RealAnswers Vol 4 Issue 4

It’s a cliché, of course: “Plan your work, then work your plan.” And yet,
like so many cliches, it’s only a cliché because it’s been proven true so often. Overnite Transportation Company works its plans. One of the largest fleets in America, with more
than 27 thousand pieces of equipment, its very name says that it values dependability. We
visited facilities in both Richmond, Virginia, and Charlotte, North Carolina, and learned that working its plans is working for Overnite.

Mike Morgan, vice president of operations strategy, Richmond, Virginia: “Dependable, reliable, long-term relationships with our suppliers and vendors are critical to our ability to provide dependable and reliable service to our customers.

“Primarily, we talk about technical issues. For example, if we were considering more powerful engines, we’d ask the group what effect that might have on tires, or on transmissions. “Everyone works to put together components that will give us the best service and fewest problems. We often meet at one of the manufacturer’s facilities, and combine our meeting with a plant tour. Each group member gets to know the others,
and if we have a problem, it becomes ‘our’ problem.”

“Take Bridgestone, for example. For a long time, we were pretty sporadic in ordering tires. We might order none at all for a while, then suddenly, place a huge order.

“Because of our relationship, Bridgestone felt it could say that as much as they wanted our business, that kind of ordering caused huge problems for them, and made it difficult for them to supply our needs.”

“The first thing we did was work out projections, based on how many tires we anticipate needing, a year in advance. Then, we set things up so that we place orders

regularly, during the first week of each month, anticipating delivery by the second or third week.

“We’re a lot more accurate in our forecasting, and this makes it possible for Bridgestone to do a better job of filling our needs. With this plan, we have fewer problems with shortages, and it’s easier on both of us.”

Jerry Davis, manager, parts and warranty: “We have. In the past, when we tried to stock all the parts we needed ourselves, we found our fill rates were only about 80 percent.

“We also learned that we were handling parts too much. If one of our service centers needed a part, we would order it from a distributor, then ship it to them. That added a lot of time and cost.

“Now, many things go directly from the manufacturer to the end-user. Interestingly, fill rates are now in the 90s, and we’ve been able to cut the number of vendors from 125 to just under 40.”

“Quite a bit. In parts alone, we cut inventory over 40 percent. The result is we have more equipment ready to haul more customer tonnage. Right now, over 95 percent of our equipment is available to haul freight – every day.”

Mike Morgan: “We look at the decision to outsource just like any other business decision. In some cases, it makes sense. In others it doesn’t.

“For example, we have
a huge maintenance
facility in Charlotte,
North Carolina. It has a
complete retread shop,
which can produce
about 200 retreads a
day, and can do every
kind of service from
engine rebuilds to body work.

“Of course, not every fleet
would be able to create a
shop like that. In our case,
we’ve had it for years, we
have the staff to run it –
and we can run it cost-
effectively – so we do.

“At the same time, we
found we were spending a lot
of time shipping tires all over
the country to faraway
Overnite locations, using
space that could have been
used to carry freight.

“So, we made some decisions. In the
east, where we have a high

“In the western states, a long way from Charlotte, we have
transferred many of our tire and tire service needs to local
Bandag dealers. So, we’re outsourcing and insourcing at the same time.”

“That’s what we’re doing. It would make no sense to shut down facilities that are providing value, but it also wouldn’t make sense to try to do what someone else can do better.”

Mike Auvil, field director, fleet services, Charlotte, North Carolina: “A while back, we were having some pretty severe tire problems. It was a very hot summer, and we began to lose a lot of tires, mainly on trailers.

“It was becoming a huge problem. Breakdowns can easilycost $200 to $300 each,

plus a loss of one or two hours to downtime, not to mention delayed shipments and unhappy customers.

“I went to one of the Bridgestone Texas Proving Ground seminars, and was very impressed with what I learned in a scrap analysis clinic.

“Rayvon Helms and I did a computer analysis of our tire failures, and learned some interesting things.”

Rayvon Helms, fleet services tire manager, Charlotte, North Carolina: “For one thing, many of the tires that failed were very old. We discovered we had a lot of casings over eight years old, and that had been retreaded many times. We needed to get newer tires onto our trailers.”

Mike Morgan: “We began by buying a lot of brand-new trailer tires to replace the oldest ones on the ground. Almost immediately, we began to see improvement. We also created a plan to get the oldest casings out of our system by ‘cascading’ retreads back to trailer positions.”

Mike Auvil: “We also discovered we had a fairly high incidence of tire loss from impact breaks. Information provided to us by Bridgestone and Bandag suggested that, at 105 psi, in the heat of the summer, we might have been running too much inflation, making tires stiff and more prone to damage. “We cut pressures back to the lower end of the recommended range, 95 psi, and saw a reduction in impact damage as well.”

Rayvon Helms: “We have very specific guidelines for the casings we’ll retread and how we will use them.

“For example, depending on the casing’s condition, it may be retreaded for over-the-road use, for city pickup and delivery, or for yard jockey use.”

“When we retread tires in our shop, we mark them to indicate where they can be used. Our tire program, which we put together with Bridgestone and Bandag, provides clear instructions to our people all over the country.

“Every shop has complete
specifications for tire maintenance
standards, including such things as
inflation, dual matching, lug nut torque and removal tread depths.

“They also have a list of approved new
and retread tires for each axle position,
along with guidelines for retreading and
repair for both over-the-road and local use vehicles, and procedures for handling scrap
and non-retreadable tires.”

Mike Auvil: “What we’ve done is eliminate most of the guesswork. The main points of our tire program fit on two sides of a single sheet of paper, and every shop has a copy.”

“Our goal is to have every single tire – and that’s well over 100 thousand of them – inspected and checked for proper inflation every 30 days. Right now, we are at about 90 percent compliance with that plan.”

Mike Morgan: “It certainly has. In late November, our records showed that year-to-date, we have reduced over-the-road tire failures by almost 30 percent. In 1998, we had about 8,000 failures. If the trend continues, we will have eliminated about 2,400 of them. That’s about a half million dollars saved in just one year.

“It also means a huge increase in uptime. The result is more on-time deliveries, more satisfied customers, and better profits for us.”