Musco Food: Dial-a-Deli
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.
Musco Food Corp. Base Case
Headquarters: 5701 49th Place, Maspeth, NY 11378
Phone: (718) 326-1070
Business: Distributor of Italian meats, cheese, tomatoes and other Italian food to delis and markets throughout the Northeast.
Chief Financial Officer: Joe Chiavetta
Financials in 2004: Sales of $25 million to $50 million.
Challenge: Implement a wireless order entry system for salesmen.
- Reduce weekly order correction costs from $4,000 a month to zero.
- Increase total sales by 12% in 2005, from more than $25 million.
- Cut customer service expenses on order entry by $4,000 to $6,000 a month.