Focus on: Automated Supply Chain Solutions
Don’t let the nursery-rhyme-sounding name fool you: The Piggly Wiggly Co. is serious about bringing home the bacon in grocery sales.
An affiliate of C&S Wholesale Groceries, which is the second-largest food wholesaler and distributor in the United States and ranked No. 12 on the Forbes list of privately held companies, Piggly Wiggly supports more than 600 stores in 17 states. Both Piggly Wiggly and C&S are based in Keene, N.H., but the majority of Piggly Wiggly stores are located in the Southeastern region.
Today, all of the stores are independently owned and operated, with the Piggly Wiggly Carolina Co. comprising one of the largest franchises in the group.
Based in Charleston, S.C., Piggly Wiggly Carolina has 105 stores located in its home state and neighboring Georgia. The company is the largest privately operated, employee-owned retailer in the Palmetto State. Despite that impressive statistic and annual sales topping $800 million, Piggly Wiggly Carolina has faced daunting competition from national chains as well as dominant regional players such as Publix Supermarkets.
Like all food retailers, one of the biggest challenges has been optimizing cost efficiencies to offset shrinking profit margins. A clear opportunity for improvement was identified in the transportation area, where Piggly Wiggly Carolina had historically plotted delivery routes through a labor-intensive, manual process.
The company serves its stores from two distribution centers located in Charleston and Jedburg, S.C. Piggly Wiggly Carolina’s private fleet of more than 60 trucks makes multiple deliveries of frozen, refrigerated and dry goods to each store every week.
“The workload was enormous,” reported Woody Arsenault, director of distribution centers, Piggly Wiggly Carolina, Charleston, S.C. “The need to build and update our routes manually each day required several hours, and it also meant our routes were often not organized as efficiently as possible. This was not a fault of our personnel, but a fundamental obstacle of such an intricate system. It simply took far too long for our team to manage it manually.”
After evaluating several automated load-planning systems, Piggly Wiggly Carolina opted in March 2009 to begin using an online solution, SaaS (software as a service), to plan its transportation routes.
The retailer chose software from Bloomfield, Conn.-based Prophesy Transportation Solutions largely because the technology provider had conducted a number of “what-if” analyses using actual load data from Piggly Wiggly Carolina.
The “what-if” scenarios demonstrated a projected savings of 3,000 miles per week, roughly equal to a 10% reduction in overall transportation costs. In addition to automating the outbound load planning for store deliveries, the system also could be used to optimize backhaul miles so that returning trucks could pick up inbound shipments from vendor warehouses.
Based on the efficiencies identified through those preliminary tests, Piggly Wiggly Carolina realized the SaaS could pay for itself within three months. Additionally, utilizing the SaaS option, rather than implementing the on-premise version of the software, allowed the retailer to take advantage of the technology’s robust platform while keeping the initial investment as low as possible.
Implementation was fast and seamless, according to Arsenault, who noted it only took two days, and the training was very “straightforward.” The solution integrated with the retailer’s existing warehouse management system and automatically imported orders and data based on the specific business rules established by Piggly Wiggly Carolina.
“Until now, all our delivery stops were statically organized and could not be changed without difficulty,” Arsenault concluded. “Now every route is fully dynamic and can be updated on the fly. If a stop needs to be added or removed, the software automatically resequences the route as needed. What used to take two people several hours to do can now be done by one person in a matter of minutes.”
In addition to building optimized transportation schedules, the software also generates detailed driving directions that are provided to the drivers so they can clearly take the most efficient route between stops.