December 2004 | Case Studies | I.T. Toolkit

Bad Boy Makes Good With Customers

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A web-based logistics solution helps retailers satisfy customers with tight delivery windows.

Customers may love your products, but make them wait too long for deliveries and their feelings are bound to grow cool.

"The main concern our customers have today is time," notes Murray McMichael, distribution manager at Bad Boy, a Toronto-area retail chain.

Without a firm idea of when to expect a home delivery, a customer might spend much of the day fuming while waiting for a truck to arrive.

Officials at Bad Boy wanted to do better. The company sells furniture, appliances, and electronics from five showrooms in metropolitan Toronto, delivering products to those stores, and to customers' homes, from a central distribution center.

Twelve independent drivers make the home deliveries. In the past, Bad Boy relied on those contractors to determine when they would arrive at each stop. Of course, some drivers estimate better than others. Work styles vary; so does traffic in different parts of town.

"We actually had lists at each dispatching desk," McMichael says. They pointed out, for example, that one truck usually covered its first five stops by 10 a.m., while another would need until 11 a.m.

Armed with this sketchy information, employees called customers in the morning with a four-hour delivery window. "If we thought the driver would be there at noon, we told the customer to expect delivery between 11 a.m. and 3 p.m., just in case the driver ran into difficulties," McMichael says.

Where's the Driver?

Keeping track of drivers' progress was also an imprecise art. After each stop, a driver used a cell phone to report on the completed delivery. But with only two lines devoted to these calls, drivers often got busy signals.

"Sometimes the driver would say, "Forget it. I'll call after the next stop,'" McMichael says. "So he'd make two or three calls at the same time." Until he did, dispatchers had only a vague idea of where the driver was.

As McMichael looked into improving customer service, he noted the example of Grocery Gateway, a local online grocer with a reputation for telling customers accurately when their orders would arrive.

A neighbor's positive experience with a Grocery Gateway delivery motivated McMichael. "That customer's experience got me interested in improving our service," he says.

It was a bit of serendipity when Bad Boy got a sales call from Cube Route, a Toronto-area vendor of logistics technology for delivery operations. Several Cube Route executives previously worked for Grocery Gateway; its CEO was a founder of the e-grocer. The original owners sold Grocery Gateway to another firm in 2004.

Executives at Bad Boy listened to Cube Route's presentation, "and we liked what we heard," McMichael says. "Cube Route is a small company; we're a small company as well. We felt they were giving us good service, and we could learn together," he says. Bad Boy started using Cube Route's system in early 2004.

Cube Route designed its suite of web-hosted logistics services to meet the needs of small companies that deliver goods to consumers, or to other businesses. The aim was to give these companies functions such as route optimization, dispatch management, and customer notification without requiring them to make a big up-front investment, says Greg Rossi, Cube Route's director of operations.

The technology Grocery Gateway implemented to manage its deliveries was expensive, Rossi explains. "We spent millions of dollars buying the technology, and millions more integrating and implementing it," he says. Grocery Gateway had backers with deep pockets, but most small companies aren't that fortunate.

Cube Route offers its solution as a pay-as-you-go, web-hosted service. After a $2,500 set-up charge, Cube Route bills the user based on the number of deliveries the system handles.

"The more stops a company makes per month, the less it gets charged per stop," Rossi says. "No service contract is required, so if a company doesn't like the system, it just stops using it."

Along with Bad Boy, Cube Route's system is used by several food service distributors, a large ice delivery company, a firm that distributes packaged snacks, and a major online grocer in the United States.

The typical Cube Route customer operates in a metropolitan area with 15 to 100 trucks, each making perhaps eight to 30 stops per day, Rossi says.

For each client, Cube Route develops a web site that the client's employees use to interact with the system. Dispatchers, customer service representatives, and other office-based personnel access the system through a computer browser; drivers use web-enabled cell phones.

Cube Route's system calculates an estimated time of arrival (ETA) for each delivery stop. The system monitors drivers' progress and gives users information about their deliveries. Some Cube Route clients use the system to optimize delivery routes; those that already have routing software, or whose drivers follow fixed routes, often forego that service, Rossi says.

Each night, the user uploads a flat file, containing data about the next day's deliveries, to its Cube Route web site. The system builds routes for the drivers or receives routes the company provides. Then, using data it has stored about the time required to drive between different points in the region, it calculates an ETA for each stop.

Delivery Window Cut in Half

Each morning, the Cube Route systems lets customers know when to expect their deliveries. Bad Boy uses an automated telephone system to place the calls, starting at about 7:30 a.m. Instead of the four-hour delivery window Bad Boy formerly provided, the system narrows the ETA to two hours, allowing customers to better plan their days, McMichael says.

The automated system also improved efficiency for Bad Boy. "When there are 160 phone calls to make, it takes my staff a lot longer than the automated phone calls take," McMichael says. Instead of making calls, company representatives can concentrate on post-delivery follow-ups with customers.

As drivers move from stop to stop, they use the data interface on their cell phones to report their progress and transmit other information about deliveries. Bad Boy's drivers use phones with built-in global positioning system (GPS) receivers, so the system can track their location even when they are between stops.

Bad Boy customers wondering about the progress of their deliveries can call customer service and get an immediate answer because representatives can find the information online, instead of having to place customers on hold to call dispatchers. If customers call the showroom, the response is just as fast.

Previously, "sales associates would have to call the delivery department to find out where a truck is," McMichael says. The sales associate can now look up the information in the store.

"Salespeople don't want to be tied up on phone calls," he says. "They want to be on the floor trying to sell."

A link from the Bad Boy web site to the Cube Route system also lets customers track orders on their own. Each user determines what data it wants its drivers to capture, and Cube Route designs the interface accordingly.

A company that delivers to retail stores, for example, might capture data about returned cases, or note the temperature of fresh products as they're dropped off. A company such as Bad Boy, which delivers to consumers and accepts cash on delivery (COD), can capture data about money collected and the method of payment used.

Collecting COD information in real time allows the accounting department to close the books on those orders right away, rather than waiting for drivers to arrive the next morning with information about their collections, McMichael says.

Generating Reports

Besides helping to manage deliveries throughout the day, Cube Route's system uses the data it collects to generate a variety of reports that companies can use to monitor driver performance or evaluate commercial accounts.

Bad Boy uses daily, weekly, and monthly reports to keep tabs on its fleet. "For instance, I can see whether I have a driver who has a lot of damages, or a driver who's slower than the others," McMichael says.

Also, because drivers note any defects that appear in the items they deliver, Bad Boy uses the reports to monitor product quality.

The ETAs that Cube Route calculates are generally accurate; drivers arrive within the promised two-hour window about 95 percent of the time. And Cube Route is constantly improving the system by comparing predictions with actual drive times and refining the algorithms as needed.

Cube Route also has helped Bad Boy endear itself to customers. "We've had nothing but positive feedback," McMichael says. "The system addresses the main complaint of our customers: "When is my delivery coming?'"

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