Appointment Scheduling - Achieving the Positive Ripple Effect Part 1

Appointment Scheduling Achieving the Positive Ripple Effect
Featured Author - Rachel Nemecek - June 27, 2002

Introduction

At some point in time, almost everyone has experienced the following situation You arrive on time for a scheduled appointment only to find that you will be delayed for an indeterminate length of time, generally without reason. The longer you wait, the more you realize that the rest of your day will be behind schedule but you see no apparent recourse other than frustration.

Such is the situation encountered on the job everyday by freight carriers when confronted with delays caused by inefficient appointment scheduling. The Washington Post says it best, "Miserable hours, low pay, lonely existence. Why would anyone want to make a living this way?"¹ Frustratingly long waits at docks result in a shrinking supply of assets, often leading to increased rates for shippers. Because carriers are paid only when their wheels are turning, wait time at the dock has a serious impact on earning power. In turn, this causes increased dissatisfaction and results in higher turnover.

The appointment scheduling process is no less frustrating for shippers than receivers as both are forced to juggle numerous demands from multiple parties, generally with out-dated or incomplete information. In addition, the increasing reliance on just-in-time logistics practices have put even more stress on dock operations; thus, magnifying the effect of late arrivals and loading/unloading delays.

Inefficient performance of shipping and receiving activities affects more than just the schedules as it negatively impacts many parties in the supply chain, from the purchaser of the product to the end customer. For this reason, the importance of effective appointment scheduling practices cannot be underestimated. Addressing and alleviating problems with scheduling will gain notable efficiency in visibility, resource and capacity utilization, compliance, and product flow. Accurate appointment scheduling can provide a great benefit to all parties in the supply chain, forming a positive ripple effect that equates to a competitive advantage.

This is Part One of a three-part article. Part Two will discuss achieving a solution and the resultant benefits. Part Three will be a case study illustration.

1. Wells Tower, "The Long Haul", The Washington Post, August 2001

Problems With Current Appoinment Scheduling

There are numerous problems resulting from the methods currently in use for appointment scheduling. The most notable is that the majority of all scheduling is a highly manual and labor-intensive process. Of the dozen Fortune 500 retailers and grocers interviewed on this subject, only one has any automation built into their system. The remaining continue to use paper, phone and fax. Shippers and consignees spend upward of 40% of their time² on the phone with carriers or vendors, trying to meet their requests for appointment times while still complying with the needs of purchasing. Carriers are forced to either spend hours on hold to make appointments or to leave messages for future callbacks. In addition, appointments may only be scheduled during set business hours. Consequently, when problems arise during off hours the receiver cannot be notified, resulting in out-of-date information in receiving, and often leading to schedule disruptions and mismatched resources-to-volume in the warehouse.

The process of rescheduling appointments is also a significant drain on resources. One large grocery retailer estimates that approximately 20% of the appointments made every week have to be rescheduled, creating approximately 950 total reschedules for an average week. Bob Johnson, Inbound Logistics Manager for Harris Teeter grocery stores, cites rescheduling as the largest problem in scheduling today. In an attempt to offset costs, Harris Teeter has instituted a policy of charge backs for any appointment that is rescheduled more than twice. Currently, between $7,000-$12,000 is collected each month in rescheduling fines. These figures clearly illustrate the depth of the problem. Because carriers and vendors do not personally have access to the schedules, they must rely on contacting the scheduler each time that the situation changes.

Problems with appointment scheduling result in delays at the dock; delays that carry a price tag for shippers, receivers and carriers. A study conducted by Mercer Management Consulting estimates that there is a large cost to shippers for unloading delays at receivers, up to 8% of the total transportation budget.³ For carriers, the excessive wait time contributes to lost revenue, driver dissatisfaction and turnover. The results of the National Refrigerated Drivers Survey, performed by the Truckload Carriers Association, lists the average wait time to load as 3.39 hours per stop and wait time to unload as 3.20 hours per stop.⁴ A similar survey of dry van drivers found the average wait time for a driver in a particular week to be 33.5 hours, adding up to a $1.5 billion loss per year for carriers.⁵ Wait time causes a reduction in the earning power of drivers which increases turnover. Driver turnover can range from 50% to 80% for motor carriers per year, with the cost of replacing a single driver estimated as high as $10,000.⁶

1. "Martin Labbe Associates Study for Truckload Carrier Association", Overdriveonline, August 1999

2. Mercer Management Consulting, "Just in Time to Wait": An Examination of Best Practices for Streamlining Loading/Unloading Functions, July 2000

3. Truckload Carrier Association, National Refrigerated Drivers Survey, 1998

4. Truckload Carrier Association, Dry Van Drivers Survey, June 1999

5. Alan Robinson, "Fleet Management Handbook", Food Logistics, July-August 1999

Far Reaching Effects

Inefficiencies resulting from the current manual appointment scheduling practices affect not only the scheduling department, but extend farther to other parts of the supply chain; Shipping, Receiving, Distribution, Purchasing, and finally to the end customer. Generally, product is ordered with respect to a particular delivery date so that acceptable inventory levels and/or a fluid production schedule can be maintained. The shipping schedule of the supplier must be set in advance of this required date in order to deliver on time and keep inventory on track. However, due to frequent delays at the pickup point, delivery appointments often cannot be made until after the pickup has been physically performed. By the time the driver contacts the receiver, they might not be able to match the delivery appointment with the transit time. Consequently, any delay in the shipping schedule may translate to a delay of delivery and a shortage of inventory, resulting in an unavailability of product for the end customer.

It becomes evident that a problem in one area of the process easily and quickly fingers out to affect countless others in the process. Inaccuracy and inefficiency in the communication of scheduling requirements of the buyers, sellers, shippers, and receivers result in the requirements of the end customer not being met.

Inaccurate appointment schedules may also cause chaos in the warehouse. Arrivals occurring out of sequence cause major congestion when too many pieces/pallets arrive at the same time, producing a back up in the receiving lanes and marshalling areas. This congestion results in carriers who arrived on time for their appointments being delayed.⁷ The delays to a carrier at one warehouse affect their ability to arrive at subsequent appointments on time, extending the problem to other companies down the line. "The warehouses are most affected if we have problems," says Kim Apodaca of the Ralph's grocery chain. "If our scheduling system goes down and we can't produce schedules, there is chaos. The receiving mode becomes, First Come-First Served'. Marketing begins to receive complaints and phone calls from panicky vendors. Some truck drivers or vendors refuse to even move the loads without acquiring a delivery appointment first."

7. Michael Docherty, "Scheduling Receiving", Managing Logistics, Winter 1997

Possible Improvements

It is evident that scheduling practices must be addressed and improved in order to minimize wait time, improve communication and ensure more on-time delivery of goods. Allowing access to information by all parties involved, expanding hours during which appointments can be made and limiting the amount of manual contact between handoffs are three points that would drastically improve scheduling practices.

Access to Information

Of all companies interviewed, approximately 85% feel that communication between carriers, vendors and receivers is the area most in need for improvement in scheduling. Often, appointments are made by a broker or a vendor and never communicated to the carrier, leaving the carrier with no knowledge of expected arrival time. Another prevalent problem is that the amount of product expected by the receiver frequently does not equate to the amount of product being shipped by the vendor. Only if the receiver has access to the shipping information of the vendor can an accurate volume estimate be made. Carriers and vendors need adequate information about the scheduling requirements and business rules of the receiver in order to schedule appointments on their own, without relying on calling the scheduler each time to confirm an appointment. Enabling access to the same information by all parties in real-time allows for the creation of an accurate scheduling plan.

24/7 Scheduling

The limited hours during which appointments can be made present another barrier in the way of a productive scheduling plan. Unfortunately, delays such as weather, traffic congestion and mechanical failure do not always occur during normal business hours. Consequently, there is often a significant time lag between the data given to the warehouse for resource planning and the actual state of the schedule. Resources allocated based on a project plan for the next business day may have been done so as determined by information available at close of business the day prior. In other words, the actual deliveries made the next morning may vary widely due to events that occurred after the close of business.

By allowing vendors, carriers and shippers to update appointments as events occur, the warehouse can get a clear picture of the day ahead. Accurate information on potential scheduling problems can allow the warehouse to be proactive in avoiding potential backups. "The ideal situation is one that allows carrier to arrive and unload 24/7," says Greg Smith, Vice President of Sales and Marketing with Landair Transport. "However, few receivers can offer this level of flexibility so the next best solution is a 24/7 delivery appointment system that is real-time and offers greater flexibility than current methods of scheduling appointments." This way, as appointments are updated, the buyer, receiver, shipper, and carrier should receive immediate notification of all changes, via email or mobile device, keeping all parties up to date.

Limited Manual Contact

More seamless handoff of data between shippers, receivers and carriers results in fewer undue delays in scheduling and fewer communication mistakes. It is the opinion of Richard Kochersperger, Director of the Center for Food Marketing at St. Joseph's University, that "To get goods to the distribution center correctly and on time, a centralized system needs to be in place. Purchase orders should go to the centralized traffic system where opportunities can be identified to reduce costs and streamline operations."⁸ Purchase order data can then be transmitted to shippers to create loads. Loads can be transmitted directly to carriers from which appointments can be made. In this way, consistent and timely data is made available to all parties.

This concludes Part One of a three-part article. Part Two will discuss achieving a solution and the resultant benefits. Part Three will be a case study illustration.

About The Author

Rachel Nemecek

Ms. Nemecek is a Senior Business Analyst at Elogex, Inc. a collaborative logistics software provider (www.elogex.com) and has several years of industry experience in supply chain operations and application development. Her background includes supervisor positions in export operations and international trade logistics at Schenker International and E.Boyd & Associates. Nemecek has a deep operational knowledge in all forms of transportation - road, rail, ocean, and air and several software methodologies including the Rational Unified Process. Nemecek graduated with Honors from the University of North Carolina at Chapel Hill.

8. Mina Williams, "Distribution Dogma", Supermarket News, February 2001