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WHY MOST OUTBOUND TRANSPORTATION MANAGEMENT SYSTEMS FAIL IN GROCERY The 1% vs. The 99% Although you may live in a grocery transportation environment, delivery to supermarkets is relatively rare in the grand scheme of things. There are almost 2 million power units capable of pulling full-sized trailers licensed to drive in the US and another 13 million LTL trucks, yet there are only about 38,600 supermarkets. This means that far less than 1% of the trucks haul groceries to supermarkets. Most solution providers have designed shipper and carrier TMS systems for that other 99%—not for the 1% hauling groceries. To understand why generic systems stumble in grocery, it helps to know where they do well. The majority of TMSs come in one of two flavors: shipper and carrier. Shipper TMSs primarily handle shipping in non-asset based environments. Their goal is simply to ship freight from A to B as cheaply as possible. Shipper TMSs help shippers select carriers, tender loads, and reconcile freight charges, having the effect of working well as inbound systems, even for grocery. Trucking companies generally deploy carrier TMSs in asset-based environments. Carrier TMSs manage their customers, equipment and drivers. These systems typically feature driver scheduling capabilities, intermodal support, brokerage management and currency conversion. Both shipper and carrier TMSs are best suited for one-way shipping models and typically operate with several days of lead-time between when an order is placed and when it is shipped. But the outbound transportation process in grocery is distinct from any other industry for a number of key reasons. For one, grocery transportation is predominantly a round



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trip delivery model: Store clean-up responsibilities and lucrative backhauls, that avoid potentially wasteful return legs of a store delivery, are opportunities missed by systems geared to the 99% of transportation.

Food not freight Unlike freight, the lead-time between order cutoff and grocery delivery is only a matter of hours, not days. Because much of the product is perishable, supermarkets typically reside closer to their distribution centers. Grocery operations optimize orders in large batches then release them to the warehouse. Warehouse staff then select and load the product into trailers in the optimal sequence for delivery. Optimization has to handle constraints such as loading frozen product first, in the nose of the trailer, so it is closest to the refrigeration unit. This is just one of many grocery-specific idiosyncrasies that affect route optimization. On the warehouse floor, large grocery distribution centers often cross-dock general merchandise, dairy or bakery goods and blend them with outbound orders of dry grocery or produce. The timing and sequencing of cross-dock orders is often a complex manual process even though it is critical to the overall scheduling and efficiency of the operation; therefore visibility into such processes is a crucial component of any outbound TMS in grocery. In contrast to general trucking, grocery truckers travel to the same locations repeatedly. Drivers have to hit tight delivery windows varying by day of week and commodity type. Routing is constrained even further by restrictions and curfews for stores in urban areas. All these diverse variables call for the enhanced location management of a TMS specifically tailored to grocery. Additionally, large grocery fleets require an entirely different kind of driver management. These typically unionized environments—riddled with driver seniority nuances, bid schedules and other contractual peculiarities—can greatly affect optimization strategies.

An increasing majority of grocery companies now pay drivers via activity based compensation (ABC) rules based on custom-engineered labor standards, rather than hourly wages or mileage rates. As compensation rules becoming exceedingly more complex, systems unequipped with point-to-point mileage tables or MPH by hour of day will cause additional overhead for payroll. TMSs serving grocery must also interface with legacy order and warehouse management systems, on-board ELD systems, purchase order systems, ERP systems, etc.— each interface bogging down implementation efforts and introducing the risk of yet another breakpoint.

Prospero: 100% for the 1% After over 20 years of deploying to over 150 major grocery distribution centers across the country with a 100% success rate, a dedicated systems provider developed Prospero, a suite of transportation management tools purpose-built for the grocery industry. As a comprehensive solution, Prospero features three major, integrated systems: Outbound, Mobi and Inbound. Prospero Outbound sits at the core of operations and supports dynamic route optimization, online real-time dispatch, ABC driver payroll, backhaul optimization, salvage optimization, reporting and more. From Outbound, dispatchers dispatch trips directly to Prospero Mobi, an FMCSA-registered, certified ELD. In addition to real-time trip updates, Mobi handles DVIR and driver activity reporting. Lastly, for all product coming into your distribution centers, Prospero Inbound manages freight with LTL PO consolidation, tendering, carrier management, dock scheduling and freight reconciliation. With Prospero, all your assets—drivers, tractors, locations etc.—are managed in one location and integral data are shared in real-time. Never has it been easier to make the strategic, cost-saving decisions demanded by the logistics-intensive grocery industry.

7/2/18 2:52 PM

Food Logistics July 2018  

Food Logistics is the only publication exclusively dedicated to covering the movement of product through the global food and beverage supply...

Food Logistics July 2018  

Food Logistics is the only publication exclusively dedicated to covering the movement of product through the global food and beverage supply...