By Robert Glenn Sims

Dominion East Ohio, a subsidiary of one of the nation's largest energy producers and transporters, is in the fourth year of a five-year program of installing automated meter reading equipment on 1.2 million customer meters. The project involves replacing older meters or updating them with encoder receiver transmitter devices that transmit meter information via radio signals.

The company plans to complete the automated meter reading installations by the end of 2011. When completed, the technology will enable the company to obtain as many as 10,000 reads in a single route, compared with the 400-600 reads recorded per daily walking route.

While the new automated meter technology provides many consumer benefits-eliminating estimated meter reads, improving meter reading accuracy and reducing the need for Dominion East Ohio to enter a customer's property-the company was looking for a more efficient logistics plan. There were challenges keeping sufficient inventory, delivering inventory efficiently to installers and discarding outdated equipment.

Dominion East Ohio Meter Operations Manager Jeff Angeletti viewed the challenges as an opportunity first to optimize end-to-end logistics distribution of gas meters and supporting products, and second to increase the company's sustainability efforts by recycling and remanufacturing the old equipment. Dominion East Ohio, however, couldn't achieve this alone. It turned to ASW Global LLC, a minority-owned supply company, for help.

"It was a natural fit for our core competencies and also our business strategy," said André Thornton, ASW Global president and CEO.

ASW recognized that Dominion East Ohio's strategy included a plan for recycling material and strengthening the local economic enterprise, therefore another local partner was engaged: Slesnick Steel & Recycling. The objective was to create a collaborative solution among Dominion East Ohio, ASW and Slesnick Steel & Recycling that would extend beyond a traditional partnership exchange to benefit stakeholders and the environment.

ASW led the logistics distribution design approach using its supply chain optimization model. Slesnick Steel & Recycling President Ed Slesnick focused on assisting Dominion East Ohio and ASW in executing reverse logistics to maximize the material-recovery solution and improve environmental impact.

The collaboration among the three companies resulted in a streamlined solution: Materials are shipped to Ohio and installed in consumers' homes while replaced units are recovered and recycled in the state and used by local companies to manufacture items such as bearings.

Specifically, the team established an Origin Distribution Center at ASW's Mogadore, Ohio, facility that receives less-than-truckload (LTL) and truckload (TL) to consolidate and delivers in milk runs-TLs-to the operating facilities at a planned replenishment frequency.

It also was necessary to adjust distribution process elements, including order releases' data systems and safety stock requirements, delivery frequencies, network minimum and maximum levels and transportation planning. This optimized the supply chain network and provided the best total cost value, operating efficiency and environmental sustainability.

The collaborative solution is on track to yield the following annual savings:

• Reduce the cost of inbound transportation by 24.3 percent,
• Produce a 52.3 percent savings on outbound transportation to and from local operation shops, and
• Deliver an 80 percent improvement in the value gained from reversed logistics and material recovery.

Other results include reduced traffic congestion, reduced fuel usage, reduced air pollution and recycling of wood pallets.

"The team delivered outstanding outcomes resulting in an efficient and sustainable process that set the stage for continuous improvement," Angeletti said. "We found substantial cost savings in warehousing, transportation and material recovery; drastically reduced the energy involved with shipping; and recycled the replaced units. Best of all, the project is keeping the work in northeast Ohio."

Similar to the Dominion East Ohio story, companies across the country can collaborate successfully to develop solutions that benefit the local economy and help sustain the environment by following five key steps.

Step 1: Define a start point.

In the case of Dominion East Ohio, the starting point was to streamline the shipping and logistics. The old metering equipment process began with material shipped from a Nebraska vendor to a logistics management company based in Pennsylvania, passing through Dominion East Ohio's service territory. The equipment eventually was shipped to 11 utility local shops upon request with little coordination of shipments. Once the material reached the local shops, employees loaded equipment into their service vehicles for installation at homes or businesses. Once the replacement equipment was installed, the same employees returned the old equipment to the local shops for disposal.

Step 2: Define required changes.

The Dominion East Ohio project required a complete review and re-design of the logistics management. A critical review of the distribution and disposal and recycling process also was warranted.

Step 3: Clarify what success looks like.

A one-time project plan was not sufficient. Success had to be more than on time and on budget. The partners needed to assist in designing a logistics management process that would improve inventory control, reduce cost and improve customer satisfaction.

Step 4: Identify the right strategic partners.

Sometimes existing suppliers cannot or do not want to change their process to adapt to new approaches. In the case of the Dominion East Ohio challenge, ASW and Slesnick Steel & Recycling made adjustments to ensure the solution would be effective.

For example, Slesnick Steel & Recycling made substantial investments in high-tech equipment for managing collection and processing material for domestic and overseas mills.

Step 5: Establish a baseline to measure collective results.

The baseline for the Dominion East Ohio project was to achieve substantial cost savings in warehousing, transportation and material recovery, as well as reduce the energy involved in shipping and recycle the replaced units.

Collaboration among companies with similar values and interests will improve the local economy and help sustain the environment. In this example, the companies supported and retained local businesses, protected the environment and improved stakeholder value. The project's success can be measured by managing the variables to achieve an inclusive solution that supports the community engine: people, environment and business profitability.

About the author: Robert Glenn Sims is the chief operating officer for ASW Global where he leads the strategic development of all supply chain services for client customization, including outsourcing services, emerging market sourcing and enterprise cost modeling. He has more than 30 years in the supply chain industry.

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