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DSi Case Study: Thompson Tractor

Headquartered in Birmingham, AL, Thompson Tractor Company, Inc. is the full-line Caterpillar dealer for Alabama and northwest Florida and the MCFA (Mitsubishi Caterpillar Forklift of America) dealer for most Georgia. The company operates from 30 locations within their territory.

Thompson Tractor specializes in sales and service of Caterpillar products, including earthmoving, construction and material handling equipment, and diesel engines used for electric power generation, on-highway and marine propulsion applications. They attribute their success to an unwavering commitment to customer service.

Transportation Challenges

Thompson Tractor started as a small, family run business in 1957. Since then it has grown into a large enterprise covering a several state territory. Transportation was managed at the branch level, with the rental counter sales person handling dispatching; essentially operating as many independent hauling companies.

According to Kenny Bishop, Vice-President of Sales, “Thompson Tractor employs 32 drivers, owns 23 tractor-trailers, 11 rollbacks, & 26 lowboys and we drive over 2,500,000 miles per year while burning over $1,500,000 of fuel per year. It became evident that we were operating a very large hauling company within Thompson.” They decided to investigate ways to improve their transportation operations.

They began by talking to other Caterpillar dealers to learn how they managed their transportation function. Their investigations lead them to create a Six Sigma project to understand the challenges they faced and the economic impact to their business. This analysis proved that they needed to create a separate transportation department with a centralized dispatching process.

They selected Dispatching Solutions Transportation Manager solution to help organize their new transportation division and make the transition to a centralized transportation operation. DSi’s Transportation Manager is used be a majority of Caterpillar Dealers in North America.

Planning Is the Key

Thompson Tractor’s implementation went quickly and smoothly. They attribute the success of their implementation to the amount of pre-planning that they did.

A great deal of effort was put into preparing their transition to a centralized dispatching model. Open communications about the changes they were making helped to ensure team buy-in. These were the main factors in the success of their implementation.

In a matter of a few short months, a new transportation department was created and new processes were put into place. They now operate their transportation division with one Supervisor and three Dispatchers. Each Dispatcher manages eleven Drivers.

The entire implementation process was completed within eight weeks of starting the project.

The Results

Today, Thompson Tractor operates a highly professional and efficient transportation department. Three Dispatchers manage their fleet of 35 trucks and handle the hauling requirements for all four of the company’s divisions.
As a result of implementing DSi’s Transportation Manager software, Thompson Tractor quickly gained the efficiencies they were looking for. One of the first things they were able to do was reduce the size of their fleet by 4 trucks. They also were able to change their drivers’ work schedules to four 10-hour days per week; leading to a 50% reduction in overtime for the first year they implemented the software.

Additional improvements include a reduction in call-off time to return to yard from 3 days to 1.2 days and a reduction in outside hauling costs of 50%. According to David Dunagan, Transportation Division Manager, “rental coordinators no longer need to line up transportation, making then free to perform other tasks at the branch. Managers are now able to track the total cost of each rent. They now know what it actually cost them to move a piece of equipment. They can now track costs in several different areas, like per mile, hour, load and piece of equipment.”
As Kenny Bishop puts it, “by implement DSI software we were able quickly to transition our transportation function into a more efficient and profitable operation.”