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Cost-of-Service Experts (August)

 

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Assessing the biggest influencers of fleet costs versus revenue.

by This email address is being protected from spambots. You need JavaScript enabled to view it. Fleet Owner, August 2016

With $2.7 billion in annual sales, Chicago, IL-based Hill-Rom Inc. is a leading provider of medical technologies for the health care industry, including the manufacturing and distribution of hospital beds, furniture, patient lifts, operating room, diagnostic and other health care equipment, and medical technology systems.

In 2015, the company increased revenue by 24% and adjusted earnings per share by 17.3%. These increases were driven by acquisitions, continued growth in core business, streamlining operations, and aggressive management of costs.

Greg Muller, finance director, North American Supply Chain, says the company’s private fleet is part of this corporate focus on streamlining and cost reduction. “We’ve always had a private fleet,” he says. “It operates on a solid foundation of proven value as our drivers carry a majority of Hill-Rom products to customers.”

With the addition of finance-trained staff to transportation, Hill-Rom is giving much closer scrutiny to fleet data now available in greater volume.

“As we apply higher analysis to this data, we are moving toward a better balance of assessing high customer service levels versus total cost per mile and costs  as a percentage of revenue,” Muller says. “This is an ongoing learning process. We are closing the gaps in our understanding of which metrics with what measurement tools yield the best results—improved cost optimization of capacity—from a strategic perspective.”

Muller says the fleet must respond to highly variable factors that include distant locations, variances in product volume and frequency, mixes of differentiating product value and sophistication, and peak/off-peak seasonality with quarter-end and year-end surges. Private fleet drivers haul 10% of inbound shipments and some 75% of outbound shipments directly to customers.

Private fleet capacity is expected to grow somewhat in the near term while continuing to rely on outside carriers and 3PLs (and even rail services for the first time) where it is not cost-effective to use Hill-Rom fleet drivers.

The private fleet consists of 40 employee drivers and 45 tractor-trailers, with drivers out four or five nights a week making deliveries throughout the United States and Canada. “The challenge is to maintain the right balance of drivers and trucks for peak demand levels, get  the right products to customers in the right time frames, and capture all expenses on all runs to all customers for a true cost picture—and we won’t jeopardize the customer experience,” Muller says.

“Our transportation team members are experts in customer service,” he continues. “Now, we also are becoming experts in the cost of service. This is a huge transition.”

Although Hill-Rom has been a long-standing NPTC member, active engagement in the council’s programs and services has grown dramatically in the past 18 months and picked up when Kelly Newsome, CTP, senior financial analyst, learned about NPTC.

“The NPTC Benchmarking Survey Report initially captured our attention, and Kelly pursued it to get more involved,” Muller explains. “Hill-Rom team members attended the Private Fleet Management Institute and the NPTC Annual Conference in January and April, and Kelly became the first company employee to earn her Certified Transportation Professional credential.” 

“NPTC’s network of fleet practitioners and suppliers/vendors using data-driven benchmarking and best practices represents a perfect fit for us,” Muller concludes. “Partnership with NPTC is absolutely helping to make us better.”

Standards for Bigger Stakes (July)

Road congestion, eroding, unsafe roads and highways with insufficient lanes for high traffic volume, and dangerous bridges are at epidemic levels.  Poor road conditions account for one-third of highway fatalities.  Lawsuits, jury awards, and settle­ments from accidents involving commercial trucks are routinely at multimillion-dollar levels.     . . .  read more . . .

Benchmarking Excellence (June)

Measuring private fleet performance is reaching higher standards of accountability with each passing year. Ten years ago, fleets went through a seasonal exercise comparing how well their numbers "stacked up" against. . . .  read more . . .

Shifting Gears (May)

Headquartered in Naperville, IL, KeHE Distributors LLC (KeHE) distributes natural and organic specialty and fresh products to retailers across the U.S. and Canada. In the past three years, KeHE has grown rapidly through both organic sales increases and strategic acquisitions. . . .  read more . . .

Aaron’s Fleet (April)

Aaron’s Inc. is the nation’s leading sales and lease-to-own retailer of furniture, home appliances and accessories, computers, and consumer electronics. Founded in 1955 and headquartered in Atlanta, the company has more than 2,000 company-operated and franchised stores in the . . .  read more . . .

Tone at the Top (March)

Founded in 1982, Dallas-based Daryl Flood Relocation & Logistics is widely recognized as one of the best diversified transportation businesses in the United States. Under the innovative and visionary leadership of founder and CEO Daryl Flood, the company has a long-standing reputation for hiring quality people  . . .  read more . . .

A Model Convention (February)

Over the past 15 years, the National Private Truck Council’s annual conference has become the centerpiece event and premier marketplace crossroads for the private fleet truck industry. Each year, the conference grows a little bigger and provides more value than the year before.

The annual conference has steadily grown in overall attendance figures  . . .  read more . . .

The Best People (January)

Since its founding in 1968, Southern Wine & Spirits of America Inc. has expanded through both internal growth and acquisition of established wholesalers. It is now the country’s largest wine and spirits distributor, operating in 35 states and  . . .  read more . . .

Gold Standard (December)

At its founding and from the time of its charter class graduation in 1993, the National Private Truck Council’s Certified Transportation Professional (CTP ®) program’s guiding vision was to create a widely recognized and respected   . . .  read more . . .

Be Remarkable (November)

Founded in 1921, Coborn’s Inc. started as a produce market in Sauk Rapids, MN, and has grown to 52 grocery stores in five upper Midwest states under a family of brand names including Coborn’s, Cash Wise, Marketplace Foods, and Save-a-Lot stores. In addition, the company provides a home-delivery operation with $36 million   . . .  read more . . .

Prime Grade Fleet (October)

Part of a privately held family business of integrated companies started in 1946, American Foods Group provides highly dependable on-time delivery of the freshest beef to foodservice, retail, and international markets. The company ranks as the fifth largest beef producer in America, shipping over 4 million lbs. daily.   . . .  read more . . .

A Higher Calling (September)

As disciples of Jesus Christ, members of The Church of Jesus Christ of Latter-day Saints strive to follow the biblical admonition to feed the hungry. Welfare services—helping members in need with basic life necessities—became a cornerstone of the Church’s mission at its founding . . .  read more . . .

Safety by the numbers (August)

The opening general session of this year’s National Safety Conference will highlight a report on a year-long study that just ended. Titled The Efficacy of Active Safety Technologies and Policies within Private Fleets, the report was sponsored by NPTC and conducted by the . . .  read more . . .

Superior fleet solutions (July)

Three years ago, the privately owned company formerly known as Hickory Springs Manufacturing changed its name to HSM and began a dynamic transformation of corporate rebranding and reinvigoration. A new CEO with dynamic and visionary leadership came on board, organized a new ...   read more . . .

Sustainable Solutions (June)

UNIFI Manufacturing in Greensboro, NC, is a leading producer of multi-filament POY, textured and staple polyester, nylon-textured yarns, recycled PET chip, and premier value-added yarns. Since 2007, UNIFI has become a global leader in offering transparent and certifiable    read more . . .

Better Ingredients (May)

Last year, Papa John’s Pizza celebrated its 30th anniversary and was recognized as # 1 in customer satisfaction among national brand pizza companies. The company’s enormous success remains driven by read more . . .

“Best Drivers in America” (April)

By reputation within the industry, working as a truck driver for Walmart’s private fleet has always been viewed as one of the best jobs to have – a company with outstanding pay and benefits, an industry-leading read more . . .

Biggest and Best (March)

This year’s NPTC Annual Conference scheduled for April 26-28 at the Hilton Cincinnati Netherland Plaza and Duke Energy Convention Center is on track to be the largest, best-attended, and greatest read more . . .

Productivity Boost (February)

The National Private Truck Council has joined the Steering Committee of the Coalition for Transportation Productivity (CTP), a group of shippers, motor carriers and their associations seeking to increase truck weight limits.      read more . . .

Premier Safety Culture (January)

Founded nearly 20 years ago, Sentinel Transportation is a national model of exceptionally high safety management standards and operational practices.  The company’s 750 employees, including 650 drivers and 400 tractors, operate out of 40 terminals. Sentinel provides specialized         read more . . .