We Do Windows
by Rolf Lockwood
It's called the War Room. Mark Verspeeten is referring to his company's head
office in the south central Ontario town of Ingersoll. The Verspeeten family
has been running trucks out of here for some 50 years, and like the town itself,
the transfer company used to rely on agriculture for its financial health. But
that was then. These days, Ingersoll - about 90 at-the-speed-limit minutes from
Toronto's Pearson International Airport - is a manufacturing hub. Among other
consumer items, all those Chevy Trackers and Suzuki Vitaras you see out on the
roads were built there. And the Verspeeten's business has likewise morphed from
hauling veggies into a full-blown logistics firm with 500-plus trucks. Head
office is the star-deck from which the Verspeeten team monitors the trucks as
they follow the transportation arteries that link suppliers to manufacturers
to consumers. The buck stops with Mark Verspeeten: he's the operations manager.
Ninety-nine per cent of his trucks are on a just-in-time (JIT) mission. They're
moving freight to plants that keep no more than four hours' worth of parts on
hand. Verspeeten, like other JIT operators, promises plus-or-minus-15-minute
delivery-time accuracy, so his 14 dispatchers and customer-service reps in the
war room have to predict and work around traffic tie-ups, weather problems,
border hassles, and the utterly unpredictable, all across North America, 24
hours of the day, seven days a week.
The tracking system involves a Star Wars-esque array of computers, on-board
satellite receivers and transmitters, and constant monitoring. Customers can
find out every 20 minutes how far their shipment is from home.
Why go to all this trouble? Because there's a load of wire harnesses that has
to leave a dock in the southern U.S. at precisely 1:30 a.m. so it arrives in
Oshawa precisely 22 hours later, give or take a quarter hour. That's right.
The truck has a 15-minute window in which to arrive and unload. After a 22-hour
haul, through God-only-knows what conditions and at least one driver change
because of hours of service.
And if it doesn't arrive, there'll be dickens to pay. A worst-case scenario?
A plant will have to shut down until everything can get back on schedule. Workers
will be phoned at home and told not to report to the assembly line. We're talking
dissatisfied customers. Really peeved executives.
Mad spouses. If for some reason the load doesn't arrive on time and the plant
is forced to choose between shutting down and hiring a plane to fly a single
part into the plant, they'll often take to the skies and charge the whole thing
back to the trucking company (see sidebar). A late delivery could do you out
of a lucrative business deal.
"Say a driver phones in sick or says he's got engine problems. With just-in-time,
you have to have safeguards in place to know what to do, all down the line.
It's all about communication," says Mark Brennan, vice-president of sales
and marketing at Highland
Transport in Markham, Ont. Highland has about 800 trucks on the road.
"The trucks are the warehouses."
JIT trucking is as unsimple as that.
Sometimes, he says, even the parts that the trucks are delivering are being
manufactured according to the schedule of the auto plants, thousands of miles
Does all this sound like a house of cards? Alex Riddell, a spokesman for CAMI
Automotive in Ingersoll - his company assembles those Trackers and Vitaras -
concedes that it does. Rather, it would, if not for the rigor and discipline
of the logistic companies that keep the parts moving. Riddell, Brennan, Verspeeten,
and others in the industry agree that today, trucking is as much about communication
as it is about combustion. It's just as important to understand the traffic
on the information highway as on the asphalt one.
Not far from where Riddell punches a clock is the town of Cambridge, Ont., home
to Transfreight. With offices in Cambridge as well as in Erlanger, Ky., Transfreight
operates a fleet of about 400 tractors and does a lot of parts shipping for
CAMI and Toyota. And although Transfreight is, technically, a "trucking
company," the company's senior general manager of corporate development,
Robert Martichenko, doesn't see it that way.
"What we do," he says, "isn't trucking. We're a lean logistics
company. We develop logistics strategies. We design lean manufacturing implementation
plans and we help execute those plans. Trucking is one part of logistics."
What Martichenko means is, Transfreight helps clients minimize their inventories
and perfectly time their inbound logistics; a.k.a., just-in-time trucking. JIT
didn't spring up. It is growing in response to Japanese lean manufacturing practices
that have been embraced the world over.
Until three years ago, Transfreight drivers were equipped with cell phones,
CB radios, and phone numbers. Drivers would phone in their departure times,
location, and ETAs. Then Transfreight decided it wanted to put some intelligence
into their truck cabs besides the driver.
"The thing is, we knew we had to manage the information flow as well
as we managed the material flow," Martichenko says.
That's how Synergistic Systems of Neptune Beach, Fla., came into the picture.
With Synergistic, Transfreight developed a tracking system called Integrated
Satellite Intelligence. Computers, satellite communications, and a software
system that Transfreight refers to as "event driven" communications
now augment the lowly cell phones.
In Transfreight's situation, a computer automatically sends messages from
the truck to dispatch when the delivery reaches certain landmarks. Or events.
At any given moment, the carrier knows where the freight is. Dispatch - or the
client - knows when a load leaves the dock, gets stuck in traffic, is slowed
by storms or persnickety border guards, as well as when it pulls up to dock
Martichenko puts it like this: "The freight can never stop moving."
The communication begins with an onboard computer-in Transfreight's case an
MG Plus Mobile Gateway from Symbol Technologies. The MG Plus offers GPS locating,
onboard computing power, and various communications links. One link is to a
dash-mounted cradle where the second onboard computer rests when not in use.
That computer is a handheld Symbol SPT 1800 with bar code scanning. The SPT
1800 runs in batch mode, meaning it stores data in memory to be downloaded later.
When he's waiting on the customer's dock, the driver uses this handheld to scan
bar codes on pallets often containing mixed freight. When he replaces the SPT
1800 in the cradle, freight data is downloaded into the MG Plus, which then
relays that information to Transfreight's servers via satellite.
As soon as a driver picks up the freight, the client gets an Advanced Shipping
Notice (ASN) so he knows right away what has been picked up. But more important,
says Martichenko, is that they know what hasn't been picked up. For example,
if a customer orders 100 pieces of moulding and the supplier only had 75 ready
for the shipment, the factory would know right away and make staffing adjustments.
Transfreight's onboard computers also communicate to wireless systems at terminal
facilities. When a truck enters a terminal gate, onboard data is automatically
downloaded using the 802.11b short-range radio frequency standard. Transfreight
provides its traffic people and customers with maps that show the location of
company trucks in near-real time. Accurate real-time mapping is the key to logistic
Transfreight's monitoring capabilities allow the team to track how long it
takes for trucks to travel through major centers at different times of day -
and they can adjust schedules accordingly.
In as much as Martichenko evangelizes for lean manufacturing and JIT logistics,
he admits that it does come with the risk of the occasional parts shortage in
the plants. The shippers don't like to talk about the possibility of late arrivals
- indeed they sort of give you the impression they never happen. But, as Martichenko
asks - rhetorically - would manufacturers rather have a guaranteed costly huge
inventory or would they prefer living with the slight risk of the occasional
Manufacturers are increasingly vying for the zero-inventory target. Says Martichenko,
"According to Taichii Hono, one of Toyota's lean manufacturing gurus, 'The
more inventory you have, the less likely you have what you need.'"
Martichenko, Verspeeten, and Brennan all see JIT as a defining characteristic
of trucking in the future. And logistical innovations will mean everything.
Martichenko again: "I believe that it's not important to be the best at
what you do. It's important to be the only one who does it. You know who said
that? Jerry Garcia." H
The Oops Guys
Between eight and ten grand. That's about how much you'll pay to have a Lear
jet fire up and fly a single package from where you are to anywhere else on
the continent, as fast as humanly possible. Small wonder the Highlands, Verspeetens,
and Transfreights of this world want to keep their customers satisfied.
There's an army of expediters out there waiting to pick up the pieces of incomplete
or late shipments, and they cost.
As Mark Brennan of Highland Transport says, if your company is responsible
for a late or incomplete JIT shipment, the customer will find a way to obtain
the goods but the cost will come directly out of your pocket.
"Not only do you lose money, it's definitely not good for your relationship,
either," he says. "You could lose the business." The only excuse
that you won't have to pay for would be an act of God.
So, what does a customer get for his eight-grand airfare? Scott Garcher, the
manager of business development for FedEx Custom Critical, which is the expediting
arm of the courier giant, says his company recently moved an auto part from
Toronto to a U.S. auto plant via truck, Lear jet, and then truck. Time? About
Joel Childs, Fedex Custom Critical's vice-president of marketing, says expediting
is a huge growth industry. "We used to be the 'oops' guys. The guys you
turned to when you're in trouble. But now we're increasingly part of the program."
That change came about over the last 20 years, he says, and it coincided with
the rise of JIT manufacturing.