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Eye On Technology: More Communication, Less Cost

Last year PGT Industries, Florida's largest maker of custom-built doors, windows and patio rooms, began offering a true "order one, build one, deliver one" supply chain to its customers. The firm stands out from the crowd because it delivers its p...

Last year PGT Industries, Florida’s largest maker of custom-built doors, windows and patio rooms, began offering a true “order one, build one, deliver one” supply chain to its customers. The firm stands out from the crowd because it delivers its products using its own in-house fleet directly to remote construction sites within specified 30-minute delivery windows.

In simple terms, its competitive advantage is its supply chain. Contractors and renovators make money by installing PGT products not by waiting around for them to arrive. Keeping its customers satisfied has super charged its growth. PGT’s forecasted 2003 revenues increased 31% to U.S.$210 million over 2002 totals of U.S.$160 million.

A privately held company founded in 1980, PGT Industries currently employs more than 1,650 people at a 425,000 sq.-ft. corporate headquarters, manufacturing and delivery fleet facility in Venice, FL and a 225,000 sq.-ft. plant in Lexington, NC.

Technology makes it all happen and it includes two supply chain management software applications from Waterloo-based Descartes Systems – Roadshow Route Planner and MobileLink: Gateway solution, a wireless communications tool connected by Nextel’s all digital wireless network to its i58sr GPS, direct-connect handsets. Their seamless connectivity ensures constant links between drivers on the road and central dispatch. Moreover, the supporting software can dynamically reschedule routes and delivery times based on real-time information to minimize customer inconvenience and maximize asset utilization.

The interlinked technologies deliver bankable savings. During a four-month trial, PGT reduced delivery costs for out-of-state routes lasting two to three days by 5% and “dead miles” by 30%. Overall it lowered distribution costs to 3% of annual sales, far below the industry average of 5.5%. Each day PGT makes about 900 deliveries totaling close to four million miles annually.

“The routing tool enables us to save time and miles by offering us the shortest and best routes using major roads,” says Alan Greene, Nokomis FL-based transportation director for PGT Industries, “so we can achieve our promise of plus or minus 30 minutes of our ETA. Once drivers are finished for the day, we can immediately start talking to local brokers or other shippers about back-haul opportunities. Last year, we earned about $500,000 that way. We carry any kind of dry cargo except hazardous materials or alcohol. In fact, we bring back loads of hay from Nebraska.”

Once orders are accepted, Roadshow kicks in and begins scheduling delivery dates – 10 days for patio rooms, seven days for windows. Everything else such as build, staging and loading dates are then aligned with the ship date. Eventually, the system allocates each shipment to a specific truck and dispatch assigns a driver. Florida deliveries – 85% of PGT’s business – require a rider or assistant. Out-of-state deliveries are scheduled once a week. There is also a scheduled weekly 48-footer for Ontario. Overall, about 97% of PGT’s deliveries are made in its 70-truck in-house fleet.

After they’ve finished their deliveries, drivers call in for their next-day delivery schedule, which pops up on their cell-phone screens as both a data streamed text message and a map. MobileLink then provides the wireless transmission of real-time load status and truck location information from the driver’s Nextel handset. In this way, head-office dispatchers can track each truck’s progress on a color-coded screen.

Roadshow’s dynamic scheduling power enables PGT to maintain customer satisfaction levels by resequencing deliveries and recalculating ETAs on the fly.

The Nextel handset is both a conventional cell-phone and a direct-connection, walkie-talkie using the iDEN wireless messaging protocol. (In Canada, iDEN is offered through Telus.) Descartes looks after hosting the communications function – connecting directly with Nextel – which PGT does not consider a core strategic function.

Data is streamed to drivers in the form of text messages that can be manipulated through GUI interfaces. As drivers finish each activity, they check off completed tasks by simply pushing a handset button that automatically updates the status screen at head office. Contractors also benefit from the technology since they can note errors or shortages at the time of delivery thus speeding up any necessary replacements.

To ensure drivers quickly became comfortable with the new system, PGT gave team leaders – those who were highly respected by their peers – three months of intensive training. Gradually, everyone climbed on board.

“Most of them were already familiar with the push-to-talk, walkie-talkie handsets. It was dead easy – rather than keying in data, they were simply pushing buttons. Still, we did not lean too hard on them because drivers are used to being on their own and they don’t want anyone constantly looking over their shoulder. In fact, we don’t even activate the GPS function – we did not want to give them the impression that ‘big brother’ was watching over them.”

Finally, improved productivity puts more money in their pockets. “Front-line employees participate in gain-sharing that distributes awards quarterly,” says Greene. “Drivers are aware of how it is calculated. Recently, it has averaged about $4,000 per year per employee.”

PGT is not about to rest on its laurels. It is already planning to introduce a plug in bar-code scanner to enable drivers to scan individual items off the truck to provide real-time, inventory control. According to Mike Rush, Descartes’ Atlanta-GA-based director of mobile resource management, such scanning capability exists today. “What’s needed,” says Rush “is for PGT to create separate “license plates” or bar codes for each product.” In addition, PGT is also eyeing a proposed plug-in credit card reader that will simplify payment-on-delivery for COD customers.

At PGT, technology has enhanced the value of transportation such that outsourcing delivery is not an option. “Our business and marketing model is based on delivering products in our own vehicles using drivers who have developed close relationships with our buyers,” says Greene. “It forms a large part of our competitive advantage.”

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