I need to address what quality tools would be recommend to collect and present data to the VP of Huffman Trucking for a type of quality improvement process targeting truck/trailer accountability, using a GPS tracking technology for Huffman Trucking company.
Quality tools that you would recommend using to collect and present data from this type of process.
I need to address what quality tools would be recommend to collect and present data to the VP of Huffman Trucking for a type of quality improvement process targeting truck/trailer accountability, using a GPS tracking technology for Huffman Trucking company
The information below is about the company as well as some back up information.
Huffman Trucking History:
A native of Cleveland, Ohio, K. Huffman founded Huffman Trucking in 1936 with a single tractor-trailer. The growth of the company was the direct result of World War II and the increased demand for carrier services between factories in the Midwest to ports on the East Coast.
By 1945, the fleet had increased in size to 16 tractors and 36 trailers. The business relationship forged with the U.S. Government continues today.
Huffman Trucking continued to grow from internal sales and the acquisition of five Eastern regional carriers. This growth has enabled Huffman Trucking to continue to be privately held.
Our Company:
Our Mission - To be a profitable, growing, adaptive company in an intensively competitive logistical services business environment.
Our Vision - To be a model company to our stockholders, employees, customers and all stakeholders.
Facts about Huffman Trucking:
Huffman's primary customers include:
• U.S. Government
• Automotive parts suppliers to major manufacturers
• Electronic consumer products
• Raw materials (polymer) for manufacturers of plastic products
• Any customer requiring special accommodations, such as wine, computers, munitions, etc.
Huffman has facilities in:
• Cleveland, OH
• Los Angeles, CA
• St. Louis, MO
• Bayonne, NJ
Huffman employs:
• 925 drivers
• 425 support personnel
Huffman owns and operates:
• 800 road tractors
• 2,100 45' trailers
• 260 "roll-on/roll-off" units
Huffman's rolling equipment undergoes preventative maintenance every 25,000 miles in the Cleveland, Ohio maintenance facility.
Huffman has been recognized as the 1st major freight carrier to outsource 100% of its information systems support.
Huffman Trucking has classified its customers into two types based on the size of their yearly shipment requirements, Type L and Type S. Type L, for large, covers those companies having continuous, year-round shipping requirements. These customers negotiate yearly contracts with trucking firms, such as Huffman. They include automotive parts suppliers, manufacturers of consumer electronic products, and the U.S. Government. The annual volume of business from Type L companies is very large and steady throughout the year. However, because of the competitive nature of acquiring these large yearly type contracts, profit margins are low. Type S customers, for small, include those customers that have sporadic shipment requirements during the year and walk-in customers that have single or occasional shipping requirements.
While yearly volumes from Type S companies can be estimated from the company’s records of past orders, forecasting these requirements on a weekly basis is very difficult to do due to the random rate at which these orders are received. While profit margins from these customers are higher than those obtained from larger customers, the volume from these small companies is much, much lower.
Huffman Trucking is used by the Pontiac, Michigan plant of Riordan Manufacturing, to deliver the custom plastic molded parts it produces to its customers. Since the items this Riordan Manufacturing plant produces are special plastic parts manufactured to specifications provided by Riordan’s customers, the size of the cardboard boxes Riordan provides that are used to package the parts for shipment varies from part to part. Also, full truck load shipments of parts are not always practical from a customer’s inventory point of view since some parts are physically very small. A full truck load of these small parts might represent a year’s supply to a Riordan’s customer. Since companies are always attempting to minimize the amount of inventory they carry, they order the items from their manufacturer, Riordan in this case, in small amounts, usually to meet monthly requirements, or in even smaller quantities if they are operating in a just-in-time mode. The schedule for receiving the special parts however might be so critical to a customer that they would be willing to pay a higher shipping rate to receive a less-than-full-truckload shipment just to meet their specific need dates. Huffman understands that meeting customer need dates on time is one of the important services he must provide. Huffman also realizes that overall, low cost and service are the keys to winning and maintaining customer loyalty, especially from large customers.
In addition to providing typical customer services, Huffman also recognizes that a variety of more specific customer expectations must also be met for different customers since each customer’s needs varies from each other. In the area of deliveries for example, customers typically expect satisfactory shipping performance in four ways; fast deliveries, on-time deliveries, minimum variability on shipment arrival times, and zero shipments damage. In the area of billings, customers expect timely and accurate billing information and payment terms and conditions (T & Cs) that are favorable to them. And in the area of schedule flexibility, customers expect to be able to make schedule and shipment changes at a moments notice without incurring any penalties such as additional costs. Huffman attempts to provide all these services.
When negotiating shipping contracts with companies Huffman normally identifies a number of preferred dimensional specifications for the shipping containers that customers use. The shipping containers, whether they are free standing carton boxes or a number of boxes strapped to a pallet, must maintain specified length, width, and height dimensions in order to fit within a trailer’s inside dimensions to assure the trailer’s cargo space is effectively utilized. This standardization of packaging sizes assures that the trailer will hold the maximum volume of cargo it was designed for which will in turn further result in lower shipping costs being charged customers. This standardization of packaging dimensions also helps Huffman to estimate the number of items being carried and from that, the total required load and unload times for shipment scheduling purposes.
Since the shipping rates Huffman uses are normally quoted to large companies for full truckloads of items, customers need to know ahead of time how many items can be carried in a truck trailer. Knowing what the inside dimensions of a trailer are and what the dimensions of their individual shipment containers are, companies can then determine for themselves how many containers they can ship per truck trailer. Knowing the dimensions of the containers also helps Huffman to determine if any special shipment handling equipment, such as roller ramps or fork lift trucks, will be required to unload the truck at its destination.
Huffman must also determine if the locations the items are being shipped to have receiving docks or if the shipments must be unloaded from the trailers to street level and then moved inside a customer’s facility using hand trucks. Moving items by hand truck will result in additional labor charges that will be included when shipping cost estimates are prepared. All information on shipment size and handling requirements are reviewed by Huffman personnel in determining shipping costs to assure nothing is left out.
Another typical customer requirement is to receive shipments during their normal 8:00 am to 5:00 pm working day. Huffman attempts to schedule shipments to arrive at the customer’s facility between those times. If a truck arrives before 8:00 am in the morning, the truck driver must wait until the customer’s receiving gate opens at 8:00 am. If it arrives after 5:00 pm, the driver knows he will have to wait until the next morning to drop off the shipment. This waiting time adds an additional expense to the trip. An additional charge is included if it is known ahead of time that the truck driver will have to spend the night at a destination and deliver his cargo the nest morning.
A significant element of operating costs is truck expenses. Huffman’s trucks use diesel fuel and, like gasoline, they are subject to fluctuations in fuel prices at the fuel pump. Huffman recognizes that being able to use less fuel may give its competitors that are driving newer trucks with higher efficiency engines, a competitive cost advantage.
Fuel and labor are significant elements of cost that impact profits. The challenge to Huffman is to determine when fuel and labor costs have risen to the point that they should pass them on to the customers. Huffman has attempted to keep track of what its competitors are doing in this regard.
All of Huffman’s trucks are 10-18 years old and are not as fuel efficient as the newer trucks that are on the market. Mechanical breakdowns are also occurring more frequently as each year goes by. Preventative maintenance on the trucks is performed periodically to a controlled schedule to minimize these breakdown problems. However, as the trucks get older, maintenance costs have been increasing.
In addition to the standard 45 foot trailers, Huffman Trucking has a number of “roll-on/roll-off” trailers that it uses when transporting military vehicles for the U.S. Government such as the Department of Defense’s Army trucks, Hum-Vees, and tanks, or other customer’s vehicle types such as farm equipment.
The shipments from Huffman’s Type S customers, the small and walk-in customers, that are combined in one trailer load present Huffman with a challenge. The challenge is to figure out the most efficient way to load the trailers and to schedule deliveries of each shipment in order to minimize total delivery time and shipment handling requirements since the shipments will be delivered to different destinations. Minimizing shipment handling is important from a labor saving point of view but also because Huffman’s history has shown that damage to shipments occurs in proportion to the amount of handling the shipments receive. Huffman feels that to minimize damage, it must minimize handling of the individual shipments.
Customers can deliver their shipments to a Huffman facility. Huffman will also pick up shipments from customer’s facilities for an additional charge. When shipments are received at a Huffman facility, they are placed in a staging area. When sufficient items have been collected for a full or reasonably full trailer load, a map of the delivery route the truck will take is prepared. The map shows where each shipment in the truck’s load is to be delivered and in what sequence. These items are then loaded on the trailer in reverse order to the order in which they will be unloaded. For example, the last item to be unloaded at the end of the trip is loaded first, up front in the trailer. The next to last item to be delivered is loaded next, and so on to the first item to be unloaded. It is loaded on the truck last and therefore is the first item seen when the truck doors are first opened. By loading in this manner, the only part of the cargo that needs to be handled at any one time is the next order to be unloaded.
Huffman occasionally has the problem of determining before hand when sufficient orders from the Type S customers will be received to fill a truck trailer and from that, when to schedule the deliveries of each order. Customers may be given estimated delivery dates since exact dates may not always be known until a full or reasonably full shipment has accumulated. Most of the time sufficient shipments are received during any one week to allow Huffman to give its customers a reasonably firm ship date, such as the following Monday. At other times, shipments have been delayed 1-2 days in the hope that additional orders would be received.
Huffman prices each shipment of a small business and walk-in customer based on the physical volume of the shipment, the value of the shipment, shipping distances, availability of a shipping/receiving dock at the destination, additional manpower requirements if there are additional or special handling requirements for a shipment, and whether any special material handling equipment would be required to unload the shipment.
Roll-on/roll-off trailers have different charges from those of regular trailers due to different load-on and load-off requirements. Each trailer also has a maximum load weight it can carry. When using these trailers, the weight of the cargo being transported must be taken under consideration to assure weight limits of the trailers are not exceeded. Weights of exceptionally heavy cargos must also be considered is selecting which roads to use, especially if bridges have to be crossed since some smaller roads and bridges have weight limitations. Since these trailers are also open to the elements, cargo that is weather sensitive, such as to rain or snow, may require weather protection coverings such as tarpaulins. These are included for an additional charge.
To provide a reasonable estimate of shipping times to Type S customers, shipping routes are checked carefully to determine road conditions, especially in winter, road sizes such as single lanes versus multiple lanes which may mean lower speed limits are in affect, road clearance requirements if any, heights of bridges the trucks must pass under to assure sufficient clearance exists, road areas that are under construction that may result in transportation delays, and speed limits on the highways, back roads and in towns and cities. Street conditions affecting traffic within cities are difficult to evaluate sometimes without visually seeing the streets. Because an eighteen wheeler truck and trailer requires a large turning radius when making turns at street corners, especially narrow streets, Huffman leaves it up to the truck drivers to determine which city routes they will use when they arrive at their destinations.
Below is the Huffman intranet memo from which the recommendation came from.
Memo:
To: Dinah La Douce, CIO Emmett Meinder, VP Equipment & Maintenance Graham Grove, VP Industrial Relations
From: Kristen Huffman, CEO & President
Re: Fleet Tracking System
I would like your input regarding the use of a Fleet Tracking system across our operations. I’ve talked to peers in the industry who have used it and they say that it is a worthwhile financial investment. They have seen returns from both fuel costs and insurance liability in less than 9 months from implementation.
This is not a small decision to make. The union has heard about this and from what I gather, they are not in favor of using such a system. I’m not 100% in favor either. I need to be convinced that it either is or is not a good idea for our business.
In the past, we’ve had some discussions about vehicle tracking, but they never went very far. But it was evident at the VIP reception at last year’s Great American Trucking Show that these systems are being adopted by some major companies. The show had a number of vendors who sell turnkey fleet tracking systems. Among them were:
- Telogis’ OnTrack system
- ATI’s Shadow Tracker system
- TransCore’s Global Wave product
This is not entirely a financial decision. My peers tell me that for a fleet of our size, we should be thinking about a cost of $100 per vehicle per month. Beyond that, though, we need to think about non-financial benefits (delivery times, marketing goodwill) and non-financial costs (labor relations, technology expertise).
I will follow up with you about next steps. More than likely, I’ll want a presentation for the shareholders detailing a go/no-go decision. Thank you.
VEHICLES:
Detailed data on each vehicle for Huffman Trucking is in this table.
- VIN
- Type ID
- Class Code
- Put into service Date
- Gross Weight
- Mileage
- Purchase Price
- Accumulated Depreciation
- Taken out of service Date
- Capacity