Tag Archives: logistics

Chris Keith, FlexXray
FST Soapbox

COVID-19: We’re In This Together

By Chris Keith
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Chris Keith, FlexXray

It’s no secret that the COVID-19 pandemic had a major impact on industries and individuals around the world. According to the World Health Organization, as of June 21, 2020, there have been 8,708,008 reported cases of COVID-19 globally, including 461,715 deaths. In a recent article by Forbes, healthcare contributor William Haseltine stated that we are gathering personal stories and statistics right now around COVID-19 survivors who have suffered permanent injuries from the virus. Many experts believe that COVID-19 is also an economic downturn trigger. Author and financial planner Liz Frazier says that even as recessions are a normal part of the U.S. economic cycle, lasting about five and a half years on average, the possibility of a recession starting due to the outbreak would be unprecedented.1 The COVID-19 pandemic is a natural disaster that rocked the world and is a reminder of how connected people are in a global economy.

As quarantine regulations and temporary closures happened across the United States, businesses had to mobilize quickly, pivoting their strategies, distribution efforts, products and beyond to accommodate the new safety measures and external pressures. The food and beverage industry was no different. Although food manufacturers were deemed essential in the United States by Cybersecurity & Infrastructure Security Agency (CISA), manufacturers had to adapt to a new normal during the shutdown.2 Some of the biggest changes that occurred in the food manufacturing industry include fluctuating customers, prices, product and ingredient availability, packaging, distribution, and food quality and safety.

Shifting Demand, Customers and Food Pricing

Sharp changes in food prices and product availability shocked supply and demand and impacted the entire food supply chain across the United States. According to the USDA, there were record levels of demand for food at grocery stores, and, on the supply side, there has been a reduced supply of meat products over the period of quarantine as meatpacking plants faced temporary closures, decreased slaughter pace, and slower production due to COVID-19 regulations.3 Poultry prices took a sharp dip and have been rebounding, hot dog prices are at an all-time high due to increased demand, and beef prices have been climbing due to scarce supply and limited fresh production. Food pricing fluctuation is one of the largest food industry impacts felt directly by the general public and the on-premise sector. Restaurants and bars were crushed by the skyrocketing ingredient prices and mandatory temporary closures due to COVID-19.

As restaurants, school cafeterias and hotels were temporarily shut down due to quarantine restrictions, the food manufacturing industry’s most prominent customers practically disappeared. Before COVID-19, the USDA reported that in 2018, restaurants provided approximately 50% of meals consumed on a daily basis, up from 41% in 1984.4 When COVID-19 hit, consumer trends showed a monumental shift to eating at home. During the height of the pandemic, more people ordered take out from fast-casual dining places and ate from home. A recently published study reveals survey findings that suggest American’s food habits are shifting, as 54% of respondents confirmed they are cooking more, and 46% of respondents, baking more.5 As customers and demand changed, products and packaging had to follow suit.

Scores of manufacturing facilities had to rapidly respond with different products to meet changing consumer demand, despite already being in mid-production for products for restaurant kitchens, cafeterias, and the like. Most of these large-scale and wholesale products would never make it to their original, intended destinations. Manufacturers swiftly adapted their production, creating retail-ready goods from product made or intended for restaurant or fast food supply. These food production facilities had to creatively find ways to change product packaging sizes, salvaging good product with take-home cartons and containers. Some processors pre-sliced deli meat for grocery stores around the country, as markets were unable to slice the meat in-store, dealing with restrictions on the number of people who could work at any given time. The food manufacturing industry showed great ingenuity, repurposing food and getting creative in order to keep the country fed and bridge the gap in convenience shopping that consumers have grown used to.

New Distribution Pressures

There were also disruptions in the food industry’s distribution channel, and the logistics of distribution were adversely affected. Facilities faced increased pressure to have tighter production turnarounds from new consumer behavior and out-of-stock situations as many markets dealt with temporary panic shopping at the beginning of the crisis. Food manufacturing facilities have always faced tight deadlines when dealing with fresh and refrigerated product. However, COVID-19 introduced new critical, immediate needs to the food supply, and, more than ever before, facilities were pressed for time to deliver. Some facilities didn’t have enough dock loading time, and certain cold storage facilities could not meet the raised demands for dock times, making it harder to get product through the distribution channel to consumers. Shipping and logistics came at a premium. Drivers and logistics companies were at capacity with their service offerings, and unable to mobilize to meet the needs of every manufacturing company.

On top of the pressures from consumer demand, manufacturing facilities had to procure PPE (personal protective equipment) in mass for all employees and adjust employee schedules to meet new national and state-wide quarantine restrictions that strained the system. The PPE requirements are part of the distribution logistics, as plants are unable to distribute safe product without adhering to the system’s regulations. Senior Vice President of Regulatory and Environmental Affairs for the National Milk Producers Federation, Clay Detlefsen, said in an article for Food Shot Global that the whole food industry’s system has been turned on its head, as manufacturers are concerned that if they start running out of PPE and sanitation supplies, they would ultimately be forced into shutting down their food processing plants.6

Regulating Food Quality and Safety

Perhaps one of the biggest concerns surrounding the food supply chain during the height of COVID-19 for both producers and consumers was food safety. While safety and quality are always a high priority in the food industry, rising concern around the transmission of COVID-19 became a new and unprecedented challenge for food quality experts. In February the FDA declared that COVID-19 is unlikely to pass through food or food packaging, but that didn’t stop public concern.7 It was critical for food manufacturers and producers to ease public fear, keep the food supply stable and eliminate foreign material contamination that would adversely affect consumers and brand reputation. A mass recall due to foreign material contamination would have dire consequences for the strained food supply chain during this historic crisis. At the same time, the pandemic limited quality and food safety teams, as key teams had to work remotely, shift schedules had to drastically change to meet new safety regulations, production lines cut in half, and quality and safety teams had to make rushed decisions when it came to reworking product.

Some plants that faced potential foreign material contamination risked sending their product into distribution without a thorough rework, up against tight deadlines. And some plants adopted a multifaceted strategy and did something they’ve never done before: Reworked product on hold for potential foreign material contamination themselves. Many of these companies reworked product with their extra available lines, to keep as many of their workers as possible, despite the fact that food production employees are untrained in finding and extracting foreign contaminants. Inline detection machines are also typically limited to metal detection, often incapable of consistently catching many other types of contaminants such as glass, stones, plastic, bone, rubber, gasket material, container defects, product clumps, wood and other possible missing components. Food safety is of the utmost importance when a crisis hits as the food supply chain is crucial to our success as a nation and as an interconnected world. Facing new pressures on all sides, the food industry did not neglect food safety and quality, even while adopting new strategies. There was never a doubt that the industry would overcome the new challenges.

Looking Forward

The food industry has rapidly switched business strategies, swiftly turned around new products, found new ways to align product traceability and work remotely while still meeting industry standards and production expectations. Manufacturing facilities repackaged and repurposed food to keep the country fed, maintained job security for many employees and procured PPE in mass. The food industry is also full of manufacturers and plants that accomplished things they’ve never done before. There are shining examples of heroism in the food and beverage space as a growing list of food businesses, restaurants and delivery services have donated to healthcare workers on the front lines. Many large companies donated millions of dollars and pounds of food to feed their teams, their communities and the less fortunate.8 In the midst of a large obstacle, we have reached new heights and discovered new capabilities.

The challenges aren’t over. The food industry is still facing the effects of COVID-19 shutdowns on businesses even during this period of re-opening in different parts of the country. A lot of places and companies have been hit hard, some even closing their doors for good. Forbes reported at the onset of the pandemic that Smithfield Foods shut down one of its pork processing plants after hundreds of the plant’s 3,700 employees tested positive for coronavirus.8 Tyson Foods also shut down several meat processing plants under threat of the virus.8 Smithfield and Tyson were not the only ones. Food Dive has a compiled tracking system for coronavirus closures in food and beverage manufacturing facilities, recording reduced production, temporary closures, and permanent shutdowns across the industry. We expect some of the COVID-19 challenges to alleviate over time and hope that business will slowly return to normal and previously closed facilities will be able to re-open. However, we strongly hope some changes to the industry will remain: Creativity, ingenuity, resilience, adaptability, and a strong commitment to customers and partners. The bottom line is we’re in this together––together, we’re resilient.

References

  1. Frazier, L. (April 21, 2020). “How COVID-19 Is Leading The US Into A New Type Of Recession, And What It Means For Our Future.” Forbes.
  2. Krebs, C. (May 19, 2020). “Advisory Memorandum on Identification of Essential Critical Infrastructure Workers During COVID-19 Response.” Homeland Security Digital Library.
  3.  Johansson, R. (May 28, 2020) “Another Look at Availability and Prices of Food Amid the COVID-19 Pandemic.” USDA.
  4. Stewart, H. (September 2011). “Food Away From Home.” The Oxford Handbook of the Economics of Food Consumption and Policy. 646–666. Oxford University Press. doi: 10.1093/oxfordhb/9780199569441.013.0027
  5. The Shelby Report. (April 17, 2020). “New Study Reveals Covid-19 Impact On Americans’ Food Habits.”
  6. Caldwell, J. (April 16, 2020). “How Covid-19 is impacting various points in the US food & ag supply chain”. AgFunderNews.
  7. Hahn, M.D., S. (March 27, 2020). Coronavirus (COVID-19) Supply Chain Update. FDA.
  8. Biscotti, L. (April 17, 2020). “Food And Beverage Companies Evolve, Innovate And Contribute Amid COVID-19 Crisis.” Forbes.
Megan Nichols
FST Soapbox

COVID-19 Led Many Dairy Farmers to Dump Milk

By Megan Ray Nichols
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Megan Nichols

Much of the news coverage surrounding the COVID-19 pandemic mentions infection numbers and fatalities. Those are undoubtedly important for showing parts of the overall impact. However, it’s easy to overlook the ramifications felt by some professionals. One recent example concerns the instances of dairy farmers dumping milk.

Numerous Factors Contributing to the Problem

The pandemic drastically and dramatically disrupted life. Many of the associated changes affected milk producers, but perhaps not in the ways people expect. As schools closed and restaurants operated on delivery or a takeaway-only basis, the demand for milk typically consumed in the food and educational sector went down.

Consider, too, that the pandemic forced the closure of enterprises that did not necessarily serve large quantities of milk every day but still likely placed ongoing orders with suppliers. For example, a daycare center might give toddlers boxes of dairy beverages each day during snack time. Coffee shops often add milk to their lattes or set out bottles for people who want to put some in their coffee.

When coronavirus cases emerged in the United States, many people panicked and flocked to grocery stores for essentials. Milk is often one of the staples people buy before winter storms hit, and they wanted it to prepare for the pandemic, too. One Target store in New Jersey sold out of its entire stock of milk in only five minutes. Stores responded by imposing per-person limits on the product.

If the demand exists, what caused the milk surplus? Part of it boils down to a lack of space at milk processing plants. A related issue is that processors typically serve particular markets. One might cater to retail buyers while another primarily addresses needs in the food service sector. They lack the infrastructure to pivot and begin accepting milk orders from a new type of customer, particularly if the milk-based product is substantially different, like sour cream versus ice cream.

A First-Time Phenomenon

Farmers discarding milk is not unheard of, but it’s not something many producers do regularly. Andrew Griffith, a professor at the University of Tennessee, said that some farmers had to do it recently for the first time in careers spanning decades. He explained, “It’s not that [dumping] hasn’t occurred from farm to farm.” Adverse weather conditions can delay pickups, and unexpected supply spoilages might lead to too much milk.

“But we’re talking about a level of dumping that is not common at all. There [are] a lot of farmers that are experiencing dumping milk for the first time in their 30- or 40-year careers,” Griffith said in an article published on The Counter.

The highly perishable nature of milk poses another problem contributing to the milk surplus. That aspect hit dairy harder than some other types of agricultural goods. People could put grain into silos, but storage is more complicated for dairy products.

Any exposure to higher-than-recommended temperatures causes spoilage. The subsequent risk to consumers means farmers must throw it away. Cold storage facilities are essential for the dairy industry. Statistics from 2018 indicated an average of 10.67 cents per kilowatt-hour for energy consumption at commercial facilities. However, cold storage facilities operate 24/7, so their energy needs are often higher than those of other commercial buildings.

Cows, dairy, farms
The coronavirus is only one of the challenges likely to impact the dairy industry in the coming months and years. Dairy consumption has been trending down for years. (Pexels image)

The delicate nature of the product is another unfortunate aspect that may lead to dumping milk. If a processor has no room to accept the raw goods, there’s nowhere for them to go. In April The Wall Street Journal reported that in one week, producers threw out as much as 7% of the milk in the United States from that period. The same story highlighted how a specialty cheese factory saw sales of its chèvre and ricotta drop by 95% in one day.

Coping With Dairy Industry Fluctuations

The coronavirus is only one of the challenges likely to impact the dairy industry in the coming months and years. A Statista chart profiles the progressive decline of milk consumption in the United States. The average amount of milk per person in 1975 totaled 247 pounds. It plunged to 149 pounds by 2017.

There’s also the issue of people showing a growing preference for plant-based milk alternatives. One industry analysis tracked sales of traditional and oat milk during mid-March. Purchases for the first category rose by 32%, while oat milk sales soared by 476%. A potential reason for that huge increase in the latter category is that supermarkets sell shelf-stable milk alternatives. Those often stay in date for months when unopened.

People can get them in the refrigerated section, too, but they may have preferred not to as they cut down their shopping trips due to COVID-19. Consumers also noticed the increasing number of milk-like beverages made from hemp, hazelnuts and other options. If a person tries one and doesn’t like it, they may try a different option.

Despite those challenges, some dairy farmers anticipated favorable trends—at least before the coronavirus hit. Producers get paid per 100 pounds of milk. Katie Dotterer-Pyle, owner of Cow Comfort Inn Dairy, said 2013 was a particularly good year for the rates. Back then, farmers received about $30 for every 100 pounds, although the price has stayed at approximately $17 per 100 over the past two years.

When Might the Milk Surplus Ease?

This coverage emphasizes the lack of a quick fix for the dairy industry strain. As restaurants reopen, that change should help address the problem, but it won’t solve it entirely. Some enterprises refocused their efforts to better meet current demands. One Dallas-based plant that handles dairy products more than halved its output of cardboard milk cartons and increased production of whole and 2% milk for the retail sector. It is now back to normal manufacturing runs.

As mentioned earlier, though, many processors can’t make such changes. Dumping milk becomes a heart-wrenching practice for hard-working producers. Many tried to compensate by selling their least-profitable cows for slaughter or making feeding changes to reduce the animals’ production. Some private entities committed to purchasing milk from farms and getting it to food banks. Other analysts say the government should step in to help.

People in the farming community support each other with tips and reassurance, but most know they could be in for a long struggle. As supply chains recovered from the initial shock of COVID-19, most people stopped panic buying, and stores no longer set product limits. Things are moving in the right direction, but the impacts remain present.

A Complicated Issue

Many state leaders have let businesses reopen, and others are following. Any step toward a new kind of normal is a positive one that should gradually help the dairy sector. However, much of what the future holds remains unknown, mainly since this is a new type of coronavirus, and scientists still have plenty to learn about mitigating it.

Tatiana Bravo, INTURN
FST Soapbox

Looking Ahead: The Digital Supply Chain and Fast-Moving Consumer Goods

By Tatiana Bravo
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Tatiana Bravo, INTURN

The global supply chain is changing. The fast-moving supply chains that power many of the world’s top businesses are being transformed before our very eyes, as companies all over the globe compete to beat their competitors through digitalization.

What we’re now seeing is the emergence of a digital supply chain, with processes powered by innovative and exciting new ideas turned into software.

As we look ahead to the coming months and years, we can expect to see incredible changes affecting the supply chains of all manner of businesses. In fact, we’d go so far as to say that any business that’s serious about competing on the global stage will have no choice but to embrace these innovations and go digital.

So, what exactly can we expect to see from the digital supply chain in the near future, and how might these changes affect fast-moving consumer goods?

Advanced Analytics

The potential of analytics is incredible, particularly when you look at supply chains.

Recent years have seen data rise to the forefront of many business leaders’ concerns. Increasing numbers of companies have started to pick up on the impact that informative data can have on their strategies, and ultimately their chances of ongoing success in the marketplace.

The supply chain is no exception to this rule. As the power of analytical software improves, businesses will be clamoring to gain access to, and make use of, the huge amount of data that’s now available.

We’re likely to see those managing data put under increasing amounts of pressure to use that data effectively, helping to inform decisions that impact supply chain processes and limit wastage. This data will also be invaluable in determining the real impact of critical supply chain decisions and informing future strategies.

The Emergence of AI
AI is the next big thing in business, and it’s set to transform the way the digital supply chain works. Artificial intelligence is now emerging as a hugely powerful tool, capable of helping businesses to make the right decisions for their supply chains.

As the potential of AI improves, we can expect to see its impact felt more widely throughout global supply chains. Look out for AI being used to inform businesses on changing customer preferences, disruptions in supply chains, increasing costs and other obstacles to product delivery. Artificial intelligence will predict future problems before they occur, giving business owners plenty of time to steer clear of potential pitfalls and keep things moving.

AI will also prove invaluable when it comes to anticipating the purchasing habits of existing customers and establishing the value of new leads and potential purchasers. If used effectively, this information could have a dramatic impact on the success of a wide range of different businesses—particularly those focused on fast-moving consumer goods.

Automation of Supply Chain Tasks

Automation itself isn’t a new idea, but the way it’s being used in digital supply chains is.

In the coming months and years, we’re likely to see automation transform the way supply chains work. The automation of processes will help businesses to cut costs, improve efficiency and eliminate any skills gaps by which they may be affected.

Supply chain tasks are being automated with the help of something called robotic process automation, or RPA. This form of automation is even smarter than traditional automated processes.

Informed by software bots or AI, RPA is a significant step forward in the world of digital supply chains. It’s highly scalable, incredibly effective and, importantly, it’s been proven to be hugely reliable. So, even businesses dedicated to the very highest standards of quality are now beginning to automate processes using RPA.

Climate Change Challenges

Climate change continues to be a hot topic in the news, and supply chains are likely to feel the impact of these concerns.

Consumers’ purchasing habits are increasingly led by environmental considerations. It’s therefore important that companies consider the environmental impact of their supply chain processes and provide visibility on these, for those who have an interest.

It’s expected that issues surrounding sustainability will become ever more critical in the future. Inevitably, supply chains will be impacted. Companies making use of digitalization will be best placed to prepare for the challenges of sustainability, reducing waste and making speedy adjustments to their processes as and when required.

A Shift in Transportation

The digitalization of supply chain processes has given ecommerce companies and online retailers the edge over traditional high street retailers. And this has led to a shift towards online shopping, which shows no sign of waning. As we continue into 2020 and beyond, we can expect to see more and more consumers choosing to shop online, and that’s going to have a knock-on effect on the transportation of goods.

Experts are predicting a transportation crunch, when demand begins to outstrip the availability of transport for online goods. This is likely to lead to a shift in how goods are transported, which could well align with changes to logistics designed to improve sustainability and reduce the carbon footprint of products.

Changes in Trade Agreements

Changes in trade agreements between many of the world’s leading economies are likely to impact supply chains in the future. With Brexit looming and trade issues between the United States and China continuing, it’s important that companies remain aware of how political decisions might affect the way they work.

Digital supply chains provide enhanced flexibility for companies, enabling organizations to quickly adapt to changes that could be outside of their control. So, companies that continue to provide a fast and reliable service despite changing trade agreements could well gain an edge over less efficient competitors as time goes on.

Companies making full use of digitalization will be best placed to make the most of new opportunities, and avoid supply chain disruption as a result of changing trade agreements.

Security Concerns

While businesses are beginning to realize the potential of the data that’s now available to them, consumers too are opening their eyes to the data that they share with the world. And this increased awareness has led to consumers being newly concerned about the data they reveal, and how secure that data is once it’s been shared.

Companies looking to make full use of the digitalization of supply chain processes will be incredibly reliant on data to maximize their efficiency. For this reason, it will be vital that companies establish trust with their existing customers and new prospects.

Security measures should therefore be top of the agenda for forward-thinking businesses. Companies that fall foul of security breaches and data losses are unlikely to be trusted with consumers’ data going forward, and this could have a detrimental impact on the efficiency of their digital supply chains in the future.

Digitalization is sweeping through the supply chains of companies all over the planet, and its potential is mind boggling. The automation of supply chain processes has already transformed the way supply chains are managed, massively increasing the speed and efficiency of a huge number of different companies.

In the future, we’re likely to see further improvements to digital supply chains, as companies begin to make better use of artificial intelligence and robotics. Look out for supply chains managed by AI-powered software and RPA, and get ready for astounding productivity from early adopters of these exciting new technologies.

Derek Rickard, Cimcorp Automation Ltd.
FST Soapbox

Up to Speed: How Automated Order Picking Protects Product Freshness

By Derek Rickard
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Derek Rickard, Cimcorp Automation Ltd.

Today’s food producers and retailers are in a constant race against time. This race starts within the four walls of the distribution center, where products must move from receiving, through storage and dispatch—with high speed and accuracy. While the goal (or finish line) is to get these products to stores as fast as possible and meet consumer expectations, speed of delivery also plays a vital role in ensuring the quality of foods—particularly easily perishable ones like fruits, vegetables, eggs, meats, certain dairy products and baked goods.

Namely, efficient product flow means companies can meet shorter lead times and thereby deliver fresher, safer food—with longer shelf lives—to market. It’s a seemingly easy concept, yet many organizations continue to stumble as a result of ongoing operational challenges that slow distribution down, especially in facilities that continue to utilize manual order picking.

Major challenges include:

  • Continued reliance on physical labor with fulfillment speed highly dependent on the endurance of individual employees.
  • SKU proliferation due to product diversification, where facilities must now store and manage more products than ever before in a seemingly shrinking amount of space.
  • Seasonal spikes in business that require order picking staff to work harder and often longer hours to keep up with the influx of orders.

For organizations struggling to address these challenges and meet the need for speed in distribution, now is an opportune time to look at automation. There are now robotic order picking systems that can store, retrieve and move products effortlessly through a facility, ensuring rapid handling and very short lead times.

By choosing to automate, food producers and retailers can realize numerous benefits, including the following.

1. Accelerated Order Fulfillment

Naturally a robotic system can assemble orders and prepare them for outbound shipping far faster than humanly possible. Thus, an automated distribution center is often up to six times more efficient than a manual one. Notably, there are systems now that integrate order picking and product handling in a single solution, rather than separate functions (as traditionally done but which is too slow for fresh food distribution).

Such a system can perform both buffer storage and order picking in one simultaneous operation for significant time savings. Facilities can thereby prepare orders closer to the time of a truck’s arrival, instead of hours in advance. Foods then spend less time in transport and can maintain their quality and consistency. This also helps to reduce chances of spoilage, which in turn cuts back on waste and the supply chain’s impact on the environment.

2. Improved Ergonomics and Workplace Safety

In distribution centers that rely solely on manual order picking, employees have to run up and down long stretches of aisles and lift heavy crates or boxes. In addition to being inefficient, such manual operations make order picking a strenuous and injury-prone job. The risks for injury have only helped further the labor shortage problem seen nationwide, as job seekers show declining interest in material handling careers.

But when automated systems take over the majority of order picking processes, there is less human involvement—which can help fill in any gaps left by labor shortages. Order fulfillment speed also becomes less dependent on the physical capabilities of employees. Existing staff can then be elevated into new roles in managing and overseeing automated systems. These are safer and far more enriching positions that can draw a whole new pool of technical talent.

3. Better Space Utilization

As mentioned, there is a growing trend towards product diversification, where companies are now offering more options to consumers, such as additional sizes, flavors and health-conscious choices. As a result, the number of SKUs in most distribution centers is exploding. Some facilities once designed to house a few hundred SKUs are now dealing with thousands, leaving little room to spare.

Those challenged by SKU proliferation can consider an overhead robotic system that uses high-density, floor-based storage, where goods are stacked on the warehouse floor. This eliminates the need for racking or traveling around aisles. Plus, it reduces the number of movements required to pick an order. Facilities can store more products within their existing space, offsetting the costs of possible new construction. An overhead robotic system can also clear all products from the warehouse floor for easy, hygienic cleaning.

4. Flexibility to Keep Up During Seasonal Peaks

In all consumer goods industries, there are times of the year when demand spikes and orders come pouring in. For the food industry, companies tend to see spikes during the holiday season and in the summer months—times when people commonly host get-togethers.

Seasonal peaks can take a heavy toll on manual warehouse operations. Some try to hire temporary employees to get by, but that comes with challenges in providing proper training in a short span of time. But automated systems—particularly those with a modular design—are flexible and scalable, enabling facilities to adjust their number of robots to meet fluctuations in order volume—during seasonal highs and lows.

A notable example of a food company that is successfully leveraging automation is grocery leader Kroger. Namely, Kroger wanted to develop a state-of-the-art, automated plant and distribution center to achieve many of the benefits discussed above, including ensuring product quality and reducing employee risks of injury.

Built in Denver, Colorado, Kroger’s “Mountain View Foods” facility processes fresh conventional and organic milk, and packages aseptically processed milk, creams and juices. Within Mountain View Foods, Kroger has installed an end-to-end automated system that can store up to 36,000 crates and pick 32,000 crates per day. Cases are picked according to specified sequences on one end of the facility and then palletized for truck loading at the other, with significant storage buffering in between.

Cimcorp, Kroger, Automation
Having installed an end-to-end automated system, Kroger benefits from orders picked with 100-percent accuracy, at faster speeds, which results in shorter lead times and optimal product freshness for shoppers. Image courtesy of Cimcorp.

A warehouse control system (WCS) controls all robotic movements and serves as the brains behind the automation. The software also collects data on each processed order, giving Kroger traceable information to meet food safety requirements. Kroger benefits from orders picked with 100-percent accuracy, at faster speeds, which results in shorter lead times and optimal product freshness for shoppers.

Kroger’s story demonstrates the power of automation in enabling more streamlined order fulfillment. Those that choose to automate can overcome the many challenges that inhibit efficient product flow and thereby bolster their supply chain velocity. Simply put, faster fulfillment means fresher products in stores. And, fresher products are safer products for consumers to enjoy.

Paperstack

Taking Your Operations Digital? Bring in the Stakeholders Early

By Maria Fontanazza
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Paperstack

Going digital is a hot topic in the food industry, but making the investment can be a tough choice for organizations. Jeremy Schneider, business development director, food safety and quality assurance at Controlant, reviews some of the factors that food companies should consider when making the decision, along with the value that digital technologies can bring from the perspective of ROI and improving food safety culture.

Food Safety Tech: For businesses that have been historically paper-driven, where do they start on the technology adoption journey?

Jeremy Schneider, Controlant
Jeremy Schneider, business development director, food safety and quality assurance at Controlant

Schneider: There are a number of questions that firms, both small and large, should consider when deciding to move to a paperless operation. Have you considered what moving away from a paper-based system would mean for your enterprise? What are the perceived challenges to making this move? Or perhaps, what are the risks of not moving to digital? How would utilizing systems provide your organization with the ability to access data in transformative ways?

For organizations that are making the transition from paper documentation to digital, it is critical to develop a roadmap with tangible milestones and objectives. Although there are a variety of reasons to make the switch to digital, what is most important for your organization will determine what those are, as they will play a critical role in developing a roadmap of priorities. We often find that organizations identify a ‘’pain-point’’ in their current process, and this is a leading driver to wanting to make a change in their process. Perhaps this is the inability to easily access information in a timely manner, or the challenges with making sense of the data that you are currently collecting. Whatever your challenges may be, begin by developing a plan, and prioritize this, as it will provide you with early positive results that will keep you working towards the goal. As you experience these early benefits from going digital, you will begin to see the value that this will bring your organization at scale.

One significant issue that many organizations face when beginning this journey is not bringing the appropriate stakeholders into a program early enough. It is critical for the success of new supply chain programs to make sure you bring in members of purchasing, logistics, quality, finance, IT, and others as early as possible so that any questions or concerns are properly vetted early in the process. In addition to this, getting buy-in from these teams at the earliest phase of a project will allow others to vet the system in their own way, potentially helping them solve challenges they have been

FST: Talk about measuring the success of a technology: How do the metrics translate into ROI?

Schneider: A question that is often raised is how to measure the success of the technology. Simply put, does the program make your life easier and solve the problem you set out to, or not? Does it meet the concise objectives that you outlined in the beginning of the process, or does it fall short in some way? If your answer to any of these questions is yes, and it does meet the objectives, then you are well on your way to defining success of your program.

Read Food Safety Tech’s previous discussion with Schneider, Using Technology for Traceability Adds Dimension to Supply Chain, Promises ROIIt is critical that programs are able to show their value through their return on investment, but how do you measure this? If you have recently implemented a real-time supply chain temperature monitoring program, for instance, you may want to consider metrics such as reduced loss, spoilage, shortages, or restaurant-level outages as metrics of success. Or perhaps you would want to translate this into a dollar figure. For instance, in the previous year, your organization counted 10 rejected shipments due to suspected temperature abuse, at a loss of $500,000. In the year following your implementation, your new system was able to help the organization intervene and minimize that loss to just one rejected shipment at a cost of $50,000, thus leading to a reduced loss rate of $450,000.

In collaboration with other stakeholders in your organization, you may be able to identify additional metrics, such as reduced freight rates from optimized shipping lanes, reduced insurance premiums from reduced losses, or reduced quantities of on-hand inventories as you are able to truly manage a just-in-time supply chain. If your organization actively measures your Cost to Serve, savings within your supply chain would likely be an important data point to consider.
Beyond the identifiable money savings, consider some of the soft ROI attributes, such as enhanced collaboration with supply chain and supplier partners, improved customer loyalty, brand protection generally, and sustainability initiatives. Does your organization have goals to reduce food waste? If so, perhaps waste minimization is an important attribute to measure. When evaluated holistically, significant savings can be realized.

FST: How does technology facilitate a more effective food safety culture?

Schneider: Building an effective food safety culture is a process that requires commitment from every level of your organization. The ways that we promote food safety culture within each organization differs, from rewarding team members when they identify an unsafe practice, to actively promoting food safety throughout the organization, to encouraging quality assurance teams to identify state-of-the-art technologies and implementing them to improve the systems, programs, and processes throughout the company.

As food safety professionals, our toolboxes are filled with a variety of tools for the job, and technology as a tool is no exception. Technology should enable our organizations to be more efficient, allowing them to focus their attention on high-priority projects while minimizing work that can be automated. An example of this is setting parameters to allow organizations to work based on exception instead of requiring a review of all documentation.

As we enter the New Era of Smarter Food Safety, and the tenants of it being people-led, technology-enabled, and FSMA-based, we have a mandate to try new technologies to help solve previously unsolvable supply chain challenges. Organizations are actively pursuing real-time supply chain temperature monitoring as a way to provide insights into their cold chain and allowing them to move from reaction to a position of prevention.

Organizations are finding that investments in food safety technologies pay dividends in customer commitment over the long term. It is no longer acceptable to only meet regulatory standards. It is now an expectation that companies do anything possible within their power to assure customer safety and, per the FDA’s new mandate, to help create a more digital, traceable, and safer food system.

Allison Kopf, Artemis

How Technologies for Cultivation Management Help Growers Avoid Food Safety Issues

By Maria Fontanazza
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Allison Kopf, Artemis

Visibility, accountability and traceability are paramount in the agriculture industry, says Allison Kopf, founder and CEO of Artemis. In a Q&A with Food Safety Tech, Kopf explains how growers can take advantage of cultivation management platforms to better arm them with the tools they need to help prevent food safety issues within their operations and maintain compliance.

Food Safety Tech: What are the key challenges and risks that growers face in managing their operations?

Allison Kopf: One of the easiest challenges for growers to overcome is how they collect and utilize data. I’ve spent my entire career in agriculture, and it’s been painful to watch operations track all of their farm data on clipboards and spreadsheets. By not digitizing processes, growers become bogged down by the process of logging information and sifting through old notebooks for usable insights—if they even choose to do that.

Allison Kopf, Artemis
Allison Kopf is the founder and CEO of Artemis, a cultivation management platform serving the fruit, vegetable, floriculture, cannabis, and hemp industries. She is also is an investment partner at XFactor Ventures and serves on the boards of Cornell University’s Controlled Environment Agriculture program and Santa Clara University’s College of Arts and Sciences.

I was visiting a farm the other day and the grower pulled out a big binder. The binder contained all of his standard operating procedures and growing specifications for the varieties he’s grown over the past 20 years. Then he pulled out a pile of black notebooks. If you’ve ever worked on a farm, you’d recognize grower notebooks anywhere. They’re used to log data points such as yield, quality and notes on production. These notebooks sit in filing cabinets with the hopeful promise of becoming useful at some point in the future—to stop production from falling into the same pitfalls or to mirror successful outcomes. However, in reality, the notebooks never see the light of day again. The grower talked about the pain of this process—when he goes on vacation, no one can fill his shoes; when he retires, so does the information in his head; when auditors come in, they’ll have to duplicate work to create proper documentation; and worse, it’s impossible to determine what resources are needed proactively based on anything other than gut. Here’s the bigger issue: All of the solutions are there; they’re just filed away in notebooks sitting in the filing cabinet.

Labor is the number one expense for commercial growing operations. Unless you’re a data analyst and don’t have the full-time responsibilities of managing a complex growing operation, spreadsheets and notebooks won’t give you the details needed to figure out when and where you’re over- or under-staffing. Guessing labor needs day-to-day is horribly inefficient and expensive.

Another challenge is managing food safety and compliance. Food contamination remains a huge issue within the agriculture industry. E. coli, Listeria and other outbreaks (usually linked to leafy greens, berries and other specialty crops) happen regularly. If crops are not tracked, it can take months to follow the contamination up the chain to its source. Once identified, growers might have to destroy entire batches of crops rather than the specific culprit if they don’t have appropriate tracking methods in place. This is a time-consuming and expensive waste.

Existing solutions that growers use like ERPs are great for tracking payroll, billing, inventory, logistics, etc., but the downside is that they’re expensive, difficult to implement, and most importantly aren’t specific to the agriculture industry. The result is that growers can manage some data digitally, but not everything, and certainly not in one place. This is where a cultivation management platform (CMP) comes into play.

FST: How are technologies helping address these issues?

Kopf: More and more solutions are coming online to enable commercial growers to detect, prevent and trace food safety issues, and stay compliant with regulations. The key is making sure growers are not just tracking data but also ensuring the data becomes accessible and functional. A CMP can offer growers what ERPs and other farm management software can’t: Detailed and complete visibility of operations, labor accountability and crop traceability.

A CMP enables better product safety by keeping crop data easily traceable across the supply chain. Rather than having to destroy entire batches in the event of contamination, growers can simply trace it to the source and pinpoint the problem. A CMP greatly decreases the time it takes to log food safety data, which also helps growers’ bottom line.

CMPs also help growers manage regulatory compliance. This is true within the food industry as well as the cannabis industry. Regulations surrounding legal pesticides are changing all the time. It’s difficult keeping up with constantly shifting regulatory environment. In cannabis this is especially true. By keeping crops easily traceable, growers can seamlessly manage standard operating procedures across the operation (GAP, HACCP, SQF, FSMA, etc.) and streamline audits of all their permits, licenses, records and logs, which can be digitized and organized in one place.

FST: Where is the future headed regarding the use of technology that generates actionable data for growers? How is this changing the game in sustainability?

Kopf: Technology such as artificial intelligence and the internet of things are changing just about every industry. This is true of agriculture as well. Some of these changes are already happening: Farmers use autonomous tractors, drones to monitor crops, and AI to optimize water usage.

As the agriculture industry becomes more connected, the more growers will be able to access meaningful and actionable information. Plugging into this data will be the key for growers who want to stay profitable. These technologies will give them up-to-the-second information about the health of their crops, but will also drive their pest, labor, and risk & compliance management strategies, all of which affect food safety.

When growers optimize their operations and production for profitability, naturally they are able to optimize for sustainability as well. More gain from fewer resources. It costs its customers less money, time and hassle to run their farms and it costs the planet less of its resources.

Technology innovation, including CMPs, enable cultivation that will provide food for a growing population despite decreasing resources. Technology that works both with outdoor and greenhouse growing operations will help fight food scarcity by keeping crops growing in areas where they might not be able to grow naturally. It also keeps production efficient, driving productivity as higher yields will be necessary.

Beyond scarcity, traceability capabilities enforce food security which is arguable the largest public health concern across the agricultural supply chain. More than 3,000 people die every year due to foodborne illness. By making a safer, traceable supply chain, new technology that enables growers to leverage their data will protect human life.

Gears

Three Practices for Supply Chain Management in the Food Industry

By Kevin Hill
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Gears

While building an effective logistics strategy, the end goal of supply chain management (SCM) needs to be kept in mind (i.e., allowing each member of the supply chain to achieve efficient inventory management as well as reach its customer service goals). To this end, it’s important to share information that will help each member achieve success. This includes data relating to demand forecasts, anticipated lead times and safety stock quantities. Let’s look at SCM best practices for food manufacturing and supply, and how this information plays a role.

Effective SCM: Best Practices for the Food Industry

Here’s an overview of SCM best practices in food supply and manufacturing:

Learn more about managing your supply chain at the Best Practices in Food Safety Supply Chain conference | June 5–6, 2017 | LEARN MOREDemand Forecasts. This is generally based on demand, sales or usage patterns in the past. However, future demand can be affected by changing situations such as:

  • Gaining/losing customers
  • Increased/decreased product popularity
  • Introduction of new products
  • Short-term increase in demand through promotions, etc.

Better estimates can be achieved with an effective derived demand or a CPFR (collaborative planning, forecasting and replenishment) system. This can be done through automated data collection, or by the following process:

  • Identifying customers who can predict future demand (i.e., what they may use or sell in the future)
  • Collecting demand forecasts about specific products from them
  • Comparing these forecasts against their actual purchases on a monthly basis
  • Helping them improve future predictions by sharing this data with them

Customers may overestimate demand, but you might consider offering a discount based on accurate forecasts to encourage better results. In addition, you should also consider these five elements:

  • Usage patterns in the past, not including CPFR data
  • Increasing/decreasing product popularity trends
  • Higher/lower seasonal usage or demand
  • Events/promotions in the near future
  • Market and industry data from sources such as management, sales, etc.
Michael Link, AFN Logistics
Retail Food Safety Forum

Supply Chain Logistics: 4 Reasons You Need a Retail Strategy

By Michael Link
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Michael Link, AFN Logistics

Attend the Food Safety Supply Chain Conference, June 5–6, 2017 in Rockville, MD | LEARN MORERetailers demand peak supply chain performance, and suppliers who fail to provide on-time, accurate deliveries face costly penalties. Further to peak performance, retailers also require a high level of supply chain visibility and transparency to ensure the quality and safety of the food they’re selling. The many moving parts of the supply network require a fine-tuned logistical approach, and a big piece of this is having a retail strategy that optimizes and consolidates your food shipments. This helps suppliers in a myriad of ways, which we’ll delve into here.

Before we do that, let’s set the stage a bit: Compliance programs are the norm within today’s retail supply chain. These programs outline appointment times and delivery standards to ensure quality of goods—among other things—along with the penalties for not meeting the terms. Retailers’ compliance programs vary, but the theme is consistent: Non-compliance results in major costs that add up over time and cause the risk of loss of business.

To gain a competitive advantage, shippers are focusing more on retail consolidation programs that optimize and consolidate shipments while focusing on customer service to help shippers get ahead. These programs can provide complete visibility, enhance control, capture critical business intelligence, create efficiencies, decrease costs, reduce mileage, improve speed to market, and decrease over, short and damage (OS&D) claims—among other benefits.

Let’s take a closer look at some of these:

1. Enhanced Inventory Management

Inventory control is critical in the retail sector. Retailers try to keep their inventories low and have just-in-time deliveries from vendors. This helps to ensure goods are delivered and sold at the highest quality, which, for certain foods like fresh produce or refrigerated items, can often have a narrow window of freshness. At the same time, retailers want to make sure the product they need is going to be available. This is especially the case when seasonal demand for certain food items ebbs-and-flows, such as during the holidays.

As part of a retail optimization program, supply chain service providers can help retailers and suppliers manage inventory by analyzing data and making proactive, rather than reactive, inventory and transportation decisions.

2. Reduced Transit Times

The growth of the omni-channel sector—including in the grocery business—means customers want and expect things at the click of a button, and lead time has a major impact on the cost, quality control and continuity of ordering patterns. In fact, a recent report from Internet Retailer, 2016 Online Food Report, details how the online grocery sector is suddenly a booming market, and is expected to grow by 157% to $42.1 billion this year alone, according to Morgan Stanley.

Proactive communication and continual analysis of transit time data can help suppliers plan and execute an effective transportation strategy as the omni-channel food retail market continues to tick up. Namely, by combining potentially inefficient partial loads into fully utilized truckloads, suppliers can achieve shorter, more predictable transit times. With proper pre-planning, loads can be consolidated, which then allows zone skipping and more direct transportation routes. Zone skipping also reduces the number of times freight is handled, which reduces the risk of damage and errors.

3. Network Optimization

A comprehensive network analysis and optimization effort can drive significant reductions in landed costs while maintaining, or even improving, transit times by considering production, warehousing and inventory needs in addition to transportation. Warehouse location is a critical decision; however, growth projections and potential new markets must be included in forward planning to ensure that today’s appropriate solution does not become tomorrow’s barrier to scalability.

The decision to work with a single national warehouse provider or multiple regional warehouse providers is driven not solely by cost, but also by the consideration of utilizing a single or multiple warehouse management systems. This analysis complements a mode optimization effort, allowing shippers to control costs, ensure product safety and quality and enhance service through the optimum blend of intermodal, truckload and LTL services.

4. Better Visibility and Collaboration

Supply chain performance is critical to controlling costs, improving service, and when it comes to the food supply chain, ensuring quality of perishable goods. According to a survey by ECR McKinsey, successful collaboration on average resulted in a 4.4% decrease in out-of-stocks and a cost reduction of 5.4%.

Collaboration can begin early in the supply chain. Shippers’ supply chain providers can provide an analysis of the entire supply chain and break down the invisible barriers that exist between different divisions within a supplier. Often, suppliers don’t realize they are operating in silos, are unaware of what others within the business may be doing and are unaware of the implications of those actions. They can also become so focused on meeting their immediate goals, they lose sight of the big picture.

Early planning also helps providers offer a custom solution. For food service companies with multiple distribution facilities, retail consolidation becomes an important piece in the supply chain strategy and a critical method for improving profitability.

Implementing an Effective Retail Optimization Program

There are several elements of an effective retail optimization program, including:

  • Increased visibility
  • Network optimization
  • Mode optimization
  • Consolidation
  • Pool pointing

The right retail consolidation programs allow the entire supply network to comply with retailers’ requirements while also increasing visibility, reliability and quality of product. Overall, this creates value for the shipper and their end-customers through improved service. It’s a win-win situation for all parties involved.