Musco Food: Dial-a-Deli

By Larry Barrett  |  Posted 2005-11-08 Email Print this article Print
 
 
 
 
 
 
 

The distributor of Italian meat, cheese, tomato sauce and other food uses "smart" phones to stock the corner deli faster and with fewer mistakes.

A Brooklyn deli owner would weigh out a half-pound of provolone for a customer, while eight other customers lined up for their turn. A couple of kids would squirrel around the store. And a delivery guy rolled in with boxes of prosciutto, pancetta and salami that had to be signed for—pronto.

Enter Albert Ciarletta, sales director for Musco Food Corp., a distributor of meats, cheese, olive oil, tomato sauce and other food products. In one hand, he would clutch a loose-leaf binder, comprising his company's product catalog, and in the other, a binder containing customer order entry forms. His goal: Get the deli owner's attention long enough to place an order.

"Just give us the same as last time," the deli owner would yell, reminding the salesman he needed the order delivered before noon Tuesday. Next, Ciarletta would head to his car and call in the order to one of two Musco Food customer service employees, who then typed the information into the company's order-processing software system. At that time, the system, in use for 10 years, was running on a Unix operating system developed by the SCO Group, a software vendor.

Once the order was entered, an invoice was generated and the order would be passed along to the warehouse, where employees pulled the designated boxes of cheeses and meats and prepared them for delivery.

About five times a week, though, an error made its way into an order. Maybe the salesman mistakenly requested too many or too few boxes of provolone, or perhaps the customer service staff typed in the wrong data. Either way, the time lost correcting orders after the fact, as well as fluctuations in inventory, made this paper-based system cumbersome and, at times, frustrating for Musco and its customers.

That scene, described by Musco chief financial officer Joe Chiavetta, exemplified how the eight-man sales force of the Italian food distributor based in Queens, N.Y., did business during the most recent chapter of its 75-year history. "Sometimes the order would be for 14 cases of cheese, and somewhere between the salesman and the customer service rep, it would end up being four cases," Chiavetta says. "Or it might be five instead of 50."

Last year, Musco Food closed the books on that chapter of its business. The company's executives realized they had to embrace New World technology to keep their Old World import business humming. So they adopted a new software application that uses plain-old cell phone service to speed up order entries and reduce mistakes—and dumped the print product catalogs.

Musco Food turned to the SCO Group for help. As it turned out, SCO was rolling out its first-ever mobile software application, Me Inc., designed for companies looking for a wireless order entry system.

As a trial customer, Musco wasn't charged for the software implementation. SCO says it will soon announce pricing. Mobile technology analysts estimate that the cost to develop and implement this software would have run between $10,000 and $25,000. For hardware, Musco selected Treo smart phones.

Stephen Pirolli, chief operating officer of ASK Technologies, a SCO reseller, says the obvious choice for Musco was to implement the software platform on cellular phones instead of laptop computers or other PDAs. "These guys were used to using their cell phones for everything," he says.

At first, salesmen struggled to quickly pull up the products and enter orders, Chiavetta says. But after a few weeks of practice, it became as easy as operating their beloved cell phones.

Images of 1,000-plus products sold by Musco are organized into groups such as cheeses, vegetables and oils; they can be viewed on a Treo. A Musco salesman can punch in an order as soon as he gets one from a deli owner. Then, the data is transmitted to the company's order entry software system. The system updates the standing inventory of products ordered and creates an electronic invoice that can be displayed to the customer on the spot.

The new system has improved efficiency and reduced errors, but Musco doesn't yet have hard-dollar numbers for return on investment, Chiavetta says: "We haven't been able to quantify it yet."

David Krebs, an analyst at Venture Development Corp. in Natick, Mass., says even large corporations such as Coca-Cola, which uses this type of technology for its direct-store delivery system, have had a difficult time quantifying hard ROI figures.

"It's a value-add proposition," he says. "Anytime you can automate a certain process and eliminate the labor needed to process it, you're going to see some improvement. For a company the size of Musco, it's clearly a customer service play—being able to faster and more accurately process orders."


Musco Food: On the road
The food distributor's salesmen used to lug around sales catalogs when visiting customers, then either call in or fax an order to headquarters. After an initial investment, salesmen received smart phones, which helped the company cut down on order entry mistakes and sped up order deliveries.

BEFORE

Print out sales binders. There are approximately 20 sales binders printed per month. Annual cost: $1,800.
DAY ONE: Each salesman visits an average of five customers a day. Salesmen record order data on paper. Average order: $2,000.
Salesmen either call in the orders between customer visits, or call or fax in all orders at the end of the day to a customer service rep. Time: 90 minutes a day.
DAY TWO: Orders are processed and prepared for shipping. Deliverymen deliver orders—which may include incorrect items.
DAY THREE: Returned inventory is processed, and the corrected order is sent out.

BOTTOM LINE
  • Eight salesmen each visit five customers a day, selling $2,000 per visit, for an estimated total of $80,000 in sales per day.
  • Errors cost the company approximately $200 a day, or about $50,000 a year.
  • Process takes place over three days.
AFTER

Salesmen carry a smart phone, which can display product images and order entry forms. One-time cost for eight phones: $3,000. Product/catalog order entry software*: $10,000 to $25,000.
DAY ONE: Each salesman visits at least six customers a day, or 30 a week. Average order: $2,000.
Salesman enters order information immediately on smart phone. Time: 30 to 55 minutes a day.
Customer service reps no longer have to translate orders submitted by phone or fax, decreasing order entry errors.
DAY TWO: Distribution center workers have instant access to order information; delivery can take place within 24 hours.
Deliverymen deliver orders; now make fewer trips to pick up incorrect products and drop off corrected orders.

BOTTOM LINE
  • Eight salesmen visit six customers a day, selling $2,000 per visit, for an estimated total of $96,000 in sales per day.
  • Errors in orders drop by 50%. Savings: $100 a day, or about $25,000 per year.
  • Process takes place over two days. *As a test customer, software was free to Musco


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Senior Writer
larry_barrett@ziffdavisenterprise.com
Larry, of San Carlos, Calif., was a senior writer and editor at CNet, writing analysis, breaking news and opinion stories. He was technology reporter at the San Jose Business Journal from 1996-1997. He graduated with a B.A. from San Jose State University where he was also executive editor of the daily student newspaper.
 
 
 
 
 
 

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