By replacing paper-based procedures with electronic ones in a key part of its supply chain, Whitbread, the UK leisure group, has been able to slash costs by nearly £200,000 a year, improve efficiency and reduce errors.
Whitbread’s food logistics (WFL) team is responsible for delivering food stock to each of the company’s 1,400 sites in the UK, which include the Costa, TGI Friday and Beefeater restaurant chains. Although the company had an automated warehouse management system in place, it still used a cumbersome paper-based system for recording delivery information, says Jonathan Abbott, a business systems analyst and project manager at WFL. “Before going out on delivery,” he explains, “we would give the drivers all their delivery paperwork, so they would go up and sit in the canteen and go through it, checking it was all there. When they came back from delivery, they had to make sure all their information was handed over to the clerks in the office. Often they would have to stand and wait because there would be a queue to get to the admin clerk.”
This work at the beginning and end of each shift took about 30 minutes out of each driver’s day. As well as being time consuming, the process was open to error because the administrative staff had to decipher handwriting on the forms before keying it into the warehouse management system.
When the company decided to close its Manchester-based distribution centre, and to carry out all deliveries from a single centre in Reading, it was time to take a different approach. Because the paper forms would now be travelling longer distances, it could take 36 hours for a form to be returned from, say, Glasgow to Reading. Furthermore, if it continued with the paper-based system, WFL would have had to recruit five new administrative staff at Reading to enter the data.
The solution that WFL implemented was based on Blackbay’s Delivery Connect platform, and dispensed with paper forms altogether. Instead, drivers were supplied with mobile devices on which to enter the delivery information, which would then be transferred wirelessly to the warehouse management system.
To implement the solution before the Manchester centre closed required operating to a tight timescale. After some classroom training, and a day on the road with a trainer, the drivers were handed the new Psion Teklogix mobile devices. “For the drivers, it was quite a cultural change,” says Mr Abbott. “They had been using paper for years and a lot of them were not PC-literate, so to give them a handheld computer was quite a challenge. But immediately from the initial training sessions we got a strong feeling that they liked the solution so it was just a question of managing them through that change and giving them the confidence that they would be able to do it.”
The system, which launched in last autumn, is now used by 120 drivers. Delivery information is recorded on the mobile device, and sent wirelessly over Vodafone’s GPRS network to a system hosted by Blackbay in Canary Wharf. The data is then transmitted over a virtual private network to the WFL information centre in Maidstone, Kent. The time taken to input the delivery information to a central database is now a matter of minutes, rather than 24 to 36 hours.
The implementation has resulted in substantial savings, says Mr Abbott, who believes Whitbread will see a return on investment within 20 months. By not having to recruit five new administrative staff in the Reading office, the company has saved £125,000 a year, with a further £10,000 saved on annual paper costs. Because the drivers no longer have to spend time checking the paperwork at the beginning of the day or handing it in at the end of their shift, they are now able to carry out more deliveries and perform some warehouse jobs in unstaffed outbases. This has resulted in an additional saving of £60,000 a year.
There have been softer benefits, too. Because information is going directly from the handheld devices to the warehouse system, the number of data entry errors has been reduced. The company has also seen a cut in the number of delivery errors. Previously, mistakes, such as the wrong quantity or the wrong goods being delivered, would not have been noticed until the paperwork was returned. Now, says Mr Abbott, the information is available instantly, so staff at the delivery centre have the opportunity to identify and redress the problem.
“With the information coming back on to the delivery monitor,” he says, “we were able to establish that perhaps there had been a cross-pick in our warehouse and we were delivering potato wedges instead of chips. We could then go onto the warehouse floor and make that change, so that subsequent routes would not have the same problem.”
The real test of the solution’s success, says Mr Abbott, is in the response of the end users: “We had some difficulties a few weeks in and we were not able to send the drivers out with the handheld that day, and they were all quite upset about it. In IT you only get told when there’s a problem, and that was the first time that we knew the solution had been a universal success.”
