An example of UPS developing and marketing technology.
Technology makes fast food hot
Source : Chicago Sun-Times
June 27, 2007
BY SANDRA GUY Sun-Times Columnist
Online grocer Peapod is using new route-planning and vehicle-tracking software to get groceries to customers' kitchens more efficiently.
"We've been able to
decrease route-tracking costs by 30 percent in the past four months," said Ken Fanaro, senior manager of logistics and transportation planning for Skokie-based Peapod. The company, owned by grocer Royal Ahold of the Netherlands, declined to disclose its total costs.
The savings come from Peapod's decision to bring its vehicle-tracking software in-house instead of outsourcing it to an application service provider, a company that rents software to other companies.
Ken Fanaro, senior manager of logistics and transportation planning for Peapod stands in the control room in Skokie, where the company keeps track of its fleet of delivery trucks.
Peapod's goal is to
use as few trucks as necessary, and to
keep the same number of employees in Peapod's routing center while the company's sales and
customer count grow 20 percent a year.
Peapod started planning a new routing system before the skyrocketing cost of gasoline, so those cost savings are an extra benefit, Fanaro said. The intricate Peapod routing system starts at the Smart Mile, a logistics war room in Skokie where the e-tailer's
300 grocery-packed trucks are routed to 285,000 customers in
18 markets in 10 states. Peapod will expand to four more markets on the East Coast this year.
Smart Mile has eight full-time employees.
Peapod's new software,
called Roadnet, comes from another major truck-routing company -- UPS. It actually started 24 years ago as a brainstorm of beer, paper and food company owners in Baltimore who wanted to make their delivery routes more efficient. The three men started Roadnet Systems Corp., which UPS bought 21 years ago and recreated as UPS Logistics Technologies.
The software program is based on what's known as the "traveling salesman algorithm," for its theory of using the shortest route to meet every potential customer and return to a starting point.
UPS used the technology to develop its electronic brown clipboards, said Cyndi Brandt, marketing manager for
UPS Logistics Technologies.
The company's consultants spent 10 days at Peapod installing the system and training employees.
UPS constantly upgrades the software to take into account Peapod's complicated issues,
such as customers' delivery preferences, whether a customer's
dog bites or the types of food being delivered, Brandt said.
The software costs $50,000 to $60,000 for a company with 25 trucks. The price varies by fleet size. For smaller companies, the company offers Roadnet Anywhere, a subscription-based software that costs $110 a month per vehicle.
The software includes a global positioning system that tracks the trucks. Peapod drivers use cellular phones to sign into the tracking system and report their movements. At the same time,
Peapod uses UPS' Mobilecast system to see whether a driver has been speeding, veered off his route or spent an unusually long time at a customer's house.
UPS Logistics Technologies, which competes with Appian Logistics, Arc Logistics and Roadshow by Descartes Systems Group, is finding new competition in increasingly sophisticated GPS systems that drivers can use on their own. Adrian Gonzalez, director of consulting firm ARC Advisory Group, in Dedham, Mass., said, "It's worth millions to knock off the cost.
A 5 percent reduction in transportation costs is equivalent to increasing sales by 30 percent
I do not ever remember seeing it come back out or delivering it again. Could it be that it was shipped to an alternate, the person signed and then said Oh wait it isnt mine, and someone never corrected it on the info system, and even tho it shows up del'ds to the same addy, it was actually another? Im perplexed?
truck. Who ever got that approved gets my vote for Einstein of the centuty.
