Krispy Kreme Case Study - Intermec

Case study
Krispy Kreme
At a glance
Route automation helps Krispy Kreme attract fresh customers
Industry: Consumer Goods
Application: Store Delivery
In 1937 Vernon Carter Rudolph cut a hole
in the kitchen wall of his shop in Winston-
Salem, NC out to the street to streamline
the process of getting his popular
Krispy-Kreme doughnuts from kitchen to
customer. Today demand for his doughnuts
is as hot as ever.
Since then, the company has grown from
a Southeastern icon to an international
franchise with 361 stores in 41 states
and six countries. Krispy Kreme also
operates over 140 company stores that
are independent of its franchise locations.
In addition to serving walk-in customers,
the company stores prepare and deliver
doughnuts sold at other retail outlets.
Recent rapid expansion created a number
of challenges. To make sure products are
always fresh and available, Krispy-Kreme
now relies on a route automation system
to streamline deliveries from kitchen to
customer. The system – custom software
developed by Velocitor and award-winning
740 Color mobile computers and PW40
mobile printers from Intermec – saves time
for route drivers and improves convenience
at customer sites.
“We are admittedly a late adopter of
handheld technology,” said Krispy Kreme
CIO Frank Hood. “We were not going to
implement handheld computers until the
technology was mature and stable enough
for us to be able to support them with
a small IT staff. We needed the system
to be as fault-tolerant as paper. Paper
doesn’t run out of batteries or stop working
because a system goes down. It’s great for
disaster recovery.”
The Morning Routine
The new system provides the reliability of
paper without the burden of paperwork.
Krispy Kreme’s self-written demand
planning and forecasting system at its
Winston-Salem headquarters calculates a
suggested order for every retail customer.
The orders are transferred to an IBM
AS/400 computer at the company store
that supports each customer. Orders for
each route, the six-week sales history for
each customer, plus notes for the driver are
downloaded to the 740 Color before route
drivers arrive in the morning. Drivers pick
up their computers and then begin their
daily deliveries.
Route drivers arrive at retail locations and
review orders with customers. Customers
use the 740 to preview invoices before
approving them. To accept, the customer
signs on the 740 Color screen using a pen
stylus. The route driver then produces
a signed invoice for the customer with
the PW40 workboard printer and begins
unloading the order. Drivers use the

integrated bar code reader in the 740 Color
to scan each item as it is unloaded, which
updates Krispy Kreme’s inventory record.
Drivers also pick up unsold items from the
previous day and record them by scanning
the bar code.
Rapid Reconciliation
The major time savings occurs when drivers
return to the store. Each store supports
between three and 25 routes, which are
reviewed and reconciled daily. The process
took between 15 and 30 minutes per route
before the system was automated. “Our
goal was to save time in labor in our back
offices throughout the country, and we’re
doing that,” Hood said.
“Drivers came in at the end of the day with
paper tickets from all their customers.
Someone would have to key data in
from all the route drivers’ tickets,” he
said. The process was about as popular
as day-old doughnuts. While the driver
waited, the clerk would enter order and
return information from the tickets into
the AS/400 and produce a settlement
report. Route drivers couldn’t leave for the
day until they reviewed and signed their
settlement reports.
In response, Velocitor developed an
application for Intermec mobile computers
that allows drivers to generate their own
sales and return reports. Drivers print their
own reports on the mobile printer and
submit them to the clerk. The computer
then is placed in a docking cradle that
interfaces directly with the AS/400 system
to upload activity data. Settlement sheets
now are calculated and printed in about 20
seconds. The entire check-out process can
be completed in about two minutes.
“Our drivers love it,” said Dr. Ken Goehle,
Krispy Kreme senior systems analyst, who
worked extensively on the mobile project
and developed most of the infrastructure
applications. “They get paid on commission
and can do their jobs more efficiently if
they don’t have to hang around for a half
hour at the end of the day.”
Customer service report requirements also
have been reduced. Customers frequently
lose invoices, but they no longer have to call
Krispy Kreme to send a replacement copy.
Using a self-service Web site, customers
can view invoices online and print them
on demand, complete with the digital
signature. “That’s been a real time-saver
for us,” Hood said.
Third Time’s a Charm
The system has required little IT support,
which was an absolute requirement for
implementation. Krispy Kreme previously
conducted two route automation pilots
and decided against deployment each time.
The new system has met and exceeded its
tough standards.
“I did not expect to see our stores adopt
the system and troubleshoot it as well as
they did,” Hood said. “The first 90 routes
were rolled out in only three months.
The intuitive design of the Velocitor
software and the reliability of the Intermec
equipment make it all possible.”
Krispy Kreme is on schedule to complete
rollout to all company-owned stores, more
than 500 routes, by the third quarter of
2004. Currently, Velocitor is translating
the application software into French so
it can be used in Quebec, and the system
may also be deployed to other international
locations.
“Velocitor has done a wonderful job
of developing and supporting this
application,” Goehle said. “We talked to
several potential providers, and Velocitor
was the only one who really seemed to
know about our business requirements
and who didn’t try to sell us something we
didn’t want..”
A major reason the project has been so
successful is because the Krispy Kreme
project team did an extensive analysis of
route operations and determined exactly
what it needed from its hardware and
software.
“We analyzed the top five things that
could go wrong with the mobile computing
device, and evaluated providers based on
how they did on those criteria,” Hood said.
“These were things like how easy is it for a
driver to replace a memory card, and how is
the battery life. Intermec came out on top
as the best device to use in the field.”
The 740 Color is part of Intermec’s awardwinning
700 Series family of mobile
computers, which was named the Best
Industrial Class PDA in 2003 by Pen
Computing Magazine and was also ranked
the number one industrial PDA used in
field service and manufacturing operations
by Venture Development Corp. (VDC), a
market research and consulting company.
Most important to Krispy Kreme, the
mobile computers and printers are as
reliable as they are powerful. After two
unsuccessful pilots and a strategy for
late adoption, the new technology has
been welcomed and is recognized as a key
component to the company’s continued
growth.
Krispy Kreme has come a long way since
Vernon Carter Rudolph first cut a hole in his
kitchen wall, but it is still finding innovative
ways to deliver hot, fresh products to its
customers.
North America
Corporate Headquarters
6001 36th Avenue West
Everett, Washington 98203
Phone: (425) 348-2600
Fax: (425) 355-9551
South America & Mexico
Headquarters Office
Newport Beach, California
Phone: (949) 955-0785
Fax: (949) 756-8782
Europe/Middle East &
Africa Headquarters Office
Reading, United Kingdom
Phone: +44 118 923 0800
Fax: +44 118 923 0801
Asia Pacific
Headquarters Office
Singapore
Phone: +65 6303 2100
Fax: +65 6303 2199
Internet
www.intermec.com
Worldwide Locations:
www.intermec.com/locations
Sales
Toll Free NA: (800) 934-3163
Toll in NA : (425) 348-2726
Freephone ROW: 00 800 4488 8844
Toll ROW : +44 134 435 0296
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Phone: (425) 348-2762
Media Sales
Phone: (513) 874-5882
Customer Service and Support
Toll Free NA: (800) 755-5505
Toll in NA : (425) 356-1799
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Technologies Corporation. All other trademarks are the
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611532-01B 02/07
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