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Mobile Self Storage

ISSUE: 2^nd Quarter 2009

Scheduling Efficiency Solving the Routing Puzzle

by David Lucas

Scheduling Efficiency Solving The Routing Puzzle One of the most challenging problems mobile storage operators are asked to solve is determining the most efficient routes to take on pickup and delivery calls among multiple customer sites and a warehouse. It can become a Rubik’s Cube® puzzle, as operators must consider several variables such as appointment times, the fastest routes, driver availability, and the proximity between stops.

The solution is even more complex when you factor in parameters such as whether the containers are full or empty while minimizing trips to the warehouse.

Fortunately, mobile operators can turn to computer software such as Microsoft MapPoint® or add-on modules offered by portable storage software vendors to help optimize trips, but many managers still find planning pickups and deliveries a puzzling task.

Mike Lowe, president and CEO of SmartBox Portable Self Storage in Richmond, Va., summarizes the chore this way: “Number one is obviously to do it as efficiently and as inexpensively as possible, and to maximize the productivity of every truck and driver, while at the same time giving great customer service.”

But warehouses are not always ideally located, and it’s hard to predict where calls will come from in a given day. One customer may be east of your warehouse, while another is directly west, north, or south. “You’re going to have some in efficiencies,” Lowe says, “and you’re bouncing around like a pinball.”

Going back and forth to the warehouse is a profit-killer, so SmartBox tries to calculate how many customer stops can be made in a day without returning to the warehouse. “That was one of the reasons we chose the transportation system of utilizing a tractor and trailer, because we can get up to seven boxes on a trailer at one time,” Lowe says. “It allows us to make as many customer stops during a day as possible, without coming back to the warehouse.”

By using the seven-box system, the company can pick up empties and then drop them off at a new location. In some markets, franchisees can make up to 17 customer stops in one day without returning to the warehouse or returning only once.

Mobile Attic in Elba, Ala., employs a system with a standard rollback truck carrying one container ranging from 8-by-8 to 8-by-20, yet the goal is similar to that of SmartBox. “You want to maximize the efforts of your driver and your equipment, so it’s best to schedule a pickup and then schedule a delivery as close to that pickup as possible,” says Ben Terrell, director of logistics for Mobile Attic.

Terrell goes on to say, “You want to be as flexible as possible for the customer, but if you can deliver a container immediately after you pick up a container, where you don’t have to take it back to the yard, then you’ve killed two birds with one stone.”

Are Customers The Top Priority?
While the customer should always be the top priority, in reality, operators have to weigh efficiency against customer expectations. It’s a tricky equation mobile operators contend with every day. “We have found that most customers have urgent needs when it comes to getting a new box. That’s obviously a priority for them,” says Lowe.

With start-up operations, getting the initial customers usually is the top priority. “Sometimes you go out of your way to satisfy that customer just to get that business so they tell their relatives, friends, and neighbors how accommodating you were,” Terrell says. “The more flexible you can be for your customers, the more apt they are to give you their business. If you can be as flexible as possible and also manage to be as efficient as possible, then obviously you’re in a win-win situation.”

Operators can expect to lose money on transportation during the first year of the business. But once a substantial business is built and routes become more condensed, it’s easier to make a profit.

“There are going to be deliveries that lose you money in the early stage,” Lowe says. “Our guidance to our franchisees is to get as many customers as fast as you can, because once you can build up to a certain level so that you can go to a second truck or a third truck, the routing process becomes much more efficient. The sooner you can get to that second and third truck, the more efficient you can be in routing.”

While mobile operators strive to serve as many
customers as possible in their territories, there are
limits beyond which the operation can be unprofitable.

One way to help that efficiency is to have rental agreements signed in advance through e-mail or fax, so customers don’t have to be home when pickup or delivery is scheduled. “If you’re picking up empties or re-deliveries to go into storage, typically the customer is pretty lenient with you in fitting into your schedule,” Lowe says.

How Far Is Too Far?
While mobile operators strive to serve as many customers as possible in their territories, there are limits beyond which the operation can be unprofitable. Many mobile operators charge higher drop-off rates when they have to travel farther with the unit.

“One of the dilemmas everybody faces is how far out do you go, what do you cover, and at what pricing level? If you go too far, all of a sudden you’re charging a price that most consumers would say is uncompetitive,” Lowe says. “You don’t want customers to have the perception that this is a real expensive product. If you go too far out and don’t charge enough, you’re going to lose a lot of money.” One way to manage pickup and delivery in remote areas, such as in satellite communities or suburbs, is to designate certain days when customers in those locations receive service. Another method some operators use is to have a small “warehouse depot” in the outskirts of a territory, where extra boxes can be stored until needed for remote customers.

“If you don’t work with the customer’s schedule, you’re not going to get the order,” Lowe says. “If we have good customer service skills and talk to the customer, we can find out what’s really required.”

For example, a customer may need a box on Thursday, but if the operator has designated Tuesday as delivery day in that zone, the customer may accept early delivery if there is no charge for the extra two days. The location of the warehouse is a key part of the scheduling puzzle, since a good location greatly affects routing and transportation efficiency. Try to determine where customers are most likely to live and then position the warehouse in a central location. Also, study the traffic patterns around the site at various times of the day.

SmartBox uses sophisticated software models to locate potential customers and warehouses. “We have data from all of our existing and past customers for all of our franchise locations in different markets; we compile all of that and take the demographics and run our existing customer database through the software models,” Lowe says. “Based on those demographics, it will plot for us in a new territory where our customer profile will most likely be.”

Software Solutions
Since manual routing can be labor intensive and potentially wastes gasoline, several software vendors offer applications that assist operators with scheduling, routing, and tracking. This is not one-size-fits-all software and may not be ideal for all mobile operations.

“There’s plenty of software that can help you with scheduling, meaning what days and times customers want things to happen,” Lowe says. “There is software that will route these trucks and schedules, but they just aren’t readily available that take into account, is it a full box, is it an empty box, are you going to be taking it back to the warehouse, or are you going to take it to another customer? We use our own internal operating software in conjunction with MapPoint and a few others that will take that schedule of stops and put it in the most efficient route.”

The beauty of portable
storage is you can start
with one location and one
truck and then scale up

Many Mobile Attic franchisees use mobile self-storage software offered by DHS Worldwide Software Solutions of Orange Park, Fla., as well as Raleigh, N.C.- based SMD Software. “Built into those software packages is a logistics manager that helps them manage that as efficiently as possible,” Terrell says. “They can interface with Google™ or Yahoo® maps to help manage that.”

DHS offers a dispatch module in its Total Recall application for mobile self-storage. According to the vendor’s Web site, the software tells dispatchers the availability of trucks and drivers. Total Recall integrates MapPoint to create an effective schedule by finding the quickest route to locations. SMD’s SiteLink integrates a mobile storage module that tracks container movement, schedules deliveries, and creates work orders.

Some smaller operators manage their scheduling with spreadsheets such as Microsoft Excel®. “A lot of folks still only have one or two trucks and don’t have so much business that they can’t manually get by that way,” Lowe says. “But if you start getting two, three, four trucks in a location and each truck is making 15 stops a day, that gets very complex. When we look at the efficiency of scheduling and routing, it really gets down to minimizing costs and yet doing it when the customer wants.”

The beauty of portable storage is you can start with one location and one truck and then scale up as you get more business. As you become more familiar with customers’ pickup and delivery routines, it becomes easier to predict the days they will request new units the most and when empties are likely ready for pickup. By building a solid customer base and expanding operations when financially feasible, you can gain efficiencies and solve the routing puzzle profitably.

David Lucas is a freelance writer and editor based in Phoenix, Arizona. He is a frequent contributor to Self- Storage Now! and Mobile Self-Storage Magazine, and the News Editor for the Mini-Storage Messenger.