August 2002 | Case Studies | Casebook

A Ripe Market for Automated Routing and Scheduling

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With promises of fresher and more timely delivery of perishable produce, here's how an australian etailer is changing the way today's consumers shop.

Green markets, or farmer's markets as they are more commonly known, were once a core part of everyday life—a central meeting place where farmers came to peddle their produce. While farmer's markets remain popular among fresh-food connoisseurs, a new crop of entrepreneurial online grocers are spanning a far wider divide, literally bringing the traditional green market to the web. In turn, these etailers promise even fresher and more timely delivery of fruits, vegetables, poultry, and fish to 21st-century grocery shoppers.

GreenGrocer.com.au, a Sydney, Australia-based online grocer, is one example of this new phenomenon. Using the Internet as a conduit for customers to place orders, GreenGrocer delivers fresh fruit, vegetables, flowers, prepared foods, meat, and seafood to foodservice chefs and consumer households in Sydney and Melbourne.

Starting out in 1997, the e-grocer successfully leveraged the dot.com boon and an increasing demand for next-day delivery of fresh produce to grow into Australia's leading food e-tailer.

As a small operation, GreenGrocer operated with an optimal logistics strategy, matching supply to demand and operating with no inventory; but it performed all of its scheduling and routing manually. As the business and the demands of its customers grew, GreenGrocer began looking for an automated order scheduling and routing solution to eliminate inefficiencies.

At the same time GreenGrocer was looking for an automated fulfillment solution, Descartes Systems Group Inc., an Ontario, Canada-based developer of supply chain solutions, was soliciting potential clients to implement its proprietary Fleetwise routing and scheduling solution suite.

"We hunted GreenGrocer out," says Craig Jones, regional vice president, Asia Pacific, Descartes. "We had this new basic technology that we were looking to deploy into an organization that we felt had a good chance at success.

"GreenGrocer was outsourcing from fresh food markets. It would get the orders in the night before, go to the markets in the morning, take them to a crossdock for repackaging, and deliver to customers in the afternoon," Jones adds. "From its beginning, GreenGrocer's focus was entirely on being able to deliver fresh foods on a next-day basis."

The challenge for GreenGrocer was finding an innovative way to scale its operations so it could manage delivery time windows and optimize fleet utilization—with the ultimate goal of providing greater service to customers.

A Wise Choice

In 2001, GreenGrocer selected Descartes' Fleetwise solution portfolio to automate its scheduling and routing processes. For its purposes, GreenGrocer deployed Descartes' Fleetwise Reservations and Route Planner solutions.

Fleetwise Reservations is a net-native solution for setting appointments and scheduling deliveries. The tool enables customers to request delivery windows while an optimized appointment booking agent matches available resources and delivery windows. Fleetwise Reservations rationalizes requests, prioritizing customers based on their relative importance, whether measured by sales volume, profitability, class of trade, types of purchases, or any other matter. According to these metrics, the routing engine then establishes an optimized delivery schedule, minimizing route lengths and fuel usage while maintaining desired shipping windows for customers.

Using Fleetwise Reservations, GreenGrocer customers can log onto its web site to schedule their own delivery in real-time when they place their order. The system also allows customers to pay a premium for a tighter delivery window if they need expedited delivery.

Once an order has been placed (orders made before midnight are guaranteed next-day delivery) Descartes' Fleetwise Route Planner calculates time of day, size of order, traffic patterns, and geography to create an efficient scheduling and routing plan. As each order is received, the schedule is re-optimized in real time, reallocating resources to optimize operating efficiencies, deliver priority service, and maintain customer service objectives. Not only does this solution facilitate the speediness of delivery, its efficiencies trickle down into other supply chain processes, enhancing communication and information sharing between GreenGrocer's purchasers, crossdock workers, and drivers.

While the option is available to give driver's routing instructions, "GreenGrocer is more interested in tracking where it's at in terms of performance—where a vehicle is at any point in time as it makes its way through the route," says Jones. "Fleetwise allows its workers to measure performance, but most importantly, it enables them to manage exceptions."

At the moment, information is communicated using a dispatch device, providing GreenGrocer's drivers with route schedules and drop-off windows, notes Jones. "The intention is to move toward them being deployed over mobile devices, so they can track where the vehicle is on that route at any point in time."

To date, the implementation of Fleetwise has had a marked effect on GreenGrocer's ability to fulfill growing customer and market demands.

"Our 99-percent delivery rate is a direct result of the streamlined approach to processing and filling orders enabled by Fleetwise Route Planner," says Barry McDonald, CEO, GreenGrocer.com.au. "Now our drivers can simply follow a route printed from the system, instead of arbitrarily assigned delivery zones."

There has also been a tangible impact on the total time it takes to fulfill a shipment, from order to delivery.

"We shaved one hour off our loading time for each route by using the invoices produced by the Descartes system to streamline vehicle loading and minimize handling of the groceries," adds McDonald.

"WoolWorth" the Effort

Not surprisingly, the success of implementing Descartes' Fleetwise suite is manifesting itself in GreenGrocer's ability to compete with its "brick and click" peers.

"With its model, GreenGrocer is beating the major retailers in terms of product freshness and timeliness of delivery. In the grocery retail industry, that is a significant differentiator," adds Jones.

GreenGrocer's rapid growth has not gone unnoticed. In 2001, Woolworths Limited, a leading supermarket chain in Australia, acquired the online grocer and has since integrated it into its network of companies. Opting to retain the name and the technology rather than fold its assets into its own online grocer, Homeshop, Woolworths is planning to integrate both companies and the Fleetwise solution in the near future. The companies will operate independently of each other, but share the same dedicated fleet of carriers.

For both Descartes and GreenGrocer, "the partnership has proved the notion of linking order-taking with fulfillment in a single process," says Jones. "They have succeeded in bringing back-end operations into the front end of the business."

For GreenGrocer's frontline sales reps—its drivers—Descartes' Fleetwise solutions have had a positive impact on their ability to satisfy customer needs. "Because they're the only human contact in the entire transaction, happy drivers mean happy customers," says McDonald.

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