eight trailers. DMI currently operates 23 tractors, 29 refrigerated trailers, and two refrigerated straight trucks. All equipment is owned by the company with tractors purchased new and trailers bought used from truckload carriers. Stevens Transport in Dallas is a good source for high quality, five-year-old refrigerated trailers, Robert Huskey, director of transportation says.

The trailer fleet contains a mix of equipment from Great Dane, Trailmobile, Utility, and Wabash National. Recently, Kenworth has been the tractor and straight truck supplier of choice. However, the fleet still contains tractors from International and Freightliner.

The only purpose of DMI is to get the best product at the best possible price to restaurants on time, Douthit says. On-time performance is tracked in 15-minute intervals for the first three increments followed by one-hour intervals. Objectives for delivery set a goal of 95% on-time performance within 15 minutes of scheduled arrival and 97% on-time within 30 minutes of the planned schedule.

DMI usually reaches those objectives, Douthit says. “With some of our long routes, we've been late at times, but we've never missed a delivery,” he says. “The way our restaurant network is organized, failure to deliver simply is not an option.”

30-minute stops

Stops are planned to last 30 minutes during which the driver delivers an average of 300 to 325 pieces. Drivers help arrange delivered product in restaurant store as requested by the manager.

Some stops are quicker, because drivers are the only ones involved. At these key drops, made while the restaurant is closed overnight, the driver puts product away, checks order accuracy, and signs the delivery receipt. Key drops are available both to company restaurants and to franchisees. When the restaurant opens the next morning, the manager checks the delivery again.

The distribution network is built around two deliveries per location per week. Trucks and drivers are in Arlington on Sundays and Wednesdays. For the rest of each week, they are involved in nonstop delivery with each vehicle averaging 150,000 miles a year. In 2003, the total fleet logged 3.3 million miles.

The annual mileage average of 150,000 miles can be a little deceiving, Huskey says. Some of the equipment logs as much as 350,000 miles a year, while equipment on local routes in Dallas and Fort Worth struggles to reach 30,000 miles annually. Running as much as 350,000 miles a year with one tractor requires the work of two driving teams. As soon as a tractor returns to Arlington, it is coupled to a loaded trailer and dispatched again with the second team, he says.

800,000-mile tractor cycle

With such a wide variety of annual mileage, moving tractors from route to route to maintain fleet balance becomes important. New tractors go on the high mileage routes for about a year before moving to other routes. The goal is to run tractors 800,000 miles before replacement.

Routes are planned for teams running two days at a time for most of the coverage area. Only three of the 29 weekly routes are handled by solo drivers. DMI has one three-day route for restaurants in Arizona, because the truck goes on to California to pick up meat in Burbank after deliveries are finished. Routes in the Dallas-Fort Worth area and to Houston are completed in one day. Actually, DMI runs two trucks to Houston on a daily basis. Deliveries are finished by 9:30 am and the equipment is back in Arlington by 2:30 in the afternoon. One of the two Houston routes also makes a backhaul pick-up before starting the return trip. If northbound freight is available, DMI operates as a third-party LTL perishables carrier on the return from Houston.

The weekly schedule dispatches 14 routes late on Wednesday and 13 routes on Thursday. In addition, the system contains two routes that leave Arlington on Tuesdays and Fridays.

The order processing system is built around receiving store orders by 9 am on the day prior to route dispatch. Orders are received by fax for all locations except those in the Dallas-Fort Worth area. Those restaurants order using a Pocket PC system, which may be expanded to the entire network at some future time.

DMI sells about 1,000 separate items of which about 500 are considered disposables such as food and paper products and the other 500 are restaurant supplies. These totals include more than 175 perishable items — either chilled or frozen — and 50 items proprietary to Jason's deli. “We want to handle everything a restaurant needs except bread and produce, Douthit says. “To make that possible, for instance, we are a Coca Cola distributor. We stay away from produce for an extremely simple reason: to maintain the quality of produce our restaurants sell would require us to provide delivery six days a week. For example, a typical Jason's deli sells a minimum of five flats of fresh strawberries every day. We can't get to every store from Arlington six days a week, and we certainly can't maintain the quality we need with two deliveries a week.”

To keep deliveries on time, the warehouse works both day and night with a crew of 10 during the day and 14 at night plus four supervisors — a warehouse supervisor and assistant supervisor aided by one day and one night supervisor. The day crew receives and stocks inbound merchandise; both day and night crews select and load outbound orders.

With a constantly growing restaurant network, routes are planned to serve four to five stores each with an average of 2,000 pieces in the load. With a high paper and foam plastic content in each delivery, trailer loads almost always cube out before the trailer reaches maximum gross legal weight. Backhauls may be fairly heavy, but outbound loads are usually closer to 65,000 lb than the 80,000-lb gross weight allowed by law. DMI allows routes to grow to a maximum of seven stops. When it becomes necessary to add an eighth stop to a route, it is split into two routes with four stops and the growth pattern repeats. Routes are designed to remain stable for about six months at a time, Huskey says.

With so few stops per route, planning and dispatch still runs on a manual system; although, DMI has begun to look at routing and load optimization software for the future. Fleet tracking is simple as well; it depends on GPS-enabled cell phones. The @Road tracking system updates locations every five minutes and posts them to a web site for users. The only requirement for making the system work is that drivers must keep their cell phones turned on, Douthit says.

New tractors, used trailers

DMI's tractor fleet is relatively young compared to the trailers. In 2004, the company will add five T2000 Kenworth tractors to the eight T600s already in service. Two of the new tractors will be for growth; three will replace older tractors. New tractors are powered by Cummins ISX-450 engines driving through Eaton Fuller FRO-15210B 10-speed Roadranger transmissions and Dana Spicer DSP40 tandem drive axles with a final drive ratio of 3.55:1. On 11R22.5 tires, this drivetrain combination allows for a maximum speed of 88 miles per hour in top gear with a top governed speed of 65 mph with the cruise control engaged.

Tractors run on Bridgestone tires with Alcoa aluminum wheels on the front axle and Accuride steel wheels on the drive axles. DMI carries 240 gallons of fuel in twin 120-gal tanks under the sleeper berth on each side. To accommodate driving teams, the tractors have double-bunk 75-in Aerodyne sleepers.

Maintenance is performed in-house and is based on an extended oil drain interval. DMI uses a 15W40 multigrade mineral oil from Hydrotex in Carrollton, Texas. Huskey explains mineral oil is used, because it mixes with other lubricants, allowing drivers to purchase fill oil easily while on the road. In contrast, the fleet uses Mobil 1 synthetic oil in transmissions.

Extended oil change interval

The standard oil change interval for the DMI fleet is 45,000 miles. The maintenance program is built around inspecting tractors and checking oil carefully at 15,000 miles followed by a fuel filter change at 30,000 miles. At that maintenance interval, an oil sample is drawn for analysis. Unless analysis indicates a potential problem, no additional action is taken until the 45,000-mile mark.

Trailers start life at DMI already five years old, because the company says it can buy used trailers and modify them for foodservice delivery for about one-third the price of new trailers. As soon after purchase as possible, trailers go to the dealer for modifications that include removing the swing doors and replacing them with Todco overhead doors. After the rear frame has been modified for the overhead door, a Maxon 5,500 lb lifting tailgate is installed to allow ground level delivery at restaurant locations. The process is not complete, but DMI plans to put lifts on all trailers.

Three delivery routes need trailers with side doors, so DMI is having three of its 53/102 refrigerated vans modified with curbside doors. Refrigeration units come into the fleet as used equipment also. Huskey says he looks for units that have logged less than 5,000 hours.