Distribution connects the dots. The search for enhanced productivity challenges foodservice sales departments and operations departments to cooperate fully to move the dots on any given route closer together. In the case of the Fadler Company of Tulsa, Oklahoma, the dots comprise a Jackson Pollock canvas of independent foodservice outlets strewn across a map of northeastern Oklahoma and the edges of the adjoining states of Missouri and Arkansas.
Fadler is an old company with a new outlook on its mission. Founded in 1913, Fadler began operation as a horse-and-buggy produce house and grew to have multiple warehouses with distribution from cities in Kansas and Missouri as well as from Tulsa. By 1976, the company had evolved into a broadline foodservice distributor operating from a single location. Produce remained an important part of the business with growth coming from the addition of meat, frozen foods, groceries, and restaurant supplies. Meat, frozen foods, frozen seafood, other perishables now account for 60% or more of total sales.
More and more of the produce Fadler sells is processed and packaged for immediate use. This change is fueled by the cost and short supply of restaurant labor for vegetable preparation as well as increased concerns about food safety from on-site preparation, says Joe Hoffman, Fadler president. The concern about preparation costs extends to Fadler, which purchases processed produce from a vendor rather than shoulder that burden internally.
The big difference between Fadler and its competitors when it comes to produce is flexibility. “We know that many of our customers are small operations that don't need to purchase large quantities and don't have the storage capacity to keep a lot of produce, even if they were willing to buy it,” says Rick Maxwell, operations manager. “We still sell top-of-the-line and are willing to sell it by the piece if that is what the customer wants. If a customer orders six tomatoes instead of a whole carton, that's what the customer gets. If we don't carry a particular item in regular inventory, we are perfectly willing to special order it from our suppliers as long as we are given a little advance notice. Exotic produce, gourmet cheese, or a special prepared dessert are good examples of the things we might custom order.”
The scope of the business is still much as it has been for the past 25 years. Distribution is concentrated in northeast Oklahoma on the east side of Interstate 35 that runs from Oklahoma City north through Wichita, Kansas. Although Fadler is the only full line foodservice distributor based in Tulsa, the majority of its business is spread throughout the rural communities of its trade area. “We've always been stronger in the country than in the city,” says Hoffman. “We serve Tulsa, and we go to Oklahoma City every day, but as much as 70% of our business goes to small towns. That's odd in a way, because all of our big competitors are based in Oklahoma City and have to drive 100 miles to reach customers in our backyard.”
The reason for concentration on rural customers lies deep in the company history, Hoffman says. As a produce distributor, Fadler maintained outlying distribution points to reach its rural customers with fresh product. When distribution was consolidated in Tulsa, the customer base remained rural. In addition, the company operated on the premise that profit margins for delivery to small towns were higher, he says.
That premise still holds to a great degree, because Fadler concentrates its efforts on independent restaurants and other foodservice outlets such as small town convenience stores rather than chains of restaurants with their more structured buying procedures. Fadler has a wide mix of customers with restaurants, schools, and healthcare facilities accounting for the bulk of sales. The healthcare sector breaks down into three sub-groups: hospitals, nursing homes, and retirement communities. Other customer groups include colleges and universities, which are considered different from public schools, and caterers who contract for meals and entertainment at various venues in Tulsa. When schools recess for the summer, Fadler makes up for a great deal of the lost sales with delivery to the summer camps in rural Oklahoma. “For instance, we've seen our business with Boy Scout camps grow by more than 30% in the past few years,” Hoffman says.
Business with the rural restaurants remains fairly stable year round. Most of these customers could be characterized as casual dining establishments. “A lot of them are barbeque houses,” Hoffman says. “More importantly, they are the local meeting spot, the place where the same diners go for coffee every morning and for lunch every day. Restaurant managers can count on the same group of customers every day, so we can rely on a steady stream of orders every week.”
Rural customers rely on Fadler to supply as many of their needs at a single stop as possible. For instance, many restaurants and schools purchase fluid milk from Fadler, which in turn purchases the milk from Hiland Dairy in Tulsa. Milk distribution is not a consignment operation. Customers benefit by limiting the number of vendors at their back door, Fadler benefits by increasing its volume of sales, and the dairy benefits from sales that require little delivery effort.
Fifteen daily routes
Fadler dispatches 14 to 15 routes daily with only four dedicated to Tulsa and the surrounding suburban communities. Most of the rural customers are scheduled for one delivery weekly — two stops a week if it is a high-volume customer. Order cutoff is 4:30 pm for delivery the following morning with the longest routes departing at 3 am and continuing until the last trucks hit the street around 6 am. The order selection crew reports for work at 8 pm. Each truck is assigned to one of the 16 doors on the warehouse. Product is loaded as it is picked. The 14 members of the selection crew can pick orders and load 14 trucks in eight hours.
Delivery frequency allows for plenty of flexibility. “We can take care of every customer every time,” Maxwell says. “If a customer needs something on a day other than the regular schedule, we can get it there, but the special order customers needs to work with us a little, because the regular customers scheduled for that day come first. We deliver to the scheduled customers as the first priority and then work the special orders into the route as required.”
Routes are scheduled using the repetitive routing capability of Roadnet from UPS Logistics. “Dynamic routing, which Roadnet does well, is not easy to do with rural routes,” Maxwell says. “However, we make great use of the software system to make sure we assign the right truck to each route. Drivers are assigned to routes permanently, but may drive different trucks from day to day depending on the load or the need to balance mileage within the fleet. The goal is to get the most cube possible in a truck while sending the same driver to see the same group of customers every time.”
Drivers assigned to territories
Assigning drivers to territories maintains continuity for customers. Fadler drivers know what their customers want and work hard to keep them happy. “Most customers have about three different spots in the restaurant where they keep product,” says Chris Hockett, transportation supervisor. “Our drivers know where things go and are willing to help stock the kitchen shelves. They will actually go farther than that. At times, our trucks are already on the road before some of the rural school districts declare a day off because of snow. When that happens, our drivers often pick up the school kitchen manager at home and give them a ride to the closed school to make the delivery. It provides a safer trip to school for the manager who will need the product in the delivery when school opens again the next day.”
Fadler keeps the rural routes under constant review with a goal of increasing route density. It is the responsibility of all 19 sales representatives to build sales volume in their territories, Maxwell says. “Operations makes sure that orders get delivered; it's up to sales to help make sure that trucks are filled to capacity for each route,” he says.
Drivers on the rural routes make 14 to 16 stops a day, and all but two are home every night. Fadler has two overnight runs — one to Springfield, Missouri, and one to Hugo, Oklahoma. Hugo is about 200 miles due south of Tulsa, just on the north side of the Red River opposite Paris, Texas. Average payload for Fadler's one-day routes is 8,000 lb; the two long routes almost double that to 14,000 to 18,000 lb per load. On the long routes, drivers deliver all along the way to the farthest point on the route, go to bed for the night, and then make more deliveries on the way back to Tulsa.
Most rural routes are served by a fleet of 36-ft, tandem axle trailers with single drive tractors. The fleet of 11 trailers is equipped with multi-temp refrigeration to ensure that frozen foods are maintained between -10° F and -5° F. The second compartment must be kept at 34° F at a maximum to ensure optimum shelf life for the fluid milk.
Increased city sales
Two of Fadler's six straight trucks are used in the country. The other four are reserved for use in Tulsa. In fact, three brand new straight trucks have been acquired specifically to assist in a mission that calls for increased city sales. The company has thought for years that its best growth potential could be within the city limits, Hoffman says. “If we can build our city business, we can increase sales at a lower delivered cost,” he says. “Our goal is to capture additional market share in the city. We know that we can't get a lot of business from the chain restaurants, but we can offer independent restaurants the same or better service that seems to be so valuable to our rural customers.”
To achieve that goal, Fadler has added four sales people and changed the territories of some others with the result that five sales personnel concentrate specifically on business in Tulsa. The company is offering high levels of service to attract new city customers. For instance, one objective is to have all city delivery completed by 11 am. Another is to provide service six days a week to customers within 20 miles of the distribution center.
Proposed multiple deliveries
For close-in customers, Fadler already offers special delivery, hotshot dispatches at 8 and 10 am and at 1 pm. In a recently announced promotion for potential customers along Tulsa's compact restaurant row, local customers can order by 9 am for delivery before lunch and order again by 2 pm and receive the delivery before dinner. “This is not a long-term project,” Hoffman says. “It's something that we think can show immediate results.”
Fadler uses a mix of methods for acquiring and maintaining its fleet. The company owns five of the 11 trailers. Power equipment is held on lease from either Ryder or Penske Truck Leasing. The three new straight trucks are from Penske.
Built specifically for city delivery, the 22-ft truck bodies will hold 10 pallets in three separate compartments. Cooling is provided by Carrier Transicold Genesis R90 multi-temp refrigeration units with a single-discharge evaporator mounted on the ceiling at the nose of the body and with a dual-discharge evaporator just inside the rear doors on the streetside ceiling. The single-discharge evaporator expels air from a single opening much as the evaporator of any conventional nose-mounted refrigeration would do. The dual-discharge evaporator takes in air in the middle of the housing and expels cold air both fore and aft. The Genesis R90 nosemount does not have an evaporator that extends through the truck body front wall; both discharge units mount remotely from the host unit. Because the dual-discharge evaporator is so close to the rear door, it is enclosed in a heavy guard to protect it from damage during vehicle loading. The guard is produced by JBH Inc of Arcola, Illinois.
Easy cargo access
The three Morgan truck bodies are built with four inches of insulation in the sidewalls, nose, floor, and ceiling. Access to the cargo compartment is provided by a curbside door mounted immediately behind the front corner post. A folding stair from Bustin Industrial Products slides out of a compartment under the door to provide drivers with a safer way into the body than is afforded by simple vertical steps. The bodies are equipped with Morgan's heavy-duty forklift floor reinforcement package, because the trucks are expected to be loaded more than once a day six days a week. The rear doors are built with three panels, allowing an opening in the middle, just above the 14-ft unloading ramp, a two-thirds, or a full width rear entry. The ramp is provided by Morgan Corporation.
Fadler divides the cargo compartment into three sections with SB2 Skinny Bun bulkheads from ITW Insulated Products. The nose compartment for frozen foods is projected to hold from two to four pallets, giving that compartment a length of four to eight ft. Aft of the bulkhead that sits across the body to form the front compartment, Fadler uses additional Skinny Bun bulkheads to divide the body down the center, providing a medium temperature compartment along the streetside and an unrefrigerated space for dry groceries and restaurant supplies along the curbside. To make sure that drivers can see product as they unload, the truck bodies have 10 lamps installed in the ceiling.
The bodies mount on Freightliner Business Class M2 trucks powered by C7 Caterpillar diesel engines rated at 190 horsepower. Although intended primarily for city delivery, trucks are equipped with Eaton FS-5406A six-speed, synchromesh transmissions. Fadler registers the trucks for 33,000 lb GCW based on using an ArvinMeritor 12,000 steering axle and a RS-21-145 drive axle from ArvinMeritor rated at 21,000 lb. Empty weight of the straight trucks is 19,000 lb.
Truck specifications are a combination of features desired by Fadler and those favored by Penske to make the trucks more desirable to second users at the end of the lease term. Both Fadler and Penske agreed that air suspension for the drive axle is a necessity.
Trucks are leased for a term of seven years. One good indication that they are designed for city delivery is the mileage component of the lease agreement. The lease limits the new trucks to a maximum of 25,000 miles a year. For contrast, trucks on the rural routes run an average of 60,000 miles a year.
Fadler has no plans to remount the bodies on new chassis at the end of the seven-year lease, Hockett says. “We have no reason to keep the bodies longer than seven years, because we think that insulation and refrigeration technology will have changed noticeably by the end of the lease,” he says.
The whole purpose of the new trucks is to add sales and improve distribution efficiency. Tulsa sits in the middle of Fadler's trade area, so it makes a lot of sense to try to concentrate a greater number of the dots that represent delivery stops in the middle of the circle. “We want to fill up the trade area,” Hoffman says.