Keeping Pace with Demand

Pavlov famously used dogs to illustrate his theory of operant conditioning, associating a ringing bell with a tasty treat so that his pooches eventually started drooling at the sound of a bell, even without a treat as a payoff. Today, we see operant conditioning at work every time a Krispy Kreme "Hot Krispy Kreme Original Glazed Now" sign is lit --- only it's people doing the drooling instead of dogs. The demand has been as hot as the doughnuts since the very beginning, and Krispy Kreme has been working to keep up with that demand since founder Vernon Carter Rudolph cut a hole in the wall of his shop in 1937 to get doughnuts into the customers more efficiently. Today, with stores in 41 states and six countries, it takes more than knocking another hole in the wall for Krispy Kreme to improve efficiency, it takes technology such as the handheld
route automation system recently rolled out to help save time for drivers and improve convenience at customer sites.

Late to the Game
The big question, however, is why did it take so long? "We were admittedly a late adopter of handheld technology," says Krispy Kreme CIO Frank Hood. It wasn't a question of need, because until the rollout of the route automation system from Intermec, Krispy Kreme's route sales personnel would carry a subtotaled invoice with preordered quantities for particular customers generated from a customized route accounting system developed in-house. The route sales personnel would manually enter adjustments and re-extend the invoice, with these manual adjustments keyed into the accounting system when the route personnel returned. In essence, it was the same sort of paper and pen-based system that would've been familiar to Vern Rudolph in the 1930s. It was old school, but the system worked. Still, there was plenty of room for improvement. But Krispy Kreme had hard parameters any new system had to meet. "The technology had to be mature and stable enough for us to support it with a small IT staff," explains Hood, adding, "we needed the system to be as fault-tolerant as paper. Paper doesn't run out of batteries or stop working because a system goes down." '

Krispy Kreme had already conducted two route automation tests and decided against deployment because of concerns about ease of use and support. But the company's project team kept on, conducting an extensive analysis of route operations and determining exactly what would be needed from a new system. The project team finally selected a system using custom software developed by Color Velocitor running on Intermec's 740 mobile computers and PW40 mobile printers.

Working Order
The new system works like this: Every night, Krispy Kreme generates a suggested order for each of its retail customers the following day. Each store has an IBM AS/400 computer, into which the appropriate orders are transferred. Each morning, the orders for each route, along with a six-week sales history and notes or special instructions for each customer are downloaded to the drivers' individual 740 Color computers. On the route, customers can preview orders before approving them, and the 740 Color uses a pen stylus to electronically capture an approval signature. The integrated bar code scanner is used to record each item as it's unloaded from the truck as well as to record return items. A secure memory card in the 740 Color provides backup.

Lofty Goal
One of the goals of the handheld rollout was to increase accuracy, says Dr. Ken Goehle, Krispy Kreme senior systems analyst, adding, "we feel, at this stage, we have met our goals and more. Using the bar-coding function on the device provides less chance for errors," he explains. "And by capturing electronic signatures and our ability to reproduce invoices and signatures through our self-service Web site, we hope to significantly reduce the issue of lost invoices."
Customers who lose invoices -- a common enough occurrence -- can now use that self-service Web site to view and review their invoices online, and print invoices -- including the digital signature -- on demand, rather than calling Krispy Kreme and asking customer service to find the original and send out a replacement copy. "That's been a real time-saver for us," says Hood.

Settling the Score
Another real timesaving benefit of the new handheld system shows up when the drivers return to the stores to reconcile. In the old days, drivers would hand over stacks of paper invoices, which would be manually keyed into the AS/400s, then wait around until a settlement report could be produced, reviewed and signed. Now, the Velocitor software lets drivers generate their own sales and return reports, which are printed on the mobile printer and submitted as backup while the 740 Color networks with the AS/400 via Ethernet to upload activity data. According to Krispy Kreme, the entire checkout process for a driver can be completed in about two minutes, a tremendous improvement over the previous 15 minute to 30 minute cycle. "Our drivers love it," says Dr. Goehle.

Underlying the obvious successes of Krispy Kreme's handheld rollout, which is on schedule to reach every company-owned store (covering more than 500 routes) by Q3 2004, is the system's robust nature, which has required little IT support, one of Krispy Kreme's primary goals. Hood admits, "I didn't expect to see our stores adopt the system and troubleshoot as well as they did. The first 90 routes were rolled out in only three months." And so far, the system has been every bit as reliable as the old paper and pen system.

Pavlov's drooling dogs helped illustrate the theory of operant conditioning, and Krispy Kreme's human fans continue to do so. While the company admits it came to the technology late, Krispy Kreme's handheld route automation system, like the hole in Vern Rudolph's shop wall, is making sure those fans get the tasty treats they crave.