On course; sophisticated routing software is putting United Beverage on the map - beer distribution

Modern Brewery Age, Jan 22, 1990

On Course Sophisticated routing software is putting United Beverage on the map.

"You've got to find a way to deliver customer's beer when they want it, merchandise properly, and keep your costs in sight," says Steve Poley, vice president of operations for Houston, TX-based United Beverage. According to Poley, by switching from driver-sold to pre-sold operations and installing a computer to support the transition, United is managing to do what all distributors strive for - meeting their customer service goals and increasing their sales volume simultaneously.

According to Poley, United is the beneficiary of a fortuitous combination of geography and population factors. The distributor is located in the middle of Harris County, TX, touted as the third-largest beer-consuming county in the United States.

"In Harris County, Miller holds 43 to 45 percent of the market share and Miller Lite is number one," Poley asserts. "Our territory includes downtown Houston, the convention center, the Astrodome, the Summit and the Galleria - approximately 200 square miles and 3,000 accounts.

"Some time ago we realized the company faced three main challenges in our distribution operation," Poley observes. "Maintaining efficiency while meeting tighter backdoor hours; enhancing customer service by getting people out of the office and into the stores; and improving the driver schedules and delivery routes.

"For starters," Poley points out, "we had to find a way to handle our customer's reduced back-door hours. While the back door at most grocery stores used to be open from 7:00 until 3:00, nowadays some retailers are closing the back door at 12:00. A few of our customers have even restricted their back door hours to as little as 90 minutes - from 9:30 to 11:00. And they're very large accounts." Another concern Poley recalls was the company's desire to field more personnel. "For every one person that works in the office, we wanted four people out in contact with the customers. Whether it's a territory manager, a driver, a merchandiser or a supervisor, we realized we should be out there in the stores."

The first step in the right direction, according to Poley, was a switch from a driver-sell system to pre-sell. "When we first switched over," Poley recounts, "two dispatchers spent 13 weeks creating new routes for the territories. Four weeks later they were out of date. Accounts opened and closed and promotions changed," he says. "We realized we had to find some way to automate routing."

Having seen a story on routing and scheduling software in a technical magazine, Poley called Routing Technology Software, Inc. in Vienna, VA and requested a demonstration of the Roadshow computer routing system.

"Among the reasons we initially liked Roadshow was that it used a mouse and the menus looked like Lotus menus," Poley explains, "features that our people were already familiar with. As a result, we felt we could operate it without hiring a dedicated routing technician."

The company put Roadshow on-line, and Poley says United began to see results rapidly. "We had wanted our dispatchers to spend most of their time out in the field supervising drivers," he says, "and since Roadshow doesn't need a technician it has worked out that way. By using Roadshow we reduced the dispatching and routing part of their job to just 25 percent."

According to Poley, an important benefit of Roadshow was that it helped United to question many of its basic business assumptions. "During those first six months, Roadshow reviewed our business account by account," Poley says. "During this process, we found that 20 percent of our delivery time is spent behind the wheel driving - and we wanted to minimize that, because we don't make money behind the wheel. Another big surprise for us was that about 30 percent of the time was dolly time - physically moving the beer."

"This left only half the time for merchandising," Poley reports, "and our objective is to get all stores properly merchandised. The bigger we make that portion of the job, the better service we give and the bigger market share we get - that's where the battle is."

According to Poley, when he reviewed United's merchandising goals against the time that was actually spent merchandising, he learned United's goals weren't being met at all. "In high volume accounts, we thought we should average about 40 minutes merchandising," he says. "When we broke it down, we discovered that in some accounts we had been spending two hours while we weren't spending any time at all on others. The rules that Roadshow helped us develop for our business also forced us to come to grips with how much merchandising we were really doing in each account.

"Another thing we found out with Roadshow," Poley says, "is that we have two distinct groups of customers. One group, made up of large volume accounts like grocery stores, requires early morning delivery by a very large truck, a 20-bay vehicle crewed by a driver and assistant.

"The second group of accounts tends to be bars, taverns and clubs," Poley continues, "which are late openers. If you have a bar that doesn't open until six p.m., you can't have the same driver who serviced the grocery stores at seven a.m. make a delivery to that later account.