Now is the time to look at your delivery systems, in-home service/ sales calls and driver education.
Warehouse Management by Dan Bolger
Yesterday it took $50 to fill the tank on my fuel efficient Honda. While I was putting in $4+ a gallon gasoline at the Flying J where I go, the truckers were fueling at $4.70 per gallon and spending $600. It reminded me of the recent Rocky Balboa movie. Rocky wants to get back in the game and tells his son that it’s not how hard a hit you can give; it’s how hard a hit you can take and keep moving forward. The Economy Hit and the Fuel Hit are combined brutal punishment for everyone. So what are we going to do to get back in the game?
The Nationwide average diesel fuel cost in 2000 was $1.31 and gasoline was about $1.50. Prices in 2007 per the Energy Information Agency were $2.84 and $2.94 respectively. Their June 9th report showed $4.09 for regular gas and $4.69 for diesel. Some areas are approximately 30 cents higher.
Check out the Energy Information Administration website to get a detailed update of current Diesel and Gas Prices by region along with trend graphs and other information at http://tonto.eia.doe.gov/oog/info/gdu/gasdiesel.asp
And if you are running gas powered cars or delivery vans, check out the useful website http://autos.msn.com/everyday/gasstations.aspx that lists pricing data from over 90,000 gas stations across the nation. Just enter your zip code and find the cheapest price in your area.
If you operate your own delivery trucks, or make in-home calls, now is the time to take a proactive approach to fuel conservation measures. UPS operates 94,500 vehicles. Robert Hall at UPS offers some basic recommendations, to conserve fuel that have been adapted for FURNITURE WORLD Magazine’s readers.
•Plan your route. Consider the best way to get to the locations without backtracking. When taking a long trip, use routing software, maps or Internet sites to determine the quickest and most direct route.
•Avoid left turns. UPS routes are designed to avoid left turns. Idling waiting to turn left wastes gas. Not to mention the cars idling behind you waiting for you to turn. It is also safer to avoid left turns since you reduce the number of times you turn across oncoming traffic.
•Schedule regular maintenance. Maintaining your vehicles can affect gas mileage. Just making sure that the tires are properly inflated can save on fuel economy.
•Drive responsibly. Driving style can affect the gas mileage of your vehicles. Making a fast start from a stoplight or driving over the speed limit can reduce fuel economy. UPS practices safe driving and a "no idling" policy - no matter how short of a stop a UPS driver makes, the engine is turned off.
•Reduce the weight in the vehicle. Unnecessary items in the vehicle can contribute to lower gas mileage. Eliminate anything you don't need.
•Use the car or truck with the best gas mileage. If you have more than one, use the one that gets the best mileage when making long trips. UPS tries to match its vehicle to the needs of its routes.
That’s part of the solution but there are more ways to minimize the fuel costs you can’t control.
1.Do it right the first time. Inspect furniture carefully during prepping to reduce the number of service calls and rejections. Pay attention to the details of loading all the components to eliminate service calls or re-deliveries.
2.Minimize not at homes. In many areas it is a challenge to reach a real person. Some retailers are very firm in saying they must have a confirmation call before the truck can be loaded. If you are not tracking not at homes, you should start immediately and figure out how to reduce them.
3.Use routing assists to plan your routes to save 10% or more. Check software options. One excellent software package can link to the inexpensive Microsoft Streets and trips as well as the higher end products like Descartes RouteView. There are options like PCMiler that are specifically designed for truck routing that can be linked to retail software systems or stand alone. Every major retail software vendor has routing solutions available..
4.Take a close look at making additional in-home service calls. If there is a problem at delivery, have the delivery team call the warehouse and discuss options. You may even send a picture of the problem via cell phone to clearly communicate the issue. In many cases, it is less expensive to bring the piece back to the DC for repair than to send out a service call and then still have to bring it back and redeliver.
5.Motivate your drivers to improve their fuel economy. Reviewing the UPS suggestions is a first step. The next step to post the mileage stats and mpg in a prominent location with small driver incentives to recognize improvement. Retailers have realized at least 10% improvement by implementing this tip alone.
6.Examine all your inbound transportation options. Using a good consolidator in key manufacturing and distribution points can result in fuel savings, faster overall service, less damage and lower overall cost.
7. If you are operating stores more than 75 miles away, consider Demountable Concepts units. For example, CORY Home Delivery serves Bon-Ton’s new Younkers Furniture Gallery in Green Bay, Wisconsin from their Naperville Illinois distribution center, 225 miles distant. Significant fuel and labor savings are gained by a single driver transporting two units on a 53 foot chassis with local Green Bay crews doing the last mile delivery.
8.Keep alert for technology changes for future vehicles. FedEx Corp has logged over two million miles on 170 hybrid-electric delivery trucks that improved fuel economy 42% over conventionally powered vehicles. FedEx said the hybrid-electric also reduced greenhouse gas emissions by 30% and particulate by 96%.
The bottom line is that fuel prices are going to stay high. Learn to live with it and be flexible in considering new options. Times have changed and we have to tough it out, just as Sylvester Stallone has done in each of the movies he has acted in or directed.
Daniel Bolger P.E. provides operations consulting services to clients throughout North America .You can contact Dan at bolger@furninfo.com. For more information on this or other transportation, logistics and furniture warehousing topics, go to www.furninfo.com to read all of Dan’s articles.