Make: Toward a Paperless Food Chain - Winner 2013 Innovation Award
Tony's is a perishable food distributor on the West Coast. It delivers to grocery stores and specialty stores. Many of the products are frozen and chilled and require special handling throughout storage and delivery to keep them and their consumers safe.
Challenges:
There are two or three recalls a year. "The hardest part with traceability is the sheer amount of touching and documenting," says Mark Geery, chief information officer for Tony's. "Accounting needs to hang onto proofs of delivery for seven years and with paper you have to store them in a file cabinet or send them somewhere to scan them. Printing two-part invoices is expensive and the printers are expensive to maintain. Plus, we would get calls from customers saying they're missing a product and we had no idea what caused that.
Solutions:
Orders brought into the system are allocated for truck routing then sent to the warehouse, where they are picked by associates using voice technology. Orders are palletized, loaded onto trucks and invoiced.
The data are sent to a hosted business application (Airclic) which sends invoices electronically to the drivers' handhelds. The drivers inspect their truckload, scanning pallets to make sure they have the right orders before they close the trailer.
At each stop the driver scans products to match the invoice. The "Food Perform" cloud-based mobile app knows how many boxes the driver should have for the stop, and as he scans, the system tracks order fulfillment. If he should scan an item that's destined for another store, the system will warn him.
Tony's scans each box as they give it to retailer customers, so it has an idea of when the box made it to the store. Many of the calls it used to receive from customers about a short after the delivery have gone away.
Inside Tony's DC, a WMS tracks the P.O.s and knows when pallets are taken to the pick location, when products are picked and which stores went out each night.
Geery estimates a savings of $45,000 a year from going away from printing multi-part forms. The cost of a missed delivery is about $75, factoring in the need to credit the customer, re-order the product, pick it again and redeliver it. Geery says he saw a 30% improvement with scanning.
"The fact we were avoiding 30 missed deliveries a week resulted in an annual savings of $117,000," he adds. "Also, we were storing all those images, and we were spending $70,000 a year on imaging. We didn't get away from all of that but it's a fraction of the cost just storing the signature itself."
Judges' Comments
"Outstanding combination and application of AIDC, mobile computing and the Cloud. Mark Geery has his act together!"—John Hill
"An innovative, integrated solution involving warehousing, transportation, IT and operations."—James Tompkins
"This appears to be a buttoned up operation, providing excellent customer service; great system."—Joe Andraski
"Just removing the printed forms is huge, but improving missed deliveries with increased annual savings, not to mention the unknown collateral lost customers, makes this exemplary problem solving."—Roger Bostelman
"They've migrated to a real time process which also includes the advantage of validation of quantity/product during the entire shipping and delivery process. Traceability is very important in the food industry as tainted products must be recalled immediately. "—Al Will
"This is a great story of innovation and sustainability. Not only does Tony's Fine Foods save on paper costs and reduce waste, the system they implemented reduces errors, which saves on customer returns. So, several ways of increasing sustainability while also reducing cost – great job!"—Alex Scott
