Techniques: Microcases

Distribution

Problem: Unwieldy dispatching system
Solution: A turnkey product for monitoring fleets
Payoff: Highly efficient driver scheduling

As the CEO of Maricopa Ready Mix, a 10-month-old concrete supplier in Scottsdale, Ariz., David Hudder knows he ought to control his costs whenever possible. But as a 25-year veteran of the concrete industry, Hudder also knows there's only so much he can do.

The costs of the materials that he needs to make his product -- water, cement, sand, gravel -- are essentially fixed. The cost of the trucks that mix and deliver the concrete doesn't vary much either. Then there's the cost of driver hours, an expense that's traditionally controlled through efficient delivery scheduling. To maximize efficiency, a dispatcher needs constant knowledge of the fleet's whereabouts. But since most trucking companies still use a taxi-type dispatching system -- a two-way radio combined with the driver's dashboard status box -- such knowledge often proves elusive. "If a driver forgets to push a button, you don't know the status of the truck," says Hudder.

Which is why the CEO was incredulous when FMS Mobile Networking, a software vendor in Chandler, Ariz., showed him a demo for a new type of dispatching system -- one that could lead to unheard-of scheduling efficiencies, which would in turn lead to cost savings for the 60-truck business. "We think it's as revolutionary as the two-way radio," Hudder says.

"It" is a product called Galileo (480-961-0409; $2,000 to $2,600 per truck, plus monthly fees), a system that is currently available only in the Phoenix and Tucson areas and in Las Vegas and Houston. Using a satellite-based technology known as a global positioning system (GPS), Galileo allows a dispatcher to view in real time every Galileo-loaded truck within a 70-mile radius -- without the drivers' having to do a thing. From sensors installed in the trucks' doors, dashboard, and cargo area, data is electronically transmitted to the dispatcher's computer via FMS's wireless network. And dispatchers get access to more than just mapped-location data: FMS's sensors can measure vehicle speed and battery voltage, as well as the length of time a driver spends at a location.

Galileo also has a tool that lets a dispatcher highlight a given area -- say, a 10-block section of a city -- on his screen and receive alerts whenever a truck leaves the area. The tool has been a boon to Hudder, because most of his customers don't accept concrete that's been mixing for more than 90 minutes. Now a dispatcher can monitor whether a truck's supply will make it to the next destination in an acceptable amount of time.

While quick to praise Galileo's capabilities, Hudder admits that he has yet to fully implement the product, which he purchased last spring. He expects to tie in the software with Maricopa's back-end systems for billings and payables by the end of the year. The delay, he says, stems from his basics-first approach. "There's a lot of training involved," admits Rich Rudow, FMS CEO and president.

Rudow says his technicians can wire three or four trucks a day, so a 50-truck company -- to which he'd assign two technicians -- would be done in a week. But it takes time for dispatchers and trucking executives to learn all of Galileo's features. FMS sends "corporate trainers" to spend a day or two with new customers and also provides phone support with personal backup.

For now, Hudder is thrilled with the cost savings he's realized. He notes that Galileo "has been a large factor" in Maricopa's productivity in two key metrics: yards of concrete produced per truck per day and yards of concrete produced per driver per hour. The company has been profitable since its fourth month, and Hudder anticipates revenues of $15 million this year. "We've only scratched the surface of what Galileo can do, and we're still light years ahead of anything available in the industry," he says.