Sept/Oct 2003

Safeway and its logistics contractor Wincanton have centralised and streamlined collections and deliveries in a programme in which tracking and mobile data play an essential role. Peter Rowlands reports

Controlling a large multi-depot distribution operation from a single central point has been the holy grail of the logistics world for many years. A number of big fleet operators and third-party contractors have attempted it with varying degrees of success, but now supermarket giant Safeway and its logistics contractor Wincanton have come up with a system that they reckon is well ahead of anything else in the field.

Telematics play an integral role in the system. Not only is every truck in the operation being fitted with a new satellite-based tracking and location system; trailers are also being tracked separately by an RFID (radio frequency identification) system as they enter and leave each depot.

Highlights of the system include real-time integration between vehicle tracking and the operation's Paragon routing and scheduling system; and geofencing of depots, so that staff can be alerted automatically when delivery vehicles are about to arrive.

 

Underlying these leading-edge developments has been a wide-ranging integration programme called Project Pulsar, which draws together and coordinates the supermarket company's whole order-processing and distribution planning system. Altogether 14 different supplier companies have been involved. As Safeway's supply chain director Mark Aylwyn puts it: "Not all the technology is new. What is new is that everything is now working together."

Safeway delivers to its 500-odd UK stores with a fleet of over 700 trucks, which work from 19 depots (regional distribution centres, in common parlance). In the past, deliveries were planned by depot. Now the country has been divided into six much larger regions, each taking in several depots, and deliveries are planned on a regional basis.

Not only that, but supplier collections are now also being planned in conjunction with stores deliveries. Even collections from suppliers for delivery to third-party consolidation centres can be scheduled for the same vehicles, as well as movements made on behalf of other supermarket chains (something that happens increasingly in this market).

"The result is to reduce empty mileage and improve operational efficiency," Aylwyn says. He will not be drawn on the exact scale of the savings, but puts them at "millions of pounds a year".

Developed in-house

Wincanton has contributed its Integrated Management System (IMS) to manage the operation, giving Safeway an overview of the supply-chain activities of all 19 of its depots and all its primary and secondary distribution vehicles. IMS was developed largely in-house by Wincanton itself, and is hosted at server farms in the towns of Yate and Wincanton. It is built on a Microsoft SQL Server database, and the company has used Microsoft Access and Visual Basic to create and fine-tune the user interface.

Orders originating at the retailer's Hayes head office are processed through a "nerve centre" at its Northampton depot, where IMS performs functions such as splitting them into regions and attaching prearranged delivery time windows to each. They are then passed to the Paragon routing and scheduling system to plan into vehicle movements. Paragon is run on six PCs - effectively one for each region.

Local control is preserved, since these "first cut" schedules are sent to the depots themselves for fine-tuning. Each depot has its own Paragon multi-user terminal, so the schedules can be amended interactively by local staff before being passed to the despatch department for assembly and loading. Afterwards the actual schedules are passed back to the IMS system, where they are archived and used for analysis and performance reporting.

At the depots, the loading details are displayed in what has been named the Front Office system, which can also take data feeds from the vehicle tracking system - providing on-site despatch staff with up-to-the-minute information on vehicle positions and load details. This system is built on a Progress database.

Perhaps the most immediate and visible change resulting from the new system is that some deliveries are now handled by vehicles based on depots nominally serving adjacent areas, rather than being confined purely to the vehicles allocated to the relevant depot. Between 100 and 200 routes are considered together in the planning for each region. Paragon's graphical output has been set up to highlight these cross-depot operations in different coloured displays.

On return journeys, collections from suppliers are now being scheduled for the store delivery vehicles. Initially 200 suppliers are included in the system (out of a total of over 2,000). In phase 2 of the project, which is currently approaching completion, details of all suppliers are being gathered into a new database, making it easier to integrate them into the transport planning process.

Vehicle tracking

One of Safeway's key objectives in the whole project has been to maintain control once vehicles are out on the road, so that its distribution planners can react to delays and traffic congestion. The company is no newcomer to vehicle tracking, having been using a Qualcomm system for the past six years. However, its earlier system was retrospective, whereas Safeway wanted something that would feed operational data into its new management system in real time.

It put the new project out to tender, but in the event has chosen Qualcomm again, and a new system is now being fitted in all vehicles. This features Qualcomm's own in-cab unit, with integral text-based screen and keyboard; and unusually, it includes a fuel sensor to measure actual fuel used. (Many rival systems merely measure calculated fuel consumption.) Qualcomm uses the Eutelsat satellite network for both communications and positioning, although it can also offer more conventional GSM or GPRS comms where requested.

By adopting a version of Paragon called Integrated Fleets, Safeway has gained the ability to feed information from the tracking system back into the scheduling process, and produce new plans "on the fly" according to real-time events.

The company acknowledges that you can't always simply redirect delayed or reserve vehicles to different delivery locations; they won't necessarily be carrying the right products in the right proportions, or be in the right place at the right time. "But we can amend plans and forward orders to take account of the problem," Aylwyn points out.

A further benefit of the real-time tracking capability has been the opportunity to create "geofences" round each store, so that a pager alert can be sent to staff at stores automatically when a delivery vehicle is ten minutes away. Delivery delays at stores have been recognised as an expensive problem, and the company sees the possibility of significant savings here.

The trailer tracking system, which has been implemented in association with OMI International, has involved fitting an active RFID tag on the roof of every trailer (there are said to be approaching 2,000 in the system). This transmits a signal that can be detected by sensors fitted to gantries above the entrance to each depot.

The data gathered from this system is being fed into the IMS system in Bristol, injecting information into it in real time on the whereabouts of every trailer in the fleet. Initially the data is being transmitted by modem link, using software by Paradigm, but later TCP/IP Internet links will be adopted instead.

The phased implementation of TCP/IP connectivity is intentional. In the initial stages of the Pulsar scheme Safeway has retained the use of fast fixed links throughout its wide area network to avoid introducing a further layer of new technology at the same time as ITS itself. However, TCP/IP connectivity is part of the ultimate programme, and in the meantime, some functions are already handled in an Internet-oriented environment.

A good instance of this is seen in the IMS reporting system, which is based on Crystal Enterprise reporting technology. This provides detailed on-screen reports similar to those produced by Access and by Crystal's own stand-alone reporting system; but they are presented in an Internet browser shell, and don't require a full installation on each user terminal.

Yard management

OMI is also installing its MDS Yard & Dock management system at Safeway's six largest depots (those with 150 or more vehicles), and data on arrivals and departures is being fed into this. In such depots experience has shown that it can take staff several minutes simply to find specific trailers - a delay MDS should virtually eliminate.

MDS integrates with Safeway's IMS system and with its warehouse management system, drawing on predictive logic and dynamic scheduling to organise equipment movements. It also provides a graphical drag-and-drop interface to allow staff to intervene manually and "move" equipment around interactively.

Throughout Project Pulsar, the borderline between the contributions of Safeway and Wincanton has been somewhat grey. Both companies like to emphasise the closeness of their working relationship, which has been developed over a twenty-year involvement. In many cases staff from one company will report from day to day to a manager from the other.

Graeme McFaull, Wincanton managing director for the UK and Ireland, sums up Wincanton's contribution as falling into three categories - integration, change management and supplier management. With its 130-strong in-house IT team, Wincanton was certainly well equipped to take on the development work on the new project.

Perhaps the last word on the whole project should go to supply chain director Mark Aylwyn, who says: "I'm not aware of anyone else using all this technology as an integrated solution." Nor are we.