At small home heating oil companies, the owner often fills a multitude of job functions, including truck driver during the busiest times of the year. Vehicle routing and scheduling often take a backseat to other activities.
Many of these small heating oil distributors simply pass off the routing function to the drivers. However, some companies struggle to maintain a more systematic approach. A good example is Ruggieri and Sons in Philadelphia, Pennsylvania.
"We believe it's important to organize routes centrally because we gain a better idea of where the trucks are during the day," says Joe Ruggieri, co-owner of Ruggieri and Sons Inc. "We achieve better equipment utilization, and we get to customers before a crisis develops."
That concern for customers is one reason the company has successfully stayed in business for over 80 years and has been passed down to the third generation-Joe and his brother, Bob. Ruggieri and Sons started delivering coal and branched out into fuel oil in the mid 1930s. The fleet has grown to eight tankwagons and one transport.
"This is still a small family business, and my brother and I do just about everything," Joe says. "I've always been the one in charge of dispatching. In the past, I would get busy with other duties, and dispatching and route assembly would go into the background."
Things reached a crisis level in January 1996 when Philadelphia was buried under 30 plus inches of snow. Orders for heating oil flooded into the business office, and the company's six tankwagons were on the road virtually around the clock. Everyone who could drive a truck did, and this included Joe and Bob.
"We got over 2,000 customer calls in two months," Joe says. "It was too much to keep track of using a manual system. Worse, after driving a delivery truck all day, I had to spend a couple more hours at night building the routes. Sometimes, I didn't get done until about 2 am.
"Bob and I agreed that we needed a better system with more flexibility. We saw that other companies with distribution operations were using routing software. We went looking for something that would fit our business."
It's important to note that Ruggieri and Sons may be a small heating marketer, but computers have been an important tool in the management side of the business for many years. The company has had a contract with Advanced Digital Data Inc (ADD), Flanders, New Jersey, for about 14 years.
ADD is an on-line service that handles degree-day calculations and various bookkeeping functions, including payroll. "We have benefited greatly by outsourcing those computer functions," Joe says. "ADD handles upgrades and such."
Dispatch Software The Ruggieris turned to ADD for assistance when they began looking for a dispatch and routing program that would meet the needs of a fuel oil marketer. It wasn't long before a product developed by The Lightstone Group, Mineola, New York, caught their attention.
The Lightstone Group had developed a program called RIMMS, which stands for Resources in Motion Management System. RIMMS is designed to optimize delivery routes and schedules and has dynamic dispatch, on-screen editing, and digital mapping capabilities.
The software can be used on Pentium-class PCs running Microsoft Windows 95 or Windows NT. The computer needs a CD-ROM drive, at least one gigabyte of hard disk storage, and 32 megabytes of RAM.
The RIMMS software enables users to create customized business programs that address an individual operation's day-to-day requirements by entering and loading distinctive business system parameters. These can include industry-specific business terminology, preferred geographical assignments, specific vehicle characteristics like size or weight, and individual skill requirements and capabilities. From this initial input or download, RIMMS assigns tasks to be completed and/or stops to be made to the available resources.
Screen Views RIMMS users can simultaneously view on a single screen a variety of logistical business data, such as spatial representations of geo-coded regions, route schedules, driver availability, and addresses. The software will generate a variety of reports, ranging from driving instructions for each delivery to spread-sheet-style cost analysis of route schedules.
An important benefit for fuel oil distributors is the ability of RIMMS to make immediate route adjustments in response to changing weather conditions. For instance, a blizzard overnight can bring difficult driving conditions that call for route and schedule changes.
The dynamic dispatch function in the software enables managers to make on-screen edits and build new routes and schedules to accommodate those customers most in need of a delivery.
"RIMMS is an impressive product," Joe says. "It wasn't specifically designed for heating oil distribution, but Lightstone was more than willing to adapt the software to our needs.
"We started using the system last winter, and it has worked well for us. It's not inexpensive (prices start around $3,000), but it has enabled us to reduce mileage by five to seven percent per stop. We've also increased stops per hour. We're still learning how to use the system, and we probably will achieve further efficiencies this winter."
Faster Routing RIMMS has significantly cut the amount of time Joe spends on routing and scheduling duties. In the past, it would take at least 15 minutes to schedule 40 stops. RIMMS can do the task in two minutes.
The computer program also simplifies long-term planning. "We try to maximize our delivery efficiency by looking at routes 12 days out," Joe says. "We can strategize on routing. We look for arrangements that give us the greatest number of stops with maximum gallons delivered. We don't want to travel farther than necessary."
The software calculates the estimated hours that it will take to complete a route, the number of gallons that should be delivered, and the miles driven. The analysis will note a wide range of problems, including deliveries that don't fit an assigned route. Points are assigned to a number of factors.
"The objective is to keep the total points as low as possible," Joe says. "For instance, we set a limit of 10 hours to complete a shift. Exceptions are highlighted in red. We're able to make manual adjustments, and we can override the exceptions."
Routes are drawn in blue on a Philadelphia street map. City streets and state highways are in black on the map, and interstate highways are in red. Route instructions can be printed from the computer.
RIMMS does have a few shortcomings. For instance, the software doesn't always note which streets are limited to automobile traffic. Bridge weights are not accounted for. Customer Base
Still, RIMMS makes it much easier to keep up with the fuel oil distributor's 2,500 to 3,000 customers. Probably 60% of those customers are on automatic delivery, but the other 40% make routing a challenge.
"We're always going to have will-call customers, and they are the tail that wags the dog," Bob says. "During the busy winter season, our fleet handles 140 to 150 stops a day. We can do upwards of 1,000 deliveries a week.
"Our customer base has been relatively steady for the past few years. We're not finding a lot of opportunities to install oil heat in newly built homes, but we are holding on to our existing base. We're installing new boilers and high-efficiency burners.
"Petroleum prices have been steady for much of the time and now are actually lower than in the late 1970s. Heating oil prices in the Philadephia area are 15% to 20% below natural gas right now."
On average, the company delivers 3.5 to four million gallons of heating oil a year, mostly to residential customers. Ruggieri is a branded distributor for Coastal Corporation and has been for the past five years.
"Coastal has a good branded program with an excellent range of perks and allowances," Bob says. "Coastal's NEXT additive package makes burners run cleaner and ensures more efficient combustion."
Bulk Plant The eight tankwagons in the fleet operate out of Ruggieri's bulk plant that has 75,000 gallons of underground storage capacity. The storage consists of three fiberglass-coated steel tanks with Impress cathodic protection. Catch basins and overfill sensing are being added.
"We've done a lot to upgrade our storage system," Bob says. "We'll be fully compliant with the federal underground storage tank rules by December. We chose the Veeder-Root Simplicity System because we like the central monitoring capability. The monthly EPA (Environmental Protection Agency) reports generated by the system will be submitted electronically via modem."
Tankwagons return to the bulk plant several times during a shift, and drivers handle the loading duties. Ruggieri employs four to six drivers during the winter and just one during the rest of the year.
Keeping drivers during the busy winter season has become more of a challenge. The commercial driver license and the various required endorsements pose the biggest roadblocks, according to Joe and Bob.
Tank Trucks The trucks to which drivers are assigned have cargo tanks ranging in capacity from 2,100 to 5,000 gallons. All of the tanks are aluminum, and most were supplied by Allied Tank in Norristown, Pennsylvania.
Built to code, the Allied tanks have reinforced bulkheads. Hardware includes Blackmer pumps, Emco Wheaton bottom loading adapters, Allegheny butterfly valves, Liquid Controls meters, Smith meters, and Scully nozzles.
The tanks last indefinitely, going through a number of truck chassis before replacement. Ruggieri operates a variety of truck models, including Mack, Peterbilt, and WhiteGMC. Cabovers are preferred for their maneuverability in city traffic.
One of the newest trucks in the fleet is a Mack Mid-Liner MS-300P that is used in sections of Philadelphia where the streets are very narrow. Mounted on the truck is a 2,100-gallon Allied aluminum tank.
While the trucks are kept busy during the winter, they don't accumulate a lot of miles. The eight trucks in the fleet ran a total of 27,000 miles in 1997. However, engine hours are high due to pump use during deliveries.
With the RIMMS system in place, the total mileage may be even less in coming years. Productivity will be higher, though.