Nogales Produce Inc. is a Dallas-based supplier of Mexican fresh produce, groceries, and restaurant supplies, serving more than 2,000 stores and restaurants throughout Texas, Arkansas, Oklahoma, Kansas, Missouri, and Louisiana. Those customers come in all sizes and varieties, ranging from mom-and-pop stores to government facilities, school districts, and large wholesale and retail operations. So it's probably no surprise that as its business grew, Nogales found itself struggling to manage an increasingly complex delivery operation.
What makes the business so challenging is both its volume and its lack of predictability. Nogales' biggest customers require daily deliveries of up to two loads of Mexican food products, bringing the typical daily total to 3,000 deliveries. But that's not a number Nogales can count on. Its daily volumes fluctuate widely, since it's not uncommon for customers to call on Nogales at short notice when one of their other suppliers fails to deliver.
Historically, the company has relied on a manually produced schedule and asked individual drivers to adapt to those short-notice changes. But since drivers don't have visibility over the entire network, that approach often proved inefficient.
"You have drivers crossing all over each other; you add one customer and it begins to happen, then you add another, and the inefficiencies really start to stack up," Albert Rodriguez, Nogales' senior vice president of operations, said in a release. "Also, when a human is doing the routing, they have preconceived notions about what is best, but [those assumptions aren't always correct]. Or perhaps they want to take care of one customer over another because it's an older relationship. But that shouldn't come into consideration; you need to route based on what is best for all customers."
GOING THE TECH ROUTE
Nogales turned to technology to solve the problem, adopting routing and scheduling software from Frisco, Texas-based Paragon Software Systems Inc. The software allows a central planner at Nogales' Dallas headquarters to quickly identify opportunities for greater efficiency while also boosting customer service levels, even as the schedule changes.
The produce supplier expects Paragon's Single Depot software to cut its operational costs by some 15 percent by streamlining its complex delivery operations. Among other benefits, the company expects to achieve big reductions in driver costs and route planning time, which will allow it to redeploy resources elsewhere in the organization. The platform will also allow Nogales to track key performance indicators (KPIs) such as stops per mile driven, stops per driver, stops per on-road hour, cases per drop, cube utilization, route profitability, and percent on plan.
On top of that, the automated system is expected to lead to service improvements. "With Paragon, we know how long the driver should be out there, plus we can give that information to the customer so they know when to expect delivery," Rodriguez said in the release. "I think this is going to distinguish us [from] our competition. Giving customers accurate updates is a game-changer for us."