Case Study: Associated Food Stores

If any company knows about the complexities of managing enterprise assets, it's Associated Food Stores (AFS), a Far West, Utah, wholesale grocery distributor that deals with more than 600 supermarkets across the western United States. Five years ago, the $1.2 billion firm (fiscal 2002 sales), installed a yard-management system at its headquarters and warehouse. "We thought it was state of the art though the system never achieved more than a 75% rate of accuracy for managing assets. It wasn't a whole lot better than a yellow legal pad and radios," says Tim Van de Merwe, internal logistics manager. In practical terms, that meant that workers at the 1-million-square-foot warehouse and loading yards had to search for trucks, trailers, dollies and other equipment. Things could get especially confusing during a snowstorm, when numbers and markings on the pavement disappeared. Sometimes perishables left on loading docks spoiled while logistics managers searched for a trailer. Even worse, AFS didn't know the condition of equipment and which trucks and trailers were best suited for specific tasks. And making decisions about new investments was nearly impossible. That changed last year when AFS turned to a wireless asset-management system from WhereNet Corp., Santa Clara, Calif. AFS began using electronic tagging across a wireless network. Suddenly, the company had real-time location, messaging, telemetry and 802.11b applications at its disposal. Among other things, the asset-management technology eliminated long truck check-ins at the entrance gate and the need for dispatchers to determine the status of a trailer, dollies and other equipment at any given moment. Today, AFS vehicles stream in a separate entrance, and managers view their location on PC screens that display color-coded dots that move in real-time sequence with the equipment they represent. Van de Merwe says that the system has provided other benefits. By identifying the precise location of all of its yard equipment at all times, AFS can use existing equipment at maximum efficiency while reducing the need to buy and lease additional trailers, tractors and dollies. The firm also is able to identify which assets require maintenance or replacement -- based on usage patterns. To be sure, AFS has bagged some impressive results. It has slashed the number of data clerks overseeing operations from 125 to one (the firm has redeployed almost all to other, higher-value positions). It has saved more than $100,000 a year in food-spoilage costs. And, over the last year, it has reduced the number of tractors from 120 to 67. That has netted savings of $80,000 per tractor, another $40,000 to $50,000 a year per driver, and fuel savings that tally well into the six figures. Says Van de Merwe: "Effective asset management helps us gain a competitive advantage. It's an essential tool."