In today's business environment, distributors must constantly pursue opportunities to improve the efficiency of their fleet operations. For Orion, Mich.-based Powers Distributing, the pursuit of efficiency pre-dates the current economic roller-coaster and extends into business areas that might not be on the radar of the average distributor.
The distributorship was founded in 1939 by the grandfather of the company's current co-presidents, Robert and Gerald Powers. Today, the company is the MillerCoors distributor for the northern most two of the three counties that make up the Detroit metro area, operating with more than 200 employees, including more than 40 drivers. While Powers Distributing is family owned and operated, the company uniquely relies on guidance from an independent advisory/planning board that brings in additional expertise in business, law and finance.
To say that the current business environment in Michigan is challenging, goes far beyond an understatement. With most of the region's fortune tied to the auto industry, the past few years have decimated the Michigan economy. Many small off-premise specialty stores, and restaurants of all sizes, have closed their doors over the past few years. While this has partially been offset by a small growth spike in new off-premise licenses for gas stations and convenience stores, the job and population exodus from the region has certainly taken its toll on the beverage business.
In spite of tough times in the Detroit area, Powers Distributing has been able to survive, and even thrive through the downturn, thanks to a culture of seeking out and implementing efficiency gains in every area of the company.
One key example of the company's drive for efficiency is its aggressive deployment of hybrid drivetrain technology. Powers, on the other hand, has 20 hybrids amongst its fleet of 44 tractors, representing a concentration more than 100 times greater than the industry average. (The average is 0.37 percent.)
Without using any incentives beyond the modest federal tax credit, Powers' COO and general manager Gary Thompson still expects the hybrid option to reach an ROI breakeven point within seven to eight years, compared to the company's normal target of five years. In addition to fuel savings, Thompson is projecting that maintenance savings will help bring the breakeven point well within the useful life of the asset.
The hybrids also cut exhaust emissions. Like many other fleets operating in a northern climate, Powers loads the side-load portion of its fleet in one of two huge indoor drive-through lanes. Because the hybrid trucks run on electric-only power at low speeds, they emit no diesel exhaust while indoors. "The biggest thing we noticed is a lack of diesel soot in the building," says Thompson. "The building stays cleaner, our offices stay cleaner, and of course, the noise level is reduced. So you've addressed a safety issue, as well as a general health and cleanliness issue."
Another example of saving some "green" while being green is the company's use of biodiesel in its delivery fleet. "When we began looking at biodiesel, we found that not all of our trucks could use B-20, so we started trading out the incompatible trucks to get the entire fleet B-20 capable by 2007," says Thompson. "Michigan weather makes it difficult to run B-20 year-round, so we cut back to B-5 from December through March." To ensure the quality of the biodiesel, Powers maintains and monitors its own 12,000-gallon above-ground fuel tank. Initially, Thompson conducted regular testing of the fuel deliveries, but once he gained confidence in the reliability of his supplier, he discontinued testing the deliveries. With a relatively new tank, maintenance is minimal. "We haven't done a wash out or a steam clean yet, as the tank is only three years old, but it's something we'll take a look at before long," says Thompson. "We do have the product sampled once it's in the tank to make sure we're not growing any micro-organisms."
Pursuing efficiency in fleet operations isn't limited to the on-highway vehicles at Powers. Thompson has three battery packs for each of his lift trucks. Each battery pack spends eight hours being charged, eight hours cooling and eight hours in use to get the maximum life out of the battery packs.
Thompson echoes the advice offered by most top fleet managers regarding outsourcing maintenance. "Make sure you get a good business partner in maintaining your fleet. Twelve years ago, we looked at how maintenance happens on a tractor-trailer, we looked at our operations, and said ‘we know how to sell beer, but we don't necessarily know how to do everything we need to maintain a fleet,' so we went out to find a partner at that time. Ryder was the first partner we had, and now Penske has stepped up to be a fabulous partner."
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