Hutting Building Products. - Routing Technology Helps Save Millions
The Challenge
- Rising pressures from delivery costs and declining sales
The Solution
Appian DirectRoute™ from TMW Systems
The Results
- Idling reduction saves fuel
- Reduced trip mileage
- Fleets right-sized
Huttig Building Products, recognized as a leader in the building products industry, has revolutionized its industry by using innovative processes to provide an unparalleled commitment to customer service. The over 120-year-old company is among the largest distributors of building products in the US. Honored by Fleet Owner Magazine as a 2007 “Fleet of the Year Award” finalist, Huttig has led the industry not only in quality products but in innovative business practices that have helped the company maintain its industry-leading position. The company’s core competency is not only as a wholesale distributor but as a manufacturer. With manufacturing facilities attached to the majority of its 36 distribution branches, Huttig manufactures a wide range of pre-hung doors and moldings.
Challenges
The construction industry was hurt by the housing slowdown in 2007. Record foreclosures, a growing unsold housing inventory, and slowing sales of new homes all contributed to negative growth in the industry nationwide. Huttig successfully managed the downturn and reduced costs, thanks in part, to the use of Appian’s DirectRoute™ – Route Optimization Software from TMW Systems. DirectRoute has enabled Huttig to match a 25% drop in sales with a 19% reduction in transportation costs, resulting in a savings of $40,000 per month at just one branch.
In the past, because of their fixed-route structure, if there was a dip in sales the resulting dip in transportation costs might lag a few months behind. With DirectRoute, Huttig can now see those trends tracking simultaneously. The extent to which they can hold their delivery cost as a % of sales through both upturns and downturns in the market goes straight to their bottom line.
After thoroughly analyzing their transportation operations and route building process, Huttig quickly discovered changes that would produce significant savings. Given that they were in the process of rolling out PeopleNet On-Board truck computers at every location, they seized the opportunity to improve their route operation as well.To automates the routing process.
Increased Productivity, Less Idle Time
With knowledge in hand, Huttig embarked on a continuous-improvement effort in 2006 to instill best practices and retrain branches that had been originally rolled out on DirectRoute 5 years earlier. Jeff Fei, Corporate Manager of Fleet and Operations Reporting, said, “We began our analysis by looking at the current operations of our fleet of trucks. We started out with 300 trucks and focused on increasing productivity while reducing idle time,” he said. “Idle time was significant for each truck. We changed our procedures to have the drivers turn off the vehicle while delivering shipments. The savings were realized immediately. By shutting down the engines there was a savings and we also achieved greater savings by optimizing our routes.”
'Tremendous' Fuel Savings
Huttig’s Director of Operations, Don Black, spoke about how using route optimization software along with GPS tracking software benefits the company.
“We analyzed our current processes by using GPS tracking. We reduced the RPMs in the engines in our straight trucks and tractors. By reducing our RPMs we saved on average a half gallon to a full gallon of diesel fuel per mile. On average a truck can get 5.7 miles to a gallon of fuel. With lowering our fuel consumption we have seen tremendous savings. We drive approximately 10 million miles per year. When optimizing routes we have learned by removing 6 miles out of a route we save a gallon of diesel fuel. We have successfully removed $2.5 million dollars from our budget by reducing fleet, manning, optimizing routes, and GPS tracking. We began with 300 trucks and are currently operating 270. The amount we invested in purchasing Appian’s Direct Route-Route Optimization Software for the entire company was paid for by the savings at the Phoenix branch. We have revisited 27 of our branches already and the goal is to have all 36 covered by the end of 2008 so the savings can be realized company wide.”
“When optimizing routes we have learned by removing 6 miles out of a route we save a gallon of diesel fuel. We have successfully removed $2.5 million dollars from our budget by reducing fleet, manning, optimizing routes, and GPS tracking. We began with 300 trucks and are currently operating 270.”
Don Black
Director of Operations
