BUSINESS MANAGEMENT: Fast-Track Consolidation

When negotiating a major contract with a customer, planning and logistical skills are as important as negotiating acumen.

Recently, Charlotte, N.C.-based Harris Teeter, a Southeastern grocery store chain, contracted with Waste Industries, Raleigh, N.C., to consolidate waste hauling services at its 167 stores and distribution centers. Harris Teeter wanted to improve efficiency and cost savings, which Waste Industries said it could do. But once the waste firm won the contract, it had to quickly address logistical and service management concerns.

First and foremost, Waste Industries had to organize and manage the removal and replacement of each store's compacting equipment, which were owned by five other haulers.

Harris Teeter didn't want waste piling up while the former haulers removed the old compactors and Waste Industries installed the new ones. The grocery chain also was concerned that waste removal services and store operations would be interrupted during the process.

Consequently, creating a delivery and installation plan at more than 100 stores not already serviced by Waste Industries was critical to success.

Waste Industries also had to ensure that new compactors could be delivered on time. So it verified the availability of 66 compactors from its long-time partner, Marathon Equipment, Vernon, Ala.

By relying on its Smart Stock program, which is used to schedule production based on 30-day forecasts from the sales staff, Marathon was ready to deliver 28 compactors within two weeks. In all, Marathon manufactured 40 self-contained, roll-off horizontal compactors and 22 vertical compactors, chute-feed units to fill the order. Waste Industries already had four compactors on-hand.

To further speed the process, Marathon agreed to drop-ship the equipment directly to six Waste Industries locations. Marathon typically ships equipment to one of its centralized distribution points and has the customer pick up and deliver the equipment to the final destination.

Installation became the next concern. Waste Industries contracted several regional installation crews from North Carolina, South Carolina, Tennessee and Virginia to guarantee immediate de-installation and new equipment installation, once the compactors were delivered. Multiple two-man crews, which included one mechanic and one welder, were simultaneously dispatched in the field. At each store location, de-installation of the old compactors took place in the morning, and the new equipment installation was completed in the same day.

Because there is more to de-installation than unplugging the old box and placing the new one in its place, an extensive amount of planning and scheduling was involved at each location.

Waste Industries had one person who coordinated with Marathon, the installers, store managers and Waste Industries branch managers to ensure that the procedure went smoothly and was completed on time.

“Each site was different: different clearances, heights, angles and various-sized wall openings to accommodate the chutes. Also, there were horizontal compactors and vertical compactors to accommodate,” says James Pruett, Waste Industries' equipment service division branch manager who coordinated the process. “A lot of cutting and welding, along with electrical and hydraulic work, was involved in removal and installation. Each site is unique and provides its own set of challenges.”

To remove and install a unit, crews had to cut the chute loose and remove it, remove the old guide tracks, pull out the old box, install new guide tracks, set the new box, reinstall the chute, set the vent fan, and then rewire the electrical equipment and reconnect the hydraulics.

“The process took the complete cooperation of Marathon, the installers, the store managers, store security, delivery drivers and our branch managers to get this job done right and on time, despite lousy weather that included 8-inches of snow,” Pruett says. “The installers worked straight through until the job was completed, regardless of the obstacles.”

Additionally, there were security concerns because the waste chute openings were exposed during the equipment switch. So Waste Industries worked with store managers to provide extra security from when the existing compactors were removed until the new equipment installation was complete.

Under normal conditions, a project of this magnitude would have required four to five months to complete, according to Waste Industries. But from start to finish, compactors were delivered and installed in just two months.

Many factors went into negotiating the contract, but the company's ability to quickly address concerns over logistics and service management was even more critical.