For busy families, neighborhood grocery delivery has always been a welcome service—and a valuable time-saver.  However, when the “neighborhood” is over 1,500 ZIP codes in the Chicago area and along the U.S. eastern seaboard, the logistical challenges of such a service can be daunting. When Peapod, the fast-growing Internet grocer, was hungering for a turnkey solution that integrated planning, routing, scheduling, and delivery confirmation, UPS-LT served it up on one platter—with Roadnet.

Founded in 1989, Peapod has quickly grown to be the nation’s leading Internet grocer, serving over 280,000 customers in Chicago, New England, and the mid-Atlantic metropolitan regions. Peapod is a wholly owned subsidiary of international food provider Royal Ahold, and works with sister supermarket companies including Stop & Shop and Giant Food.

Peapod stages its deliveries out of two free-standing, 75,000-square-foot warehouses located in Lake Zurich, Illinois and in Gaithersburg, Maryland (a Washington, DC suburb), supported by 17 additional “warerooms” of 7,000 square feet each that are housed within partnering grocery stores. Peapod offers its customers over 8,000 products, including meat, seafood, produce, organic, kosher, and prepared foods, cosmetics, office supplies, school supplies, and beer and wine in select markets. The online interface also features specials and sale items.  Customers submit their orders online, and can choose a two-hour time window for delivery.

Peapod’s service has proved popular, growing at a rate of 25% a year in most areas. Still, no household makes the same order week to week. As Ken Fanaro, Senior Manager of Logistics and Transportation Planning at Peapod, notes, “We not only have a massive service area; we never have a route that is the same from one day to the next. We have no standing orders and we maintain two-hour delivery time windows, so our planning sessions are dynamic to say the least.”

Initially, Peapod had developed its own front-end software for web ordering and calculation of delivery time windows, while employing another vendor’s large-scale routing and scheduling tool. As its business grew, the company attempted an enterprise-level upgrade of the route-planning piece in 2004. But even after a year of trying to make that upgrade fit, Peapod wasn’t happy with the results.

In addition, there was another challenge to address. “We had a single solution with vehicle tracking GPS solution that didn’t talk to the transportation planning software in place,” says Fanaro. “We were looking for an integrated solution that would scale out with our rapidly-growing business.”

From the start, UPS Logistics Technologies was a likely contender to support Peapod.  “We’d known UPS Logistics Technologies as a quality software vendor for years,” says Fanaro. “When we tested Roadnet and Roadnet Transportation Suite Web Services, we found them to be excellent and decided to move forward with their implementation.”

UPS Logistics Technologies’ integrated suite of products with one database allowed Peapod to have the visibility they needed for all of their multiple locations.  Integrating all the modules through Roadnet Transportation Suite Web Services provided routing and proof of delivery for each location.

Peapod’s conversion to Roadnet began in October 2006, and the company will complete the rollout in 2007.  Although its conversion to Roadnet is relatively new, Peapod has already noted a ten percent decrease in the time it takes to generate routes.

“That doesn’t sound like a lot, until you realize that we have 36 planning sessions a day at the center,” explains Fanaro. “With Roadnet in place, we don’t have to grow our planning personnel; we can grow our business with the same amount of planning staff.”

Enhanced customer service is another benefit that Peapod can see right away.  “The key is that UPS Logistics Technologies is a quality software vendor that listens to Peapod’s needs, as a customer, from development to tech support, and the software helps support the logistics effort of our unique and complex business,” says Fanaro.   “Their ability to listen to us and understand our needs has been excellent.”