Hardee Transportation, Case Study Example

This case provides several different concerns that Jim O’Brien of Hardee Transportation must face in order to not only appease his customers and sales team, but to provide service standards that are both safe and reasonable for his delivery drivers and shipping staff. The hours-of-service rules as stated by the Department of Transportation have changed to reflect total on-duty hours of 14 maximum hours at a time (FMCSA, 2008). However, Hardee Transportation currently practices the previously regulated 10-hours of maximum drive time for O’Brien’s drivers. This causes several concerns because drivers who are paid by the mile are not able to complete as much driving time under the new pick-up and delivery regulations when calculating the included time at the distribution centers. Meanwhile, customers are also demanding that Hardee Transportation adhere to the new regulations and the Sales team fears that failure to do so would cause large customers to rebel and a potential threat to take their business elsewhere.

Based on this information, the first key concern that arises is that the Department of Transportation regulations have changed. This not only means that O’Brien must follow the regulations but in order to do so, he must work to adjust his current pick-up and delivery processing. The DOT regulations count total on-duty hours for shipping and driving in one single shift. Therefore, drivers must be able to maximize their total shift. The current procedures with a 10-hour maximum drive time – based on O’Brien’s fear of fewer total driving hours – means that the current pick-up procedure requires greater than 4 hours to complete for any shipment. If this is the case, then the process would not appear to be as efficient as necessary and O’Brien should take steps to lean the processes in order to reduce unnecessary wasted time and effort. In this case, it may actually be beneficial to hire additional staff to assist drivers specifically with the pick-up process in order to reduce wasted time that drivers may spend not actually performing their driving duties during the course of their shift.

A second major concern is that O’Brien does not wish to penalize the drivers who are typically paid per mile, per load or per hour. By potentially reducing driving hours, the compensation paid to drivers can also be reduced which can lead to turnover within the driving team and a consequential increase in opportunity cost where managers are spending time hiring and training new drivers and performing human resources duties as opposed to actually managing the drivers (Freund, n.d.). A potential solution to this issue may be to turn from compensating drivers by mile or load to developing a combination method of payment per hour in addition to payment per mile. This would reduce the potential for drivers to lose compensation while also enabling Hardee Transportation to effectively adhere to the Department of Transportation regulations.

Finally, a third key concern involves the diffusion of the Sales Team who work directly with the demanding customers and O’Brien’s shipping team. The Sales Team must act on behalf of the customers in order to continue to maintain the business relationship. The problem with this is that as customers have changes in demands, such as demanding adherence to the new regulations, there is a strong threat of losing the business for failure to meet these demands. In this scenario, O’Brien should implement the two previously mentioned solutions as well as hold a meeting with managers from both departments to express changes that are being made and to reinforce that the goal is to please the customer while also keeping the safety and security of the drivers and shipping staff in mind. Additional solutions may come from this meeting as well, but effectively communicating the goals to all managers from both teams as opposed to individually as they happen to raise issues is a key error in miscommunication.

Bibliography

FMCSA. (2008, November 19). Hours of service of drivers. Retrieved from http://www.fmcsa.dot.gov/rules-regulations/topics/hos/index.htm

Freund, D. M. (n.d.). Center for transportation research. Retrieved from www.ctre.iastate.edu/pubs/truck_idling/freund.pdf