Ryder Dedicated Services – All Shades
Orlando, Florida USA Site Visit
September 21, 2017
By
Richard Armstrong
Participants:
Ryan Martin, Director of Customer Logistics
Jimmy Meadows, Director of Business Development
John DeAngelo, Vice President of Business Development
Michael Woods, Director of Distribution
Ryder provides dedicated services to a major paint manufacturer throughout the United States and Canada. The partnership began more than 40 years ago when Ryder began providing equipment and maintenance services to the paint manufacturer’s locations throughout the United States. The partnership expanded in 2015 when Ryder launched dedicated services for a new distribution center located in the Northeast. Through the longstanding partnership, Ryder now provides Dedicated Transportation Solutions including 61 tractors, 61 trailers, and 61 drivers to 10 of the manufacturer’s locations in the United States and Canada. One of these facilities is a 78,000 square foot warehouse in Orlando, Florida.
The operation in Orlando is a high-quality partnership between Ryder and the paint manufacturer. It was established seven years ago when the paint manufacturer restructured. Ryder uses its TranSync software to optimize the daily network between for-hire carriers and its dedicated fleet. The fleet operates throughout Florida with 95% of deliveries being same day. Ryder tractors all have electronic logging and safe driver cameras.
The TranSync tool was developed to replace the normal private fleet management system based on spreadsheets. TranSync analyzes the best combination of modes at the lowest network cost, in real time, load by load, every day. Available drivers, fixed fleet costs and backhauls are part of the calculations. A user needs $10 million or more in cost per year to get the best use of TranSync.
Ryder also implemented its new neutral integration platform, RyderShare, to improve visibility, tracking, and business intelligence for the paint
manufacturer’s deliveries.
The paint manufacturer has ~1,900 employees with seasonal variations covered by temporary workers. Order sizes vary daily from less-than-truckload (LTL) to truckload (TL). The average order is 10 lines and 50 gallons. The warehouse is managed using Manhattan’s WMS (warehouse management system). The warehouse has 32′ clearances.
The paint manufacturer emphasizes five areas for key performance indicators (KPIs): Safety, Quality, Delivery, Cost and Team. Quality is built around Errors per 1,000 Orders, Inventory Accuracy, and Scores for the team as a group. Delivery uses Fulfillment Rate, On-time Delivery for the paint manufacturer’s fleet and common carriers, and On-time Dispatch. Cost is measured in Gallons per Man Hour, DC Cost per Gallon Shipped, Transport Cost per Gallon Shipped, and Overtime.
The goal is to have costs of 65 cents for warehousing and 66 cents for transport. The reality is warehousing costs slightly less than targeted and transport costs that are running 10 cents or more higher.
Productivity is measured for each employee by # of Units and Hours. Categories are Active Picking (Pieces) and Put Away (Pallets). The standards are 300 Units per Hour for Active Picking and 25 Pallets per Hour for Put Away. Warehouse employees are paid $14-18 per hour plus incentive bonuses.
In addition to regular orders, the paint manufacturer has special orders where it tints paint in all shades and ships it to special customers (usually contractors in a hurry). Special orders are ~2% of total volume.
Sixteen electric tow motors and other devices are used in the warehouse. There are 1,600 SKUs (stock keeping units) and ~4 million gallons of paint shipped from Orlando each year. There are five manufacturing locations:
- Newark, NJ
- Youngstown, NY
- Pell City, AL
- Milford, MA
- Mesquite, TX
These locations have much higher volume handled by Ryder.
Since beginning its relationship with Ryder, the paint manufacturer has achieved results that surpass its goals in safety, quality, and delivery while achieving an industry best on-time delivery rate of 99.4 percent.
Sources: A&A Primary Research, http://www.ryder.com/