Fall 2010[an error occurred while processing this directive]
Home Medical Equipment Company Saves Time and Fuel, Improves Scheduling and Customer Windows
Based in Sunnyvale, Texas, Shalem Medical Supply services a multitude of health care patients, including those who are on hospice and home health, as well as several medical facilities. The company provides durable medical equipment and supplies, with delivery trucks running 24 hours a day, 7 days a week. Shalem employs around 25 people and has three locations: Sunnyvale, Fort Worth, and Houston.
As the company grew and took on new patients, the complexity of getting equipment and supplies delivered in a timely manner had grown next to impossible.
"We were lackluster in efficiency, and it was difficult to maintain accountability," says Zach Paton, operations manager with Shalem. "We had no time frames whatsoever. It presented some very serious challenges."
Shalem realized that it needed to find a vehicle routing and scheduling solution that would help manage daily deliveries.
"We were looking for a software system that you could manipulate in real time and update during the day, and a lot of the systems just didn't offer that," Paton adds.
After a review of several vendors, Shalem chose ArcLogistics, thanks to the solution's cloud-based deployment model, cost, and ability to interface with the inventory management software.
Depending on the day, each Shalem office could have up to 10 vehicles in the field, making anywhere from 15 to 25 deliveries. In a business that is growing due to aging baby boomers and the social acceptance of health care taking place in the home, Shalem realized that its outdated procedures would cost it in the long run if the booming industry continues to see consolidation of smaller home medical equipment providers.
"In this industry, everybody is looking to get it quick, because we're dealing with a multitude of illnesses and disabilities," says Dennis Morgan, operations manager.
Morgan works with the Shalem dispatchers, monitoring where the drivers are; where they're headed; and the amount of stops and deliveries they have to make that day, including any last-minute additions.
"We may start our day with each driver having 12 stops," he says, "but by the end of the day, there may be 10 to 12 more tickets added to our routes."
Prior to acquiring ArcLogistics, Morgan says the company was constantly rearranging routes and providing very large time windows to customers, which was hurting Shalem competitively. Shalem employees would joke about their time windows being in the realm of, "We'll be there sometime between noon and 7:00 p.m." Since the implementation of ArcLogistics, the routing software has helped reduce time windows to two hours.
A concern many have when considering routing and scheduling software is whether or not dispatchers and drivers will accept the software. In many cases, these are professionals who have spent years learning their local street networks and customer needs and establishing processes to help get the job done.
Morgan said initially his drivers were against following the plan established by the software. At first, early routes were suggested, then drivers were able to run their routes according to their old ways and compare the two when they got back.
"They were out there three hours longer [with the older routes]. And you can track them and see," Morgan says. He explains that eventually, the drivers came around when they realized the route plans created with ArcLogistics would get them back to base sooner. There were a few drivers who had issues, especially when it came to the touchy subject of overtime. However, Morgan and Shalem came up with a bonus system. The drivers realized they were driving around 50 fewer miles per day, which began to add up dramatically, resulting in significant cost savings for the company. Morgan would reiterate to the drivers that if they saved on fuel and maintenance, that meant the potential for more money in the employees' pockets, not to mention job security in an unstable economy.
"We've got some mature drivers who have been in the business for a while," says Morgan. "And once you sit down and explain to them, yeah, maybe you're not getting 10 hours overtime, but with the time we're saving, it's going to allow the company to put more money in your pocket and give you a bigger hourly raise or be able to give bonuses."
"Our overtime costs dropped by at least 20 or 25 percent. It's decreased our fuel consumption and maintenance costs on the vehicles at least 10 or 15 percent, if not more than that," says Paton, who runs a daily report for the stops made, which includes the mileage that's driven and the fuel costs. Since using ArcLogistics, the first thing he noticed was the big drop in total mileage driven. He estimates a mileage decrease of around 10 percent just in the first week the solution was put in use.
"You will see your money is being recouped right away in maintenance, gas, [employee] hours, and the whole ball of wax. It's something that I would advise anyone that's going into a business where you're going to have multiple vehicles to look into it," Morgan says.
For more information, contact Zach Paton, Shalem Medical Supply (e-mail: email@example.com, Web: www.shalemmedical.com). To download a free 30-day trial of ArcLogistics, visit www.esri.com/arclogistics.
See also "2010 ArcLogistics Government Grant Program."