Painting a Picture Of Private Fleet Profit
Sherwin-Williams' private fleet integrates its dispatch system with PeopleNet to brush up on efficiency.
Many private fleets struggle to balance the primary mission of serving the corporate owner with the ideal of becoming a self-supporting profit center.
Such was the case with Sherwin-Williams, the largest producer of paints and coatings in the United States. Founded in 1866, and based in Cleveland, the company reports annual sales of $7.8 billion.
Since 1982, it has operated its own private fleet for product distribution to 3,000-plus company-owned stores. The Sherwin-Williams fleet regularly leases approximately 350 trucks, and escalates to as many as 450 trucks during peak activity periods.
During a 2005 assessment of its dispatch system, the company determined that it was strong on internal matters, but needed to better meet its broader asset-utilization goals.
Sherwin-Williams began that effort by searching for a dispatch system that would be compatible with its recently implemented Global Positioning System (GPS) from mobile communications and onboard computing provider PeopleNet, based in Chaska, Minn.
"Our goal was to improve asset utilization and reduce empty miles," recalls Rick Ashton, Sherwin-Williams director of transportation. "We were looking for software that would interface and interact with the PeopleNet units."
System of Choice
Sherwin-Williams eventually chose a dispatch system designed by TMW Systems, a Cleveland-based enterprise management software company that serves the trucking industry exclusively.
The implementation's success depended on its ability to reduce deadhead miles and improve overall performance, according to David Mook, chief operating officer of TMW Systems.
"Private fleets tend to approach dispatch systems from a supply chain standpoint," Mook says. "While they are sensitive to maintaining logs and monitoring drivers' time, they aren't typically focused on optimizing asset utilization. Compared to commercial carriers, private fleets tend to run more deadhead miles and use assets less efficiently.
"Some systems designed for private fleets are good at measuring landed costs, but fall short when identifying backhaul opportunities and streamlining overall transportation costs," Mook adds. The TMW system's goal is to help private fleets run as profitably as for-hire fleets.
The TMW dispatch system meets that goal for Sherwin-Williams by helping integrate the company's pursuit of backhaul opportunities with information already in the system.
"The system readily identifies lanes that we run," Ashton explains. "We service our stores on a regular schedule every week, so we build consistency in those runs. But the system also lets us pinpoint where we're running non-revenue lanes—empty miles—and focus on trying to fill them."
To achieve this goal, Sherwin-Williams empowers its internal sales team to sell backhaul miles. "We deliver to our stores, then try to sell backhauls from where those trucks terminate," Ashton says. "We'll travel a reasonable distance to get the backhaul."
Designing the dispatch system to help private fleets identify and quickly take advantage of backhaul opportunities was simple, according to Mook.
"It's like playing let's-make-a-match," he explains. "The system can analyze multiple loads and drivers with different starting points, and calculate the optimal connections."
The TMW dispatch system logs nearby companies that have used Sherwin-Williams for backhaul services in the past, and serves them up when the company is searching to fill empty miles. By using a variety of tools, filters, and views, the system narrows down likely opportunities.
"Assigning backhauls to drivers is a balancing act, trying to ensure all drivers are getting their miles," Mook notes. "It doesn't make sense for one driver to get 3,000 miles a week and another only 1,000 miles a week."
By taking such factors into account, the system not only reduces empty miles but also helps Sherwin-Williams better balance driver payroll against the use of driver hours.
At the same time, Ashton says, the new system automates the collection of information—making logs more reliable and easier for drivers to administer. The changes were initially disconcerting to some drivers, but have since proven beneficial.
"We were able to automate driver payroll," Ashton says. "Instead of drivers spending hours every week manually entering all their stops on trip sheets for payroll purposes, we now capture driver information through the PeopleNet unit in conjunction with TMW, and use it to calculate their pay."
Dispatching Made Easy
The process of delivering paint to Sherwin-Williams stores and other distributors has also been made more efficient by the use of tools that simplify tasks for dispatchers.
"By using the TMW system in conjunction with PeopleNet, we are able to improve how we communicate with our trucks," Ashton says. "Display units have been installed in each truck, enabling us to dispatch and communicate directly with the drivers without having to use cell phones or other devices."
These tools will only grow in importance as companies expect more of their private fleets, according to Mook.
"The slippery slope of private fleets is that once you start moving longer hauls, you need more sophisticated technology to manage them," he says. "While it's easy to think of transportation as a straight line between inbound and outbound, in reality it's often a triangle or polygon."
Dollars and Sense
To help shippers use their enterprise systems to enhance value and make more effective decisions, TMW has added tools such as an overall optimization kit that includes fuel calculations.
"Enterprise tools can help determine if taking a load makes sense," Mook says. "For example, a fleet gets $8 a mile to make a run, which is a good rate, but leaves the driver off in Orlando, Fla., and he's stuck deadheading out of there. Sometimes taking a load makes sense, but sometimes it doesn't. Enterprise tools provide the means to make more efficient decisions."
By using interfaces with its regular order management system, Sherwin-Williams has improved its dispatcher-to-driver ratio. Because most of the fleet's activity is within the company—shipping paint to 3,200 company-owned stores—this interface is easy to establish and utilize.
The system also anticipates drivers' availability and matches them with anticipated delivery needs—a function tailor-made for private fleets.
"It allows us to pre-schedule driver trips, so we can load in two or three different runs," Ashton says. "As soon as the next trip comes up, the driver is ready to go."
Having posted solid results from its utilization of the system to date, Sherwin-Williams is now looking at ways to apply it to other needs.
"We're implementing the same system to do our fuel-tax calculations," Ashton says. "We're currently capturing all that information, so drivers can be less concerned about it."
Patience Pays Off
While the full return on investment in the dispatch system was not instantaneous, Ashton's team is now seeing the results they had hoped would justify the implementation.
"A lot of people have invested work in the system, and endured a lot of stress during the last three years," Ashton says. "And now we're starting to see the payoff. The practical implications are in place, and we're working on utilizing the information we have readily available to us to manage our fleets more effectively."