Brief Case Study

There is a food distribution company that was operating around 40 trucks on any given day.  In general, the trucks departed according to the mileage on their route from the base, beginning in the wee hours of the morning; and most would not return until late afternoon or evening – regardless of their respective loads and/or stops scheduled for the day.  At that time, the office was receiving many complaints from customers that their orders were not being delivered on time, which in turn created problems in customer operations.  As per ususal, the truck drivers were being paid on an hourly basis, with a time-and-a-half overtime rate.  This was adding up to a whole lot of grumpy customers and a great many expensive labor hours.

Waypoint was hired to help remedy the situation.  We developed a method to quantify each trucks’ load in terms of time and labor required for each day’s delivery.  With the help of the drivers, the loaders, and the IT people, we began to see and understand each truckload as an amount of work.  After a testing and verification period, we successfully shifted the basis of drivers’ pay to a variable daily route and load basis.

The results were striking.  Once the drivers understood that they were not being paid for their time, they began to arrive back in the yard mid-day!  Long hours and overtime were all but eliminated.  Additionally, there were no more customer complaints of late deliveries; only driver complaints that the customers weren’t yet open or ready for their delivery by the time they arrived!  (And these issues could be easily fixed by changing the order of delivery.)

In the end, after the drivers’ initial resistance, they were thrilled to be making the same or better pay, and spending far fewer hours on the road.  The company was saving buckets of money in operating costs, and the customers were singing praises of the company’s improved quality and service.