From taxi fleets to tasty treats

June 1, 2007
Entrepreneurs Hoss Rafaty and Ali Khoshgowari know how to apply principles of transportation management to different businesses. They started with several

Entrepreneurs Hoss Rafaty and Ali Khoshgowari know how to apply principles of transportation management to different businesses. They started with several fleets of taxicabs, and later used that experience to build a successful ice cream distributorship. In 1986, the two founded Yumi Ice Cream Company in Irving, Texas.

The ice cream partners firmly believed their new company would flourish from a dedication to hiring quality people, offering opportunities to individuals from diverse cultural groups, creating effective merchandising, continuously improving the delivery of quality ice cream products, promoting safety, and operating and maintaining an immaculate and efficient fleet. They formed a business policy that each customer, whether large or small, is a business partner, and not merely a customer. And a customer's success is Yumi Ice Cream's success; so they strive to achieve both.

The formula works. Yumi Ice Cream has grown to be an exclusive distributor of Nestlé, Häagen Dazs, and Dreyer's ice cream products, serving more than 10,000 accounts through five distribution centers with more than 100 trucks and some 170 employees.

Solid expansion

A year after it was established in Irving, Yumi Ice Cream purchased a distribution center in Fort Worth, Texas, that serviced 86 convenience stores. This considerably increased Yumi Ice Cream's business, which at the time ran one truck to service its customers. “We cancelled service to 50 of that company's accounts because they weren't buying an adequate amount to make a delivery worthwhile,” says Khoshgowari, vice-president of Yumi Ice Cream. “At the same time, we staffed up our sales department and started growing the business.”

As the business grew, Yumi Ice Cream started buying freezers and placing them at customer locations throughout the Dallas-Fort Worth Metroplex, stocking them with the best of all major brands of ice cream. More delivery trucks were added to accommodate the growth.

In 1997, Nestlé invited Yumi Ice Cream to handle its freezer and ice cream program exclusively. By that time, Yumi Ice Cream had about 1,500 retail accounts. “We investigated the offer and decided to accept their proposal as the exclusive distributor in the Texas market,” Khoshgowari says. “So we replaced all our freezers with Nestlé freezers and stocked them with Nestlé ice cream and novelty products.”

Two years later in 1999, with Yumi Ice Cream's growth and consistency in day-to-day performance, Nestlé added Houston, San Antonio, and Austin markets to the company's exclusive territory. As a result of the joint venture between Nestlé and Häagen Dazs, Yumi Ice Cream acquired the exclusive rights to Häagen Dazs for its entire market area - Dallas, Fort Worth, San Antonio, Austin, Houston, and all surrounding areas.

The Häagen Dazs line included tubs of ice cream, which added institutional customers such as restaurants, food services, and hotels to Yumi Ice Cream's business. As growth continued, Yumi Ice Cream created a wholesale division to service amusement parks and sports venues with bulk deliveries.

Due to expanding business and customer demand, Yumi Ice Cream offers frozen foods to customers. Nestlé's extensive product lines gave Yumi the ability to offer Stouffers, Lean Cuisine, Hot Pockets, and assorted pizza lines. Dreyer's line of ice creams was added in 2003 when that company combined with Nestlé.

The bulk of Yumi Ice Cream's business, however, comes from “pack-and-peddle” deliveries to convenience stores, grocery stores, drug stores — among them Walgreens and CVS — and food service outlets. Basically, the delivery driver visits a pack-and-peddle account, determines what products are needed, and then stocks the freezer.

Distribution centers

Yumi Ice Cream's corporate office in Dallas includes a distribution center. The company has similar office-distribution centers in Fort Worth, Houston, San Antonio, and Austin.

Each center operates in the same manner and is run by a general manager, who reports to Khoshgowari. Each center has a fleet of trucks, drivers, service technicians, warehouse staff, and management. Trucks, warehouse equipment, and freezers are owned by Yumi Ice Cream and purchased through dealers. Vehicle and equipment maintenance is performed by company personnel on-site.

Yumi Ice Cream's pack-and-peddle trucks are Isuzu N Series with automatic transmissions. Trucks are under 26,001 lb gross vehicle weight rating (gvwr), and drivers don't need a commercial driver license.

Pack-and-peddle Isuzus have 12- to 16-ft Johnson Refrigerated Truck Bodies with cold plate refrigeration systems. The trucks with 12-ft bodies are gasoline powered and have a 14,500-lb gvwr. They are being phased out and replaced with bigger diesel-powered Isuzus that can accommodate larger bodies. The Isuzus with 14-ft bodies have a gvwr of 17,950 lb; 16-foot bodies, 19,500-lb gvwr. All of these trucks are diesel powered.

Khoshgowari says he chose Isuzu because its low-cab-forward design has a comfortable and user-friendly work environment. More importantly, when compared to conventional cab trucks, he says the Isuzu provides better visibility, handling, and maneuverability, all of which are especially important for maneuvering through crowded streets and parking lots.

The Johnson Refrigerated Truck Bodies have cold plate refrigeration systems inside the body compartment to absorb heat as a means of maintaining desired temperature levels. The plates are “refrozen” each day at the end of the shift during an electrical plug-in of the onboard compressor/condensing unit.

The molded FRP (fiberglass reinforced plastic) design and insulation of the Johnson body “helps to keep the desired temperature more consistent for a longer time than steel bodies with mechanical refrigeration systems,” says Khoshgowari. The pack-and-peddle drivers “can make more stops per day with cold plates because they're designed to hold temperature longer than mechanical units.”

FRP is the first barrier to heat gain because it is a very good insulator, helping to prevent heat from migrating into the body, especially on hot summer days, according to Greg LaFrance, director of sales and marketing for Johnson Refrigerated Truck Bodies. The Johnson bodies for Yumi Ice Cream use 3/8-inch FRP panels with five-inch insulation in the wall and six-inch insulation in the floor and ceiling.

“Drivers can make all their stops, opening and closing the truck doors, without compromising the product. In the Texas heat, mechanical refrigeration systems lose efficiency after six or so stops.”

On average, Yumi Ice Cream's pack-and-peddle trucks make 17 to 22 stops per day. A majority of accounts typically are serviced every other week. Deliveries are made Monday through Friday with drivers required to make their first stop at or before 6:30 am. They return to the distribution center between 4 and 5 pm.

Another reason for choosing the cold plate system is cost efficiency, says Khoshgowari. “Cold plates are less expensive to operate than mechanical refrigeration. They can be efficiently recharged using electricity rather than costly petroleum used by mechanical units. Plus, cold plates have fewer moving parts than mechanical blowers, so they are less likely to break down.”

Recharging is another advantage. “The cold plate system gets plugged in overnight for quiet electrical recharging,” Khoshgowari says. “There's no blower system noise to disturb residential and commercial quiet zones.”

Three types of pack-and-peddle routes are used by Yumi Ice Cream: within 50 miles of the distribution center; 50 to 100 miles of the distribution center; and more than 100 miles from the distribution center. All routes are assigned, and drivers have 160 to 200 customers.

Typically, the pack-and-peddle trucks are replaced every five to seven years, depending upon mileage. Because Yumi Ice Cream is standardized on Isuzus, the chassis are kept and cannibalized for parts rather than being traded or sold.

The Johnson bodies are replaced every 15 to 20 years. At 10-year intervals, they are completely refurbished.

For pallet loads, Yumi Ice Cream uses its largest trucks — four diesel-powered refrigerated straight trucks with manual transmission. These consist of two Internationals and two Isuzus, all with 22-ft Morgan bodies with swing-out rear doors, Thermo King refrigeration units, and Maxon fold-out liftgates. These four trucks, for which a CDL is required, average four to five stops per day. They are typically replaced and sold every five to seven years.

Ten diesel-powered Isuzu N Series trucks handle freezer and equipment deliveries. They are mounted on Morgan 18-ft bodies with swing-out rear doors and Maxon fold-out liftgates. The replacement cycle for these trucks also is every five to seven years.

Technicians service the company's freezers and other equipment, including 10 Ford Cargo vans, plus one Mercedes Sprinter van, assigned to the head technician who travels to all of Yumi Ice Cream's locations. These vans usually are replaced every five to seven years.

Business types

The bulk of Yumi Ice Cream's business comes from its pack-and-peddle operation. Products distributed include ice cream, frozen food, and novelty food products.

It is an orderless service, says Kevin Gibbs, general manager of Yumi Ice Cream's Dallas, Texas, distribution center. The driver, known as a sales merchandiser, goes into an account on a scheduled basis, takes care of merchandising displays and promotional materials, cleans and maintains the freezers, and restocks and rotates product.

Each order is entered on a portable handheld device for wireless order management. At the end of the day, the sales merchandiser places the handheld device into a printer, installed in the cab of each pack-and-peddle truck, and prints out a report of the day's sales. The sales merchandiser then calls in the order, based upon what was sold.

After completing the paperwork and refueling the truck, he returns to the distribution center. By that time, the product for the next day's route is ready, and warehouse personnel help the driver load his truck.

The interior of each pack-and-peddle truck body is outfitted with a rack-and-shelf system, Gibbs says. Each sales merchandiser loads the truck according to a schematic. A grab-handle and self-cleaning traction-grip step at the rear of the truck makes for a safe, comfortable entry and exit of the truck body. Plastic strip curtains inside the single centered rear door helps maintain interior temperature.

After his truck is loaded, the sales merchandiser parks it and plugs in the body's cold plate system for electrical recharging. The next morning, the sales merchandiser prints his reports and route schedule, unplugs his truck, and is ready to go. Yumi Ice Cream uses Territory Planner from UPS, a multi-destination route optimization system, to calculate the quickest delivery pattern for each route.

Institutional and wholesale accounts call in their orders, says Gibbs. The trucks that handle these accounts are loaded at night for delivery the next day. The driver receives his routed delivery assignment prior to starting out.

Reserve drivers, equipment

Each of Yumi Ice Cream's distribution center has three to five spare pack-and-peddle trucks, plugged in and ready to go. “I can't just call any company to rent a cold plate truck immediately,” Khoshgowari says. “In our business, we can't afford to miss deliveries because a truck is down. The same goes for not having a driver.”

Four to five reserve certified drivers are on call at each location. If a driver is not available, the extra drivers take over the route. They are assigned a TomTom portable handheld GPS navigation unit to assist them in working a route. If they don't have to cover for someone, the spare drivers accompany another driver who has a large workload.

Khoshgowari says he is considering equipping all his trucks with GPS units. At present, only the freezer and equipment delivery trucks have TomTom GPS navigation units installed because new accounts are always being added. If he does outfit the fleet with GPS, the units will have the capability to provide directions as well as track vehicle location.

Inventory management

Each Yumi Ice Cream's distribution center has a walk-in Caravell freezer for a total of 44,000 sq ft of floor space. All freezers have a three-tier rack system for product storage.

The company uses Clark brand powered industrial trucks for all its freezers and warehouses.

Yumi Ice Cream has more than 600 different products. Inventory turns every seven to ten days. To keep up, it receives deliveries on a regular schedule, with several trailer loads per distribution center.

At present, inventory management is done manually. Items are counted and entered in the computer system. However, Khoshgowari says that with the steady increase in business, the company is investigating a move from paper to real-time wireless processing systems to increase accuracy, speed order fulfillment, reduce inventory requirements, and heighten overall efficiency and productivity.

Low driver turnover

For Yumi Ice Cream, driver turnover is about 20% because of the company's formal driver selection and training methods, particularly when it comes to hiring drivers for the pack-and-peddle routes. “Our sales merchandisers have to wear several hats,” says Khoshgowari. “They have to be able to drive the truck, handle sales, and do merchandising. It's complicated, so we really work hard to find the right person that can do all this.”

About 35% of drivers are hired through referrals, with the remainder coming from newspaper advertising. Khoshgowari says his emphasis on hiring, retention, training, and safety comes from his involvement with running taxi fleets.

‘We are very strict about who drives our vehicles,” he says. “A driver must have at least five years of driving experience.” In addition, each driver candidate's application is carefully reviewed and then a background check is done. Depending on an applicant's history, he may be disqualified. Otherwise, a motor vehicle report is obtained for the past three years and reviewed for traffic violations and accidents. “If the applicant is at fault for any of these, he is not accepted.”

Before any driver applicant is offered a job, a general manager takes him on a test drive that simulates a typical delivery route to assess the applicant's driving skills. If the applicant scores less than 90, he is disqualified. However, he may come back and re-take the driving test at a later date.

The driving test, created by Yumi Ice Cream, spells out a laundry list of proficiencies that must be completed, such as vehicle control, following distance, response to conditions, lane changes, intersections, and backing. For each one, the applicant must meet certain performance measures. His score is based on how well he does.

An applicant scoring more than 90 gets the opportunity to keep working until a score of 100 is reached. He will then be offered a job, with a stipulation. He must attend and pass a defensive driving class at his expense, or have a certification from such a class within the past 180 days. “Only then is a driver hired,” says Khoshgowari.

Training takes two to three weeks, depending on the type of driving job. If it is pack-and-peddle, the driver is trained on the route he will be assigned so he gets to know the area and the accounts. “At the end of his initial training period, each driver is evaluated to see if he is ready to go out on his own,” Khoshgowari says. “If not, the driver receives additional training.”

Additional training

Because of the complexity of their jobs, pack-and-peddle drivers get additional training on their varied duties and responsibilities and how to use the handheld order device, Gibbs says. A specially-produced 15-minute training CD takes a new sales merchandiser through the typical day, demonstrating all the tasks that he will perform and how to handle various situations.

Sales merchandisers are paid on salary and commission, with bonuses on performance. Other drivers are paid hourly. All drivers report to driver supervisors.

Driver safety and courtesy are of utmost importance to Yumi Ice Cream. Vehicles are meticulously maintained, and safe driving is continually emphasized to all drivers.

“We want all of our drivers to be courteous, observe the rules of the road, and remain accident free,” says Khoshgowari. “Having all drivers go through defensive driving decreases their chances of being involved in an accident.”

All Yumi Ice Cream trucks are outfitted with a 3rd Eye Rear Vision Camera System from Alliance Wireless Technologies to allow drivers to be able to see behind their vehicles and avoid backing into other vehicles, people, walls, and such. A television monitor is mounted on top of the truck's dashboard to give the driver a complete view of what is behind the truck. The camera is mounted on the top rear center of the truck.

Also on the rear of each Yumi Ice Cream vehicle is a sticker with a toll-free telephone number to report unsafe driving. It is part of a safety program monitored by Safety First, which provides information on drivers' habits and helps identify high-risk drivers, says Khoshgowari. This enables the company to be proactive in educating and retraining unsafe drivers to prevent accidents and promote driver safety.

Outlook good

Looking ahead, Khoshgowari sees continued growth for Yumi Ice Cream.

“Our founding business principles and philosophies have served us well, helping us build customer loyalty, which has helped growth and profitability,” he says. “Our success also comes from being a family-oriented business that really cares about its people, which has helped create dedicated, loyal members (employees).

“These members are the representation of the Yumi Ice Cream and our most valued assets.”

About the Author

David Kolman

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