Magazine Article | February 22, 2013

Coca-Cola's Winning Fleet Management Formula

Source: Field Technologies Magazine

By Brian Albright, Field Technologies magazine

With GPS-based fleet tracking, Coca-Cola Bottling Company Consolidated has cut costs by 20%.

As the country’s largest independent Coca- Cola bottler, Coca- Cola Bottling Company Consolidated (CCBCC) produces approximately 160 million cases of soft drinks annually, which are shipped to five production centers and 46 distribution centers in 11 states, generating some $1.3 billion in revenue each year. Keeping that volume of merchandise moving requires a large, complex logistics network — including lots of trucks and trailers.

So although the company is primarily a soft drink beverage bottler, it also has vast experience at managing complicated transportation systems. Recognizing a business opportunity, at the start of 2012, CCBCC established its own transportation division, Red Classic Transit LLC, a $50 million business that not only hauls raw materials and finished goods for CCBCC, but also provides similar services for other bottlers and companies in other industries.

The company currently operates 285 tractors and more than 950 trailers. When the new transportation division was first created, fleet management was largely manual, since the tractors and trailers were primarily moving between company-owned facilities. With the prospect of providing more services to outside customers, the company needed a highly accurate way to manage its fleet assets.

The Costly Challenges Of Complex Logistics
“We needed more visibility of the trailers,” says Dave Hopkins, senior vice president of supply chain operations at CCBCC. “We wanted to know where the trailers were, how long they had been there, and how often they were moving so we could understand what we needed in the system.”

CCBCC also wanted to improve asset utilization within its own network. Because of the scope and velocity of the company’s logistics operations, it was difficult to determine where any given trailer was at any time. Some facilities wound up with an overabundance of idle trailers, while others had to scramble to meet capacity. That meant costly last-minute shifting of trailers, or purchasing or leasing additional trailers at a cost of $300 to $600 per month.

When manufacturing facilities were short on trailers, product quickly stacked up. At the Charlotte production facility, the company had installed an automatic pallet builder with a capacity of 5,000 cases per hour. But there weren’t enough trailers to meet that capacity. The facility had to store the cases, eventually forcing them to shut down the line until they could move the merchandise. That led to additional costs in overtime and delayed shipments.

On top of that, at any given time, up to 10% of the trailer fleet was unaccounted for. With each unit valued at $15,000 to $20,000, the cost of those missing assets quickly added up.

Hopkins and his team conducted an analysis of the trailer inventory. What they found was that the company had plenty of assets on hand; they just weren’t getting to where they were needed in a timely, predictable fashion. Initially, Hopkins began a system of manual yard checks, but because the trailers moved so frequently, the information generated by this time-consuming method was never accurate for more than a few hours.

Manual Trailer Tracking Time, Labor Intensive
“I might have sent a guy out in the yard 10 times to see how many trailers there were and if they were full or empty,” Hopkins says. “In Charlotte alone, we might have 200 trailers in the yard at any given time.”

With all of these challenges, CCBCC knew it needed an automated fleet management solution. The company had two primary goals for the system. “First, we wanted to understand where trailers were,” Hopkins says. “The other piece was, because the trailers were always moving, how do you do maintenance? How do you keep track of them in order to meet licensing and safety requirements? This gives us the ability to track the trailers to where they are sitting and make sure all of the necessary maintenance is done.”

The company investigated a number of locationbased fleet management systems, but many of those solutions only provided a limited view of asset location. After researching its options, the company turned to the FleetLocate solution from Spireon. The GPS-based system from Spireon provides continuous monitoring and real-time data on asset location, at a price point that Hopkins says was comparable with other systems on the market that didn’t provide up-tothe- minute information.

“Their front end is built out extremely well in terms of the information that it provides, the graphics it presents, and the reporting capabilities,” Hopkins says. “We also just liked the company. We’ve been able to build a very good relationship with them.”

GPS Pilot Proves Preventive Maintenance Costs Can Be Reduced
Hopkins oversaw a four-month pilot in Charlotte using 30 trailers. During that test, the company evaluated the battery life of the GPS units and the ability to receive a signal from the trailers even when they were in remote locations. “We found we had good coverage across our entire footprint,” Hopkins says. “When the trailers do go out of range, FleetLocate provides a store and forward feature — all of the location data is stored in the device and uploaded once the assets are back in an area that will allow communication. This means you don’t lose any information, despite connectivity inconsistancies.” The pilot also provided data for the company about how often maintenance crews would need to check the GPS devices and test the batteries.

At the end of the pilot, the company felt confident in its decision and began deploying FleetLocate across its facilities. Since the FleetLocate software is hosted, the only integration challenge for CCBCC was installing the GPS hardware on each trailer. “We coordinated this task with Spireon and worked together over the weekends to install the devices at each location. This enabled us to keep on our regular schedules during the week,” Hopkins says. “It took about six weeks to deploy across all of our locations.”

The GPS units on the trailers provide up-tothe- minute location data, so managers at any facility can locate assets on demand. FleetLocate generates a daily report for each location manager, showing the number and types of trailers on hand, compared to the PAR level (the anticipated number of trailers that might be needed). Regional managers receive similar reports each day. When there is an imbalance, they can quickly adjust the fleet.

Taking Advantage Of Geofencing Capabilities
CCBCC can also create geofences within FleetLocate around its own facilities or those of its customers and set up automatic alerts when trailers leave or enter those zones. That helps keep the company informed about the status of deliveries and allows it to notify customers when deliveries are within a certain distance of their location. Being able to provide this information to customers means that customers are more likely to be prepared for deliveries, which means that CCBCC drivers are able to unload and move on more quickly.

Maintenance operations have improved, Hopkins says. Previously, the company serviced the trailers on a 90-day schedule, regardless of how long they’d been in operation. Now, FleetLocate has been configured with a reporting feature that logs the number of miles each trailer is on the road, automatically triggering a preventive maintenance (PM) alert after a certain threshold is reached. According to Hopkins, this is expected to save the company nearly $400 per unit annually in maintenance costs.

“Before, if a trailer had been out for three months, we just did the maintenance,” Hopkins says. “Now we’re doing preventative maintenance based on hours and miles. We were performing unnecessary maintenance before. And now that we know where those trailers are at any time, scheduling the trailers for maintenance is extraordinarily easy.”

GPS-Enabled Real-Time Visibility Provides Big Benefits
The biggest benefits of real-time visibility have come through better balancing of the trailer fleet at each location. The company operates several types of trailers of different lengths, so managers don’t just need to know how many trailers are available, they also need to know what types of trailers are on hand.

“We can actually look at the throughput of the trailers, how long they sit there, and what types of trailers are present,” Hopkins says. “We can see daily how many trailers we need and what types. We can look at the data and see how many we’re using and the normal throughput for a day; and if the managers are thinking ahead, they can see that if there is an extraordinarily busy day coming up, they can make some adjustments on what they have in the yard.”

The company can accurately measure the throughput of the trailer pool and how long assets sit idle. “If you are paying for an asset and it’s not moving, you’re not making any money — you’re losing money,” Hopkins says.

Since trailer availability has been increased, more transportation capacity is available for CCBCC’s Red Classic division to sell to outside customers, which has increased revenue potential for that part of the company. And now that the company can see how long trailers sit idle in customers’ yards, that idle time can be more accurately billed.

“We didn’t’ have a clear view of where those trailers were before,” Hopkins says. “I either couldn’t do business with certain customers, or I’d have to rent a trailer or do an emergency move. Now that we know where everything is, it allows us to move product for other customers.”

Fleet Management Reduces Trailer Rental Costs By 20%
With FleetLocate, CCBCC has eliminated thousands of dollars associated with buying, renting, and leasing trailers, and it has eliminated delays and bottlenecks that had previously resulted in manufacturing shutdowns. The numbers CCBCC shared prove precisely how valuable the solution has been to the company: Trailer rental and lease costs have been reduced by 20%, and the number of unaccounted-for trailers has dropped from 10% of the fleet to less than 1%. By eliminating the manual yard checks, the company estimates it is saving some 100 man-hours annually.

The information generated by FleetLocate has also given the company a better idea of how many trailers it actually needs at each location. In some cases, that number has been much lower than initially assumed.

The solution also helps the company better manage its inventory processes. Hopkins says the company can now see when trailers have been loaded and unloaded. If a trailer sits unloaded for a long period of time, that indicates that there may be too much inventory on hand. In that case, the company has been able to improve inventory turns and reduce costs by eliminating unnecessary shipments and adjusting inventory levels for those locations.

“One thing we didn’t know before was, if a trailer is sitting in the yard, is it being unloaded or is it just sitting there full?” Hopkins says. “Now we can tie that information to the inventory position of the facility. Are we putting too much inventory in that location? We can save money that way, and get fresher product to our customers.”

Fleet Management Added Bonus: The Ability To Improve Driver Safety
Another ancillary benefit has been the ability to monitor driver speed. “The software showed us that some drivers were trying to make up time by speeding on side roads,” Hopkins says. “This system has helped us to have informed conversations with the drivers about speed and the safety risks associated with speeding. Just the fact that they know we can check on them and give them feedback has helped us tremendously with coaching.”

Finally, Hopkins no longer receives angry phone calls from warehouse managers or customers about missing trailers or shipments. “That feedback has all but disappeared,” Hopkins says. “We just don’t have the trailer issues we had in the past, and it makes for a more efficient operation and happier customers.”

Customizable Reporting Drives Fleet Management Savings

Coca-Cola Bottling Company Consolidated is the largest independent Coca-Cola bottler in the United States, and the managers at its 46 distribution centers have to stay on top of the trailer fleet in order to keep millions of cases of product flowing to customers. When the company deployed Spireon’s FleetLocate GPS-based fleet-management tool, it got more than just a way to view the movement of its trailer assets, says Dave Hopkins, senior vice president of supply chain operations. The company also had a flexible reporting tool at each manager’s fingertips.

“We can use the solution to generate very high-level reports and extremely granular reports,” Hopkins says. “The system lets us filter that data so we can get the right information in whatever context we need it.”

The reporting is fueled by NSpire, Spireon’s multi-vertical M2M intelligence platform, which provides realtime analytics through a scalable architecture and supports over 1.5 million active subscribers, according to the company. Once data is received from the GPS devices in the field, NSpire processes it and assembles a usable picture of asset or driver activity.

The FleetLocate Trailer Tracking and Management Solution Platform provides instant access to realtime trailer intelligence, giving operations managers and dispatchers complete visibility into their fleet. It provides the trailer analytics needed to manage fleets through exception-based reporting, improving performance and asset utilization. Once the data is compiled, users can access the hosted solution via a Web portal to create any number of custom reports.

“We can generate reports showing how long a trailer has been idle, so when we’re trying to decide on the right number of trailers for a location, I can see how many days they sit idle and adjust that trailer pool,” Hopkins says. “It helps us understand where those trailers are and how much new business we can get without having to buy additional assets. We can really determine everything happening with that trailer inside of our orbit.” For more information on FleetLocate, visit