Food Logistics July 2015

Food Logistics

SPECIAL EDITION

SOFTWARE & TECHNOLOGY

®

Issue No. 168 July 2015

Global Supply Chain Solutions for the Food and Beverage Industry

Terra Technology’s CEO Robert F. Byrne and other pioneers are enlightening the industry to new possibilities

TRANSFORMING THE SUPPLY CHAIN

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WEB EXCLUSIVES Guest Blog: A Three-Year Payback On An Automation Installation?

Propane Autogas Mitigates Maintenance Concerns For Sausage Delivery Fleet Archived Webinars, Including FL’s Educational Webinar Series WWW.FOODLOGISTICS.COM

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INTRODUCING THE NEW FORD TRANSIT

THE MOST VEHICLE CONFIGURATIONS IIN N IITS T S CLASS. C L A S S*.

OPEN FOR 6'5" TALL BUSINESS OVER

**

A WIDE VARIETY

With an available cargo ceiling taller than some basketball players, the Transit van has loads of room for boxes, tools 6'5" and you. That comes in handy if you want a mobile workshop that lets you stand up straight. And the advantages just keep piling up.

OF DIMENSIONS The Transit van and wagon are available in 2 different wheelbases, 3 different lengths and 3 different heights. That makes it easy to choose one that will fit you and your business exactly. And if that’s not enough, it’s also available as a chassis cab and cutaway.

THE NEW

2015 TRANSIT •

The Transit van is available with the best-in-class maximum rear cargo door opening height. The doors open a full 237° and the floor is as low as 28 inches.** It’s all about making loading and unloading easier. No matter what your business is.

THE NUMBERS DON’T LIE

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* sed *B *Ba s on bodyy typ y e, e bod bodyy length, l , an and whee e lba lb se s and roof hei eiight ht. Clas asss is Full ull-Si -Size ze Van Vans. s. **W When h pr p ope o rly eq equip uipped p . ped † Claass is Fulll-S -Size -S ize ze Vaans, wh when en proope perly per lyy equ eq ipp ip ed. Ex Excluudes di d eseel comp comp ompeti etitititiv tivee mode tiv dels. ls. s s.

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The 2015 Transit can offer a best-in-class gas-powered maximum CARGO CAPACITY OF 487.3 CUBIC FEET.†

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ON THE MENU JULY 2015 • ISSU E N O . 168

SPECIAL EDITION | SOFTWARE & TECHNOLOGY

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SOFTWARE & TECHNOLOGY

Innovative Technology Can Empower Your Supply Chain

Increased market place pressures means applying technology to the challenges is more important than ever. By Elliot Maras

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In Pursuit Of The Commerce-Ready Enterprise

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How Enterprise-Wide Software Tools Integrate The Food Supply Chain

Why inventory optimization and transportation management systems lead the list of tools. By Elliot Maras

Cloud-based tools, real-time data visualization and mobile apps create a new playing field for the food supply chain. By Elliot Maras

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Distribution Warehouse Technology Marches Forward

Food and beverage warehouses find use for mobile computing, data visualization, automated equipment and more. By Elliot Maras

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How Is Software & Technology Impacting The Food & Beverage Supply Chain?

Industry executives weigh in on the hottest solutions and strategies.

By Lara L. Sowinski

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COLUMNS

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FOR STARTERS

The Future Of Food Logistics Has Arrived

Futuristic concepts like driverless trucks and smart refrigerators are now a reality.

By Lara L. Sowinski

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FOOD (AND MORE) FOR THOUGHT

Food + Bits + Blocks

The Bitcoin block chain creates a faster, more efficient supply chain.

By Joe Gerber and Reid Williams

DEPARTMENTS

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8 Supply Scan

11 Food on the Move

Published and copyrighted 2015 by AC Business Media Inc. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording or any information storage or retrieval system, without written permission from the publisher.

Food Logistics (USPS 015-667; ISSN 1094-7450 print; ISSN 1930-7527 online) is published ten times per year in Jan/Feb, March, April, May, June, July, August, September, October and Nov/Dec

by AC Business Media Inc., 201 N. Main Street, Fort Atkinson, WI 53538. Periodicals postage paid at Fort Atkinson, WI 53538 and additional mailing offices.

POSTMASTER: Send address changes to Food Logistics, PO Box 3605 Northbrook, IL 60065-3605. Canada Post PM40612608. Return Undeliverable Canadian Addresses to: Food Logistics, Station A, P. O. Box 25542, London, ON N6C 6B2. Subscriptions: US, one year $45, two years $85; Canada & Mexico, one year $65, two years $120; International, one year $95, two years $180. All subscriptions must be paid in U.S. funds, drawn on U.S. bank. Printed in the USA.

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WHY BEST-IN-CLASS FOOD & BEVERAGE SUPPLY CHAINS USE LeanTMS® How do the top food and beverage companies improve their supply chains?

With LeanTMS®. LeanTMS not only meets the sophisticated demands of retailers and club store customers — its SaaS platform also delivers enhanced visibility, actionable intelligence and collaborative opportunities. With LeanTMS, you’ll centralize control, optimize loads and lanes, reduce empty miles, and continuously improve your supply chain based on network KPIs. That translates to lower costs and greater value to you and your customers.

Don’t just manage transportation ... build a better supply chain.

866.584.7280 | leanlogistics.com

Building Better Supply Chains Together

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FOR STARTERS FROM THE EDITOR’S DESK

WWW.FOODLOGISTICS.COM

The Future Of Food Logistics Has Arrived

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oftware and technology continues to push the limits of what’s possible seemingly every day. The supply chain is one place where this is especially evident.

Think about some of the innovations that could potentially alter the food supply chain for both consumers and industry in the near future, starting with driverless trucks.

SOWINSKI In May, Freightliner tested its Inspiration commercial big rig on a Nevada highway. The truck uses GPS, radar and video cameras to achieve Level 3 autonomy, meaning the truck can drive itself when conditions are right. It requires a driver to be seated at the wheel to resume control if necessary. Operating the Inspiration in so-called Highway Pilot mode is similar to an autopilot system in an aircraft.

This technology offers multiple benefits. By allowing the driver to attend to other duties like scheduling drop-offs and pick-ups and other business, multi-tasking behavior is mitigated and safety is enhanced. Likewise, fuel economy can be dramatically improved with self-driving trucks.

Platooning, which is sometimes referred to as “road trains,” is boosted with Highway Pilot because the system is designed to maintain a safe following distance behind other vehicles and reduce passing. The system can use vehicle-to-vehicle communication technology to essentially lock on to the truck ahead to reduce the gap between the two vehicles to about 25 feet. This “sweet spot” is where the advantages of aerodynamics are realized the most. A tight formation like this allows a three- to five-truck platoon to operate 5 to 6 percent more efficiently compared to driving solo.

Better fuel efficiency, reduced emissions, less wear and tear on the vehicle—sounds like a big win.

At the same time, there are a handful of other exciting innovations related to the food supply chain. Internet-enabled smart refrigerators will tell people how much milk is left in the carton and add it to the shopping list. Shoppers wearing Google glasses in the grocery store get in-depth product info, including calorie and ingredients information, pay for their groceries electronically, and are on their way. Transportation and logistics operations are reaching new thresholds in productivity, visibility, collaboration, efficiency and safety with telematics, software solutions and technology tools, while precision farming in the agricultural sector is also paying huge dividends.

The secondary benefits with these innovations are profound. They include a reduction in food waste, better environmental stewardship and management of natural resources, and increased food safety and security to name a few.

Enjoy the read.

LARA L. SOWINSKI, EDITOR-IN-CHIEF LSOWINSKI@ACBUSINESSMEDIA.COM

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Published by AC Business Media Inc.

201 N. Main Street, Fort Atkinson, WI 53538 (800) 538-5544 • www.ACBusinessMedia.com PRINT AND DIGITAL STAFF Publisher Jolene Gulley Editor-in-Chief Lara L. Sowinski lsowinski@ACBusinessMedia.com Managing Editor Elliot Maras emaras@ACBusinessMedia.com Assistant Editor Eric Sacharski esacharski@ACBusinessMedia.com Ad Production Manager Cindy Rusch crusch@ACBusinessMedia.com Creative Director Kirsten Crock Senior Audience Development Manager Wendy Chady Audience Development Manager Tammy Steller ADVERTISING SALES (800) 538-5544 East Coast Sales Manager Judy Welp (480) 821-1093 jwelp@ACBusinessMedia.com Midwest/West Sales Manager Carrie Konopacki (920) 542-1236; Fax: (920) 542-1133 201 N. Main Street, Fort Atkinson, WI 53538 ckonopacki@ACBusinessMedia.com National Automotive Sales Tom Lutzke (630) 484-8040; tlutzke@ACBusinessMedia.com EDITORIAL ADVISORY BOARD Smitha G. Stansbury, partner, FDA & Life Sciences Practice, King & Spalding Raymond J. Segat, director, cargo & business development, Vancouver Airport Authority Dr. Barbara Rasco, professor and interim director, School of Food Science, Washington State University Adriano Melluzo, vice president, national sales, Ryder CIRCULATION & SUBSCRIPTIONS PO Box 3605, Northbrook, IL 60065-3605 (877) 201-3915, Fax: (800) 543-5055 Email: circ.FoodLogistics@omeda.com LIST RENTAL Elizabeth Jackson, Merit Direct LLC (847) 492-1350, ext. 18, Fax: (847) 492-0085 Email: ejackson@meritdirect.com REPRINT SERVICES Carrie Konopacki (920) 542-1236; Fax: (920) 542-1133 ckonopacki@ACBusinessMedia.com AC BUSINESS MEDIA INC. Chairman Anil Narang President and CEO Carl Wistreich Executive Vice President Kris Flitcroft CFO JoAnn Breuchel VP Content Greg Udelhofen VP Marketing Debbie George Digital Operations Manager Nick Raether Digital Sales Manager Monique Terrazas

Published and copyrighted 2015 by AC Business Media Inc. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording or any information storage or retrieval system, without written permission from the publisher.

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SUPPLY SCAN

D A I LY U P D AT E S AT WWW.FOODLOGISTICS.COM

NE WS FROM ACROSS THE F O O D SU PPLY C H AIN

Sysco Scraps Plan To Merge With US Foods Sysco Corp. has terminated its merger agreement with US Foods after the U.S. District Court in Washington, D.C., granted the Federal Trade Commission’s request for a preliminary injunction to block the proposed Sysco-US Foods merger.

This action also terminates an agreement with Performance Food Group (PFG) to purchase US Foods facilities in 11 markets.

Under terms of the merger agreement, the termination of the transaction requires Sysco to pay break-up fees of $300 million to US Foods and $12.5 million to PFG.

Supermarket Giants Delhaize And Royal Ahold To Merge Dutch-owned Delhaize Group – which owns the Food Lion and Hannaford supermarkets in the U.S. – and Belgium-owned Royal Ahold N.V. – which owns Giant Carlisle, Giant Landover, Stop & Shop New England, Stop & Shop New York Metro and Peapod – have entered into an agreement to merge. The combined company will be named Ahold Delhaize.

tion finalized its determination that partially hydrogenated oils (PHOs), the primary dietary source of artificial trans fat in processed foods, are not “generally recognized as safe” for use in human food. Food manufacturers will have three years to remove PHOs from products.

Kraft Shareholders Approve Merger With Heinz Kraft Foods Group, Inc. shareholders voted to approve the previously-announced merger agreement providing for the creation of The Kraft Heinz Co. In a preliminary count of the voting results, more than 98 percent of votes cast at the special

meeting voted in favor of the transaction, representing more than 69 percent of all outstanding Kraft shares. The transaction will create the third-largest food and beverage company in North America, and the fifth-largest food and beverage company in the world. “This truly is a historic moment for our two companies as we combine to become a global food and beverage leader with an unparalleled portfolio of great brands,” said John T. Cahill, Kraft Foods group chairman and CEO and future vice chairman of The Kraft Heinz Co.

U.S. DAIRY IMPORTS AND EXPORTS U.S. imports of dairy products are way up in 2015 compared with January through April of 2014.

In fact, U.S. imports of dairy have already increased 15 percent this year. Most of the increase in dairy is due to an influx in demand for international cheeses and evaporated milk products.

Cheese imports are up 5 percent this year and evaporated milk increased 25 percent.

Unfortunately, U.S. exports of dairy are singing a different tune…or churning a different butter. Dairy exports have dropped from last year by 32 percent, or nearly half a billion dollars. A major decline in evaporated milk products make up the brunt of the decrease, but cheese, milk and butter exports are also way down.

All data provided by Zepol. Visit zepol.com for a Free Trial

Food Chain Workers Alliance Slams Walmart’s Supply Chain Practices A coalition of organizations called the Food Chain Workers Alliance (FCWA) recently released a report that it claims assesses the “labor conditions of workers in Walmart’s food supply chain as well as the company’s environmental impact worldwide,” according to 24/7 Wall Street, an investor news service. The report also noted: “So far, Walmart’s commitments to improving standards appear to be mostly a public relations stunt and haven’t translated to improvements in conditions for most of its food supply chain. Walmart now has an opportunity to wield its power to the benefit of workers, farmers, communities, and the environment.”

FDA Seeks To Remove Artificial Trans Fats In Processed Foods The U.S. Food and Drug Administra8

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Source: Zepol, www.zepol.com www.foodlogistics.com

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Yes, It’s Powerful!

So Reliable, So Proven, It’s Almost Frightening.

WHEN RELIABILITY COUNTS

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SUPPLY SCAN

D A I LY U P D AT E S AT WWW.FOODLOGISTICS.COM

NEWS FROM A CROS S THE F O O D SU PPLY C H AIN

House Votes To Repeal Country Of Origin Labeling For Meat The U.S. House of Representatives voted to repeal meat labeling laws, which were widely backed by U.S. consumer groups, after Canada and Mexico threatened $3 billion in trade sanctions, according to Reuters. The House voted 300-131 to repeal country-oforigin labeling (COOL) rules on beef, pork and poultry, after the World Trade Organization ruled they discriminated against imported meat. The Senate must still approve the repeal.

DOT Grants Agriculture 2-Year Waiver From Hours Of Service Rule America’s hog, cattle and poultry farmers have been granted a 2-year waiver from the U.S. Department of Transportation (DOT) hours-of-service rule for certain driv-

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ers, according to reports. The rule, issued in mid-2013 by DOT’s Federal Motor Carrier Safety Administration (FMCSA), requires truck drivers to take a 30-minute rest break for every eight hours of service. It would have prohibited drivers hauling livestock and poultry from caring for animals during the rest period.

The National Pork Producers Council, on behalf of other livestock, poultry and food organizations, in 2013 petitioned the FMCSA for a waiver and exemption from complying with the regulation.

Senate Passes Trade Bill The U.S. Senate voted 60-37 to advance President Obama’s bid for “fast track” negotiating authority, brightening hopes for a 12-nation Pacific-rim trade agree-

ment, a keystone of his effort to expand U.S. influence in Asia. That was the minimum number President Obama and of votes needed on House Minority Leader the procedural ques- Nancy Pelosi leave a tion. The president meeting with House Democrats on Capitol also wants to conHill to discuss global tinue a retraining trade talks. program for workers displaced by international trade. House and Senate support appears adequate, but even if that measure stumbles, the long-coveted fast track bill will be on Obama’s desk.

“This is a very important day for our country,” Senate Majority Leader Mitch McConnell, R-Ky., said. In the strangebedfellows politics of trade, he was among the Republican congressional leaders vital in pushing the agenda forward, with only modest help from Democrats.

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FOOD ON THE MOVE LOGISTICS TRENDS IN OUR INDUSTRY

EPA, DOT Propose Greenhouse Gas And Fuel Efficiency Standards For Heavy-Duty Trucks The U.S. Environmental Protection Agency (EPA) and the Department of Transportation’s National Highway Traffic Safety Administration (NHTSA) are jointly proposing standards for medium- and heavy-duty vehicles that would improve fuel efficiency and cut carbon pollution to reduce the impacts of climate change while bolstering energy security and spurring manufacturing innovation.

The proposed standards are expected to lower CO2 emissions by approximately 1 billion metric tons, cut fuel costs by about $170 billion, and reduce oil consumption by up to 1.8 billion barrels over the lifetime of the vehicles sold under the program. These reductions are nearly equal to the greenhouse gas emissions associated with energy

EPA Plans Emissions Cuts For Airplanes And Trucks

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he Obama administration is planning a series of actions this summer to rein in greenhouse-gas emissions from wide swaths of the economy, including trucks, airplanes and power plants, kicking into high gear an ambitious climate agenda that the president sees as key to his legacy, according to news reports. The Environmental Protection Agency is expected to announce plans to regulate carbon emissions from airlines, and soon after that, draft rules to cut carbon emissions from big trucks, according to people familiar with the proposals. The EPA is also expected to unveil rules aimed at reducing emissions of methane—a potent greenhouse gas—from oil and natural-gas operations.

use by all U.S. residences in one year. The total oil savings under the program would be greater than a year’s worth of U.S. imports from the Organization of the Petroleum Exporting Countries (OPEC).

ing a freight-hauling crunch for industries that use them, according to The Wall Street Journal. The number of boxcars in service in North America fell by 41 percent in the past decade to slightly less than 125,000 last year as 101,600 cars were scrapped and only about 13,800 replacement were added. That downsizing accelerated a decades-long shift by railroads to more specialized railcars and intermodal carriers that allow shipping containers to hop from trucks to trains.

Railroads Retire Boxcars, Creating Shortage A shrinking supply of boxcars—once the ubiquitous symbols of U.S. railroads and a rolling bellwether for the economy—is caus-

DAT SOLUTIONS’ MONTHLY FREIGHT REPORT

Reefer Markets: Texas On Top

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hile the total number of produce loads leaving California is still likely the highest of any U.S. state, Texas is now the No. 1 state for refrigerated (“reefer”) freight volume on DAT Load Boards, surpassing California by a wide margin. This is a first.

There are three reasons for this shift in spot-market freight. ① Texas is producing more fruit and vegetables, especially in the Rio Grande Valley, and the cattle and meat-packing industries in the western part of the state add to the demand for refrigerated equipment. ② There has been a huge increase in imports from Mexico, including agricultural products. Upgraded highways and bridges in Mexico make Texas border towns like El Paso and Laredo more accessible than Nogales, Ariz., the previous volume leader, and the route from Texas to Midwest and East Coast markets is significantly shorter than from Arizona or California. As a result, demand for available reefer trucks is sizzling along the border. ③ Drought and changing water allocation in California has led to steady declines in produce volume. The current drought is expected to incur direct costs of $1.8 billion in 2015, according www.foodlogistics.com

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By Mark Montague to a report by the Center for Watershed Sciences at UC Davis.

That’s about 4 percent of California’s $45 billion in annual revenue from agriculture, and spot market transportation is likely to bear the brunt of that reduction.

VAN MARKET AFFECTED When a reefer market is as hot as Texas is today, spot rates rise for vans, too. Van demand is well above average in Laredo, Lubbock, and Amarillo due to imports, cotton traffic, and nonperishable produce such as melons going a short distance.

Recently, there has been intense pressure on capacity throughout the southern U.S., except Florida and California.

Expect rates to trend upward in those high-pressure markets until produce season wrap up and those trucks move north with the late-summer and fall harvests.

Mark Montague is industry rate analyst for DAT Solutions, which operates the DAT network of load boards and RateView rate-analysis tool. He has applied his expertise to logistics, rates, and routing for more than 30 years. Mark is based in Portland, Ore. www.dat.com. ®

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FOOD ON THE MOVE LOGISTICS TRENDS IN OUR INDUSTRY

Ports Of Los Angeles, Auckland And Guangzhou Establish Formal Working Alliance The Port of Los Angeles has signed a memorandum of understanding with the Ports of Auckland, New Zealand, and Guangzhou, China, at a Tripartite Ports Summit sponsored by Los Angeles Mayor Eric Garcet-

ti and the City of Los Angeles. The document establishes the Tripartite Ports Alliance, which represents a new level of cooperation between the three port authorities that had initially committed to working more closely together in November 2014. “We commend Mayor Garcetti’s leadership and foresight in helping to form this alliance during his trade mission to Asia last year,” said Ambassador Vilma Martinez, Los Angeles Harbor Commission president.

DOT Grants Agriculture 2-Year Waiver From Hours Of Service Rule America’s hog, cattle and poultry farmers have been granted a 2-year waiver from the U.S. Department of Transportation (DOT) hours-of-service rule for certain drivers, according to farmanddairy.com. The rule, issued in mid-2013 by DOT’s Federal Motor Carrier Safety Administration (FMCSA), Image courtesy of the Port of Los Angeles at www.portoflosangeles.org. requires truck drivers to take a 30-minute rest break for every eight hours of service.

It would have prohibited drivers hauling SHIPPING SUPPLY SPECIALISTS livestock and poultry from caring for aniFDA COMPLIANT PRODUCTS mals during the rest period.

The National Pork Producers Council, on behalf of other livestock, poultry and food organizations, in 2013 petitioned the FMCSA for a waiver and exemption from ORDER BY 6 PM FOR complying with the SAME DAY SHIPPING regulation.

The groups this spring asked the FMCSA to renew the waiver and to extend it for the two-year maximum allowable COMPLETE CATALOG under federal law.

Ambassador Vilma Martinez, left, President of the L.A. Harbor Commission, signs agreement along with Yuan Huahui, center, Deputy Director-General of the Guangzhou Port Authority, and Sanchia Jacobs, Manager Global Partnerships & Strategy, Auckland Council.

CSX And Louisville & Indiana Railroad Partner On $90M Indianapolis-To-Louisville Infrastructure Upgrade Louisville & Indiana Railroad (L&I), a subsidiary of Anacostia Rail Holdings, and CSX announced the completion of an agreement that grants CSX a permanent easement to operate over the L&I’s 106-mile rail corridor between Indianapolis and Louisville. In addition to CSX’s $10 million easement purchase, the two companies finalized an operating agreement that provides for an additional $90 million in infrastructure upgrades over the next several years to improve the track structure and right of way along this key freight route. The joint project, which closed on June 17, 2015, was approved by the U.S. Surface Transportation Board in April.

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U.S. Senate Introduces Multimodal Freight Act U.S. Senators Cantwell, D-Wash., Booker, D-N.J., Murray, D-Wash., and Markey, D-Mass. introduced a proposal creating a national multimodal freight policy and investment program. Much of the bill, the National Multimodal Freight Policy and Investment Act, was crafted based on recommendations developed by the nonpartisan National Freight Advisory Committee, a group organized by the United States Department of Transportation (USDOT) and composed of public and private sector freight stakeholders. www.foodlogistics.com

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Pallet Flow

Push Back

Wide Span

Selective Rack

Cantilever

Warehouse Racking

SolutionS 8 7 7. 6 3 2 . 2 5 8 9

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SPECIAL EDITION

| SOFTWARE & TECHNOLOGY

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very day brings more news about challenges for the food and beverage (f&b) supply chain: rising customer demands, government regulations and food safety concerns among them. On the flip side of these sobering reports come a parade of technologies and innovations that promise to improve supply chain safety and efficiency with automation, cloud computing and more.

The plethora of case studies, white papers and technology bulletins devoted to software and technology in the f&b supply chain can be overwhelming for decision makers. For that reason, they need to establish and ongoing dialogue with business partners (customers, suppliers, consultants and trade resources) to understand their partners’ needs in this changing technology landscape. Such an approach will enable a com-

pany to develop an effective business plan.

The 2015 Material Handling Institute (MHI) Annual Industry Report, “Supply chain innovation – Making the impossible possible,” offers a blueprint for a business plan in today’s changing supply chain.

The report was developed in collaboration with Deloitte Consulting LLP. According to the report, the top three issues that supply

chain professionals find very or extremely challenging are: customer pricing pressure (51 percent), demands for faster response times (50 percent), and rising customer service expectations (49 percent).

“Supply chains face conflicting demands to be better, faster and cheaper. Innovation is the key to achieving all three,” the report notes.

Dramatic change is coming In 2014, MHI’s “U.S. Roadmap for Material Handling & Logistics” predicted that traditional supply chain models will undergo dramatic transformational change due to technological innovation and changes in customer demand through 2025. The survey identified eight technologies

that are driving next generation supply chains: • Inventory and network optimization tools • Sensors and automatic identification • Cloud computing and storage • Robotics and automation • Predictive analytics • Wearable and mobile technology • 3D printing • Driverless vehicles and drones Survey participants for this annual report included more than 400 supply chain professionals from a wide range of industries.

New fulfillment strategies To address the challenges, many companies are changing their fulfilment strategies and holding inventory closer to key customers or markets

CHALLENGES FOR SUPPLY CHAINS

Source: Materials Handling Institute

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ADOPTION LEVELS FOR SUPPLY CHAIN TECHNOLOGIES Source: Materials Handling Institute

and building specialized, high velocity facilities. However, fulfillment strategies alone will not be sufficient to address the current and future challenges that supply chains face, the report notes.

For example, while holding inventory can hedge against uncertainty, it’s also more expensive. Emerging technologies such as advanced inventory optimization tools help companies make smarter decisions about where inventory buffers can be deployed most effectively.

Similarly, building distribution facilities for high volume products can streamline shipments and reduce delivery costs. But for that fulfillment strategy to be cost efficient, companies need tightlyintegrated planning and execution systems. Such systems often require some degree of automation.

Optimizing your network Network optimization tools help companies develop forward-looking scenarios that identify performance impact and associated risks, the report notes. These tools can be helpful in determining where to produce which products, where to hold inventory, which transportation modes to use, and how to differentiate service response times by product and customer.

“Material handling can no longer stand alone as an efficiency play inside the four walls of a warehouse,” says 16

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Mike Nayden, the leader of Deloitte have the greatest competitive or disrupConsulting LLP’s logistics and distributive impact are: 1) optimization tools, tion practice.

2) sensors and automatic identification, Data proliferation and the emergence 3) robotics and automation, and 4) preof data-driven technologies are creating dictive analytics. The first three of these opportunities for sharing information four technologies are already widely used across the entire value chain. in supply chains today.

Progressive companies are starting to Inventory and network optimizaleverage some of these new technologies tion tools rank as the most widely used and pursuing collaboration, the survey and most likely to deliver a competitive notes. Such initiatives include: advantage. This is not surusing customer data prising given their potential ‘Material (23 percent) or supplier data to significantly reduce costs handling can (16 percent) to drive predicwithout requiring a major no longer tive analytics; using cloud capital investment. computing to collaborate with stand alone as The technology expected trading partners (20 percent); to have among the greatest an efficiency and using information from competitive impact yet has sensors and auto-identification play inside the least adoption among to share and collaborate with companies today is predicthe four customers and suppliers ( tive analytics, which only walls of the 22 percent).

24 percent of surveyed warehouse.’

The survey further found companies use currently. the leading barrier to investing However, 70 percent are in new technologies is the lack of a clear expected to be using predictive analytics business case (36 percent). in the next three to five years.

Lack of access to capital ranks as the Predictive analytics is the applicalowest barrier to investment (25 pertion of advanced statistical analysis of cent), indicating that companies are able structured and unstructured data sources to invest, they just aren’t sure how to to identify patterns and predict future quantify the benefits in a way that justievents or outcomes. fies spending the money.

This special edition of Food Logistics explores how the f&b supply chain is The leading game changers embracing supply chain technology in The four technologies expected to the face of a changing market place. ◆ www.foodlogistics.com

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A Case Study

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s a worldwide manufacturer of some of the world’s best-loved pasta products, the 138 year-old corporation knew it needed state-of-the-art technology to elevate it to the “next level” of supply chain management.

Based in Italy, the company “Where most companies relies on numerous warehouses plan out shipments that situated throughout Europe to are based on real orders, serve as the distribution network this food manufacturer for its pastas, bakery products and other edible creations. Until combines demand and recently, the company relied on forecasts to project orders a combination of proprietary throughout the day.” software systems and manual Doug Surrett, VP of International Solutions, processes to manage its transporMercuryGate International tation network.

One of the manufacturer’s biggest challenges, for example, tied directly to a core distribution model that relied on static schedules (shipping directly to

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stores) that were previously handled manually.

Using those static schedules, the company would attempt to “lock up” carrier capacity early in the morning to ensure that the vehicles were available to handle schedule runs. Managing this process was difficult at best in a non-automated environment. “It was basically impossible for a human being to manage manually,” says Doug Surrett, Vice President of International Solutions at MercuryGate in Cary, N.C. “Multiply the process across multiple DCs, and for a volume of several hundred orders/demand profiles (several times a day), and the challenge quickly became insurmountable.”

Adding to the problem was the fact that the manufacturer lacked visibility of “actual” orders for much of the day and, as such, relied on its SAP enterprise resource planning (ERP) system to create “expected” bookings for later in the day. These expectations were based on uncertain forecasts that solidified into actual orders as the day progressed. “Where most companies plan out shipments that are based on real orders,” says Surrett, “this food manufacturer combines demand and forecasts to project orders throughout the day.” The orders are then immediately turned around and dispatched to trucks. In this dynamic environment, assuring that the right

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shipments are matched up with the right routes and the right carriers is an ongoing hurdle for the manufacturer.

The manufacturer turned to technology for help in optimizing its distribution network. Marcos Serrano Timonet, Senior Manager at Accenture, says his company was brought in to help find a “new operating model that would effectively bring all of its logistical operations together in a standardized and normalized manner.” As part of that goal, the consultancy examined the manufacturer’s various logistics operations, which were split across different warehouses and run in very different ways.

“We defined an operating model to show them the benefits they would achieve through this exercise,” says Timonet. As part of the process, Accenture introduced the manufacturer to the supply chain “control tower” concept. “We showed them how a control tower would help them merge flows from one distribution center (DC) to the next,” says Timonet, “and how it would help them negotiate better costs with carriers and gain better supply chain visibility.”

A Solution that Met Unique Requirements

Shipments are matched up with the right routes and the right carriers.

a proof of concept and a parallel adoption (to ensure that criteria for the new system was met), the manufacturer went live on a single warehouse and then subsequently rolled out the TMS to the rest of its DCs over the following months.

According to Surrett, MercuryGate built an interface with the manufacturer’s existing SAP system. That interface takes the demand/forecast data that’s generated early in the day and brings it into a queue (as if it were an order). Batched information from the ERP at 8AM, for example, is 100 percent forecast/zero percent orders. The balance of forecast and orders shifts throughout the day until it reaches “Taking into account all of the 100 percent orders/zero percent forecast by the manufacturer’s requirements, end of the day.

MercuryGate’s Mojo “The orders/forecast Transportation Optimization profiles run all day solution was the best software long through Mojo for validation,” Surrett for the value.”

Marcos Timonet, Senior Manager, Accenture explains, “and are used

After exploring transportation management systems (TMS) options on the market, Timonet and his team recommended MercuryGate for its value, capabilities, and general “good match” for the client’s needs.

“Taking into account all of the manufacturer’s requirements,” says Timonet, “MercuryGate’s Mojo Transportation Optimization solution was the best software for the value.”

After conducting

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Customer Accounts Aggregated To Customer Regions

The INSIGHT visualization module allows a supply chain manager to visualize which customer markets are served by which warehouse.

the f&b industry is largely dependent on the forecasting and strategic planning process of the company, says John Richardson, vice president of supply chain analytics at Transportation Insight, the Hickory, N.C.-based 3PL. ““The thing that has changed is the speed that we’re able to collect data and how much data we are able to share on a real-time basis,” says Richardson. He says fiber optics and GPS are allowing greater amounts of data collection faster. In addition, the ‘cloud’ is giving more companies access to more software and data with less capital investment, thereby enabling opportunities for better analysis.

Vendors have been forced by their retail customers to provide more information about their supply chains, Richardson says.

Anytime a vendor makes changes to their supply chain (e.g., production location) affecting customer-controlled freight, many retail customers require notification. In turn, speed and quantity of information are crucial. “With the customer controlling that piece of the freight, there’s more vendor coordination and collaboration required,” he says.

Transportation Insight’s Insight Fusion is a Web-enabled, mobile-compatible portal 22

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that allows clients to access data and information about a company’s supply chain.

Freight as a percent of the invoice is an example of the type of information that f&b clients are paying close attention to, Richardson says.

Analysis and visualization tools evolve INSIGHT Inc., the Manassas, Va.based provider of supply chain design, has developed a data analysis and visualization module that distills large, complex and strategic supply chains into just a few tables that make it easy to display maps, graphical results or hierarchical relationships. The new data export facility makes it easy to exploit third-party tools such as Microsoft Excel and Tableau.

The reports provide quick access to metrics such as total system metrics; commodity metrics; procurement analysis at the supplier and raw material levels; manufacturing analysis at the facility, line and product levels; distribution analysis at the facility and product levels; transportation analysis at the lane and product levels; and product and customer segment flow path analysis.

Such network design tools can determine the right combination of manufacturing, warehousing, cross-dock and port locations, inventory levels, and transportation links. They also address issues such as strategic sourcing, mergers and acquisitions,

supply chain vulnerability and sustainability. These tools also help supply chain managers identify the components of their supply chains that are driving costs and components, says Dan Bausch, director of analytics at INSIGHT. The supply chain has more tools than ever to provide reliable logistics services. All players face the challenge of understanding how the various technologies meet their business needs and support the best possible customer relations. ◆

For more information: CHEP, 800-243-7872, chep.com DELOITTE CONSULTING LLP, 703-251-1000, deloitte.com ENSPIRE COMMERCE, 844-367-7473, enspirecommerce.com ENVISTA CORP., 877-684-7700, envistacorp.com INSIGHT INC., 703-366-3061, insightoutsmart.com ITASCA RETAIL INFORMATION SYSTEMS, 515-223-0045, Itasca-retail.com KEWILL TRANSPORT, 866-649-1900 kewill.com MANHATTAN ASSOCIATES, 877-596-9208, manh.com MATERIAL HANDLING INSTITUTE, 704-676-1190, mhi.org TRANSPORTATION INSIGHT, 828-485-5000, transportationinsight.com www.foodlogistics.com

7/1/15 4:10 PM

SPECIAL EDITION

| SOFTWARE & TECHNOLOGY

How Enterprise-Wide

Software Tools

Integrate The Food Supply Chain Cloud-based tools, real-time data, data visualization and mobile apps create a new playing field. BY ELLIOT MARAS

S

upply chain managers have more software at their disposal today than ever before. Many options provide enterprise-wide solutions that can help improve the efficiency of operations, product quality and order accuracy.

While new systems are designed to make management tasks easier, decision makers now face the challenge of trying to decide among a myriad of software choices. Software experts say it is important to consider the business’s long-term growth strategy when selecting new tools. www.foodlogistics.com

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Cloud-based systems allow companies the benefit of complex capabilities without having to invest in on-premise systems.

Companies that need to scale operations quickly oftentimes find cloud-based systems helpful in accommodating future growth. They can give access to more functions, even for companies that historically have not had the resources to invest in highly-complex systems.

Cloud-based systems can also allow a high degree of customization.

Enterprise resource planning (ERP) systems, data visualization software and enterprise quality hubs also create oppor-

tunities for companies to manage supply chain data more easily.

Growth brings challenges As a company grows, it typically encounters the need to integrate data from different software systems.

“The hard part has been merging data from disparate systems,” confirms Kevin Glynn, vice president and CIO at DSC Logistics, the Des Plaines, Ill.-based supply chain services provider.

“Not everybody who delivers technology can be all things to everybody,” observes Charlie

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• Comparative analysis in QlikView 11 allows the user to quickly spot similarities, differences, overlaps, and outliers. In this example, the user is comparing two different user-defined sets of products.

Piper, general manager at HarvestMark, the Redwood City, Calif.-based provider of food traceability and quality inspection solutions, a company recently acquired by Trimble.

HarvestMark, for its part, has developed systems that can operate via the cloud and has programs for produce traceability, analytical insights and customer interaction. Piper is among those who believe cloud-based solutions make it easier for customers to access information that is rising in demand in the food supply chain.

“They (growers, manufacturers and retailers) are each getting involved at points of the supply chain they weren’t involved in previously as the food industry is being transformed by demands for greater transparency, quality and safety,” Piper says. “The most important demand for all parts of the supply chain is actionable information.”

Scalable system helps food distributor add functions Scalable systems help companies add more functionality without having to integrate data from different software systems.

Falsetto Fine Foods, an Ottawa, Canada-based wholesale food distributor to local stores and restaurants, invested in a scalable ERP solution several years ago that has allowed the growing company to manage its business in stages. The ERP solution from Queenston, Ontario-based Oneir Solutions manages inventory and accounting.

Falsetto Fine Foods recently upgraded its sales order guide module, a reference that sales reps use in making sales calls.

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This guide, which can be downloaded onto the screen of a sales rep’s laptop or tablet, enables the reps to inform customers of product data, as well as each customer’s order history.

More recently, the company added a supplier order guide, an automated purchasing module that makes purchasing decisions easier, faster and more accurate, says Silvana Falsetto, vice president and controller.

Chicken Express, the Benbrook, Texasbased restaurant chain, recently opened a 100,000-square-foot DC to service its 200 restaurant customers across Texas, Oklahoma, Louisiana, Georgia and Arkansas.

AFS Technologies Inc.’s ERP and WMS software played a critical role in enabling Chicken Express’ expansion. The ability to work with radio frequency (RF) and voice devices at the DC allows the restaurant chain to increase productivity, improve order accuracy, and bolster inbound and outbound product velocity. In addition, the system’s modular architecture ensures the organization can scale capabilities as needed.

AFS Technologies, Inc., based in Phoe-

nix, Ariz., recently enhanced its ERP software with new functionality designed to improve quality control. Two separate components, quality control and finite scheduling, complement the existing functionality within the ERP suite to deliver more comprehensive production capabilities.

The quality control solution provides real-time tracking using an Apple or Android smartphone, tablet or laptop. It enables organizations to implement and monitor measures to prevent contamination and to execute corrective actions quickly.

The finite scheduling enables real-time status on production lines, as well as potential delay alerts and instructions to the production staff. This can provide more efficient runs and minimal changeovers.

Other companies are finding it necessary to integrate different systems in order to use the more advanced capabilities, such as mobile enterprise functionality and graphically-enhanced data visualization.

New features empower supply chain players Nature’s Pride, a global fruits and vegetables distributor based in The Netherlands, recently deployed cloud-based visualization software to drive increased visibility across its supply chain from Qlik, a Reading, Pa.-based visual analytics provider.

To ensure each piece of produce is delivered at the peak level of freshness, the company needs to track the supply chain from grower to consumer. Prior to Qlik’s visualization software, the organization struggled to manage its growing amounts of data, often stored on disparate systems, and had difficulties presenting it in an understandable way.

Nature’s Pride worked with Qlik partner UNIT4, a Netherlands-based provider of enterprise applications, for the full implementation of QlikView. With the deployment, Nature’s Pride was able to streamline its processes to drive efficiency and reduce costs in the supply chain. Employees can now access the data they need with self-service • QlikView 11 takes full advantage of the immersive, interactive potential of touchscreen tablets like the Apple iPad, Android tablets, and BlackBerry Playbook. www.foodlogistics.com

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analytics and can respond with visual insights at the point of decision.

Specific dashboards include: • Advanced productivity dashboard.

This delivers real-time insights into staffing, production speed, and whether employees are performing above or below the norm. The system displays the speed and number of stop minutes of each machine to provide insight into each production line.

• Commercial dashboard.

This provides insights into certain product combinations and the total number of purchases broken out by product. This allows the organization to better meet customer needs and discover what products are most popular.

• Financial balance dashboard. This delivers insights into costs and revenues so Nature’s Pride can pin-point issues

and make cost-saving decisions based on data.

“Everyone is aware of the value that data analysis can offer us and the simplicity with which the reports can be created,” says Roland Loykens, data specialist at

are beautiful. These provide a clear understanding of how we stand compared to the budget so we know if we should accelerate and if so where we need to do this.”

Whether or not a company finds that it needs to integrate different software to add functionalities, new capabilities continue to emerge.

Real-time data plays a key role

Nature’s Pride. “Earlier, we had to pull the information from a multitude of sources, which was a laborious and time-consuming process. Now we have the information we need within a few clicks and the reports

Real-time data monitoring plays an important role in improving the efficiency and quality control of manufacturing operations. Previously thought to be a components related to a single manufacturing operation, real-time data monitoring can integrate a company’s entire supply chain. Cloud-based enterprise data hubs can centralize data collection into a single location and provide visibility of operations from the shop floor across the enterprise and into the supply chain.

The knowledge – or manufacturing intelligence – garnered from this data can

We make a big deal over the tiniest items.

Old Dominion’s focus on premium service means every item arrives with one of the lowest claims ratios and one of the best on-time records in the industry.

OD Domestic offers: • More than 220 service centers nationwide • Competitive transit times and pricing • Proactive shipping solutions

For more information, visit odfl.com or call 1-800-235-5569.

Old Dominion Freight Line, the Old Dominion logo, OD Household Services and Helping The World Keep Promises are service marks or registered service marks of Old Dominion Freight Line, Inc. All other trademarks and service marks identified herein are the intellectual property of their respective owners.

www.foodlogistics.com Line, Inc., Thomasville, N.C. All rights reserved. © 2015 Old Dominion Freight

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• An InfinityQS station on the production floor at at Michael Foods helps managers reduce product inconsistencies.

be leveraged to improve quality control across a manufacturer’s facilities as well as its supplier plants.

“Real-time visibility of operations is especially important to quality control in f&b to ensure consumer safety,” says Mike Lyle, president and CEO of InfinityQS International, the Fairfax, Va.-based provider of manufacturing software powered by a statistical process control analysis engine. Within an f&b supply chain, there are a number of quality control precautions necessary to mitigate delivering a bad product, from metal shavings in frozen pizzas to peanuts in nut-free cookies.

An enterprise quality hub can identify and correct these issues in-process and prevent recalls, Lyle says.

Predictive analytics evolves The data collected while monitoring the quality of ingredients and finished goods offer an often unknown benefit to manufacturers – predictive analytics. Predictive analytics is the application of advanced statistical analysis of structured and unstructured data sources to identify patterns and predict future events or outcomes. It can provide a look into the future and identify emerging patterns in the marketplace that can lead to effective and personalized customer engagement strategies.

Predictive analytics has taken the guesswork out of choosing settings for processing different cheeses for Minnetonka, Minn.-based Michael Foods, an InfinityQS customer. The data-based analyses 26

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• InfinityQS control charts provide realtime visibility and feedback on critical processes.

for a single barrel of swirl), the ability to finetune processes with more precise specification limits results in less raw material variation, increased cost savings and higher quality product for the consumer.

How accurately containers and packages are filled or ingredients are mixed can be important to a food processor, both in terms of quality and cost efficiency, Lyle says.

Predictive analytics provides similar efficiencies in distribution warehouses.

“We use predictive analysis for zoning SKUs in reserve storage and for slotting in the pick lines,” says Ken Heller, senior vice president of supply chain excellence at DSC Logistics. “Also, one of DSC’s Logistics centers uses predictive analytics for projecting volumes and pick percentages.”

F&B lags some other industries attained through charting and real-time feedback from equipment has identified standardized settings that help plant managers reduce inconsistencies. This results in less waste and improved production efficiency.

Ben & Jerry’s, The Burlington, Vt.based ice cream maker, another InfinityQS customer, uses predictive analytics to identify opportunities to improve run capability and raw material usage within its manufacturing facilities. Because high-quality ingredients are typically high-priced (up to $800

• HarvestMark, a Trimble company, enables producers and retailers to make real-time decisions that improve the quality and safety of fresh food.

Lyle says predictive analytics as well as cloud-based enterprise quality control systems are playing a bigger role in f&b manufacturing, but f&b is behind other industries.

F&b manufacturers tend to be slower to adopt predictive analytics tools due to the high number of mergers and acquisitions which lead to standardization challenges.

“However, if manufacturers take the time to implement enterprise-wide standardization and unify operations, they will more easily be able to ensure compliance, reduce scrap and reduce overfill with the cloud,” he says.

Cloud computing has provided a way to ensure “farm-to-fork” visibility of supply chain data, notes Lyle. Without cloudbased technology, it is difficult for most organizations to implement the traceability measures required under the Food Safety Modernization Act (FSMA). “Having supply-chain-wide traceability is crucial for optimizing and preventing recalls,” he says.

Cloud-based solutions only account for a minority of f&b manufacturers to date, Lyle says, but the number is growing.

Some companies still have concerns www.foodlogistics.com

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about the security and the availability of cloud-based systems. The three concerns Lyle hears in order of importance are 1) availability, 2) security and 3) cost. “A properly-designed system can address and overcome these concerns,” he says.

“If a company takes the necessary steps to create an environment that complies with industry regulations, ensures business continuity and disaster recovery, and employs high-level security precautions, you can provide a very stable, reliable system.”

Cloud reduces the cost of installation for lettuce grower A lettuce grower that oversees 16 food processing sites in two different parts of the country has been able to take advantage of the cloud model, Lyle says. In one weekend, and without an internal IT team, they moved their entire facility – machines, lines and equipment – from one place to another without missing a beat. With the cloud, they have eliminated the time and costs of installation and implementation, and found an efficient way to coordinate quality at all their facilities.

Application enhances customer engagement HarvestMark has an interactive application that allows companies to engage directly with customers. General Manager Charlie Piper says a major U.S. retailer is using HarvestMark QR codes to share details about particular products and buying practices, and suggest recipes and complementary products.

“The engagement with the consumer, if it’s not focused, it’s not effective,” he says.

The program also gives consumers the chance to provide input on their produce.

In addition to its supply chain and traceability platform, HarvestMark offers a mobile analytics application. It guides quality inspections, provides analytics for improved buying and gross margin, and creates visibility in real time with automated performance reports and supplier notifications.

More technologies are on the way for food supply chain More technologies are on the way in the f&b suppy chain.

“One other significant technology I per-

sonally follow extremely closely: 3D printing,” says DSC Logistics’ Kevin Glynn.

“The speed of development of this and its effect on supply chains will be more disruptive than all the others combined.”

Software specialists continue to improve ways for f&b supply chain managers to access and visualize data within their own operations and throughout their entire supply chains. ◆

For more information: AFS TECHNOLOGIES INC., 602-522-8282, afsi.com DSC LOGISTICS, 847-635-4952, dsclogistics.com HARVESTMARK, 866-768-7878, harvestmark.com INFINITYQS INTERNATIONAL, 800-772-7978, infinityqs.com ONEIR SOLUTIONS, 416-322-3580, oneirsolutions.com QLIK, 866-616-4960, qlik.com TRIMBLE, 800-874-6253, trimble.com UNIT4, 31 (0) 184-44-44-45, unit4.com

We’re on time when time is scarce.

When you need something shipped immediately, Old Dominion Expedited delivers.

Our focus on premium service means every shipment arrives with one of the lowest claims ratios and one of the best on-time records in the industry.

OD Expedited offers: • Next-day arrival • Delivery at a guaranteed time • Weekend Promise: guaranteed Friday to Monday delivery

For more information, visit odfl.com or call 1-866-637-7333.

Old Dominion Freight Line, the Old Dominion logo, OD Household Services and Helping The World Keep Promises are service marks or registered service marks of Old Dominion Freight Line, Inc. All other trademarks and service marks identified herein are the intellectual property of their respective owners.

www.foodlogistics.com Line, Inc., Thomasville, N.C. All rights reserved. © 2015 Old Dominion Freight

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| SOFTWARE & TECHNOLOGY

Noax Technologies

SPECIAL EDITION

Distribution Warehouse Technology Marches Forward F&B supply chains find use for mobile computing, data visualization, automated equipment and more. BY ELLIOT MARAS

T

he distribution warehouse, a critical cog in the f&b supply chain, has witnessed profound technological innovation, both in material handling systems and management software. Some of the most effective new processes being used in the warehouse today make use of technologies like mobile computing, voice recognition, data visualization and automated materials handling equipment to create new efficiencies.

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While the quest for efficiency is ongoing, new government regulations such as the Food Safety Modernization Act (FSMA) are giving new urgency to companies to scrutinize their warehouse operations.

The traceability rules under the FSMA provided the drive for Martin Brower, the supply chain services provider for quick-serve restaurants, to

invest in its first WMS. “It certainly made the business case for the solution much easier to swallow. We are fortunate enough to work for a company that invests heavily in technology,” says Kris Jensen, director of operations support for the Chicago-based company.

The implementation of Manhattan Associates’ WMS will be completed in all of the company’s U.S. DCs before the final FSMA traceability rules take effect in 2017.

The WMS integrates with Martin Brower’s ERP and the Vocollect voice recognition software that the company uses for picking cases. Inventory accuracy has improved. “It’s almost impossible to mispick an item,” says Ginny Toepfer, Martin Brower’s IT director for North America. “As our customers increase limited-time offerings and promotions, SKU count will certainly increase.

These programs bring a lot more inventory into the supply chain to manage, and the WMS ensures this is a nonevent and ‘business as usual’ for us.”

According to Jensen, the key benefits of the WMS are “standardizing operational processes across our 18 distribution centers to improve order accuracy, inventory management and delivery reliability. It also satisfies the traceability requirements.”

Jensen adds that, “Utilizing a WMS system is just one of the ways we show our commitment to protecting our customers’ brand.”

Seasonal demand weighs big for some A “best of breed” WMS is critical to Niagara Bottling, LLC, the Ontario, Calif.-based bottler that is riding the explosive growth of bottled water.

One of the biggest challenges the company faced in addition to rapid growth was the seasonwww.foodlogistics.com

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① ality of demand among grocery retailers, says Sreesha Rao, senior IT applications manager. “We have seasonality in terms of what customer demand is,” he says.

The company manages deliveries from 11 warehouses using its own fleet and three 3PLs. Rao says WMS providers have improved functionality since he began investigating it four years ago. After a careful selection process, the company chose to implement Manhattan Associates’ WMoS (Warehouse Management Open Systems).

At the same time, Rao feels fortunate to have come across Veridian Solutions,

②

Raymond Corp.

Image courtesy of Crown Equipment.

Real-time data enhances lift truck management

① A warehouse worker uses Crown’s QuickPick Remote to move the lift truck ahead in the aisle, eliminating the need to step up and down off the truck to move to the next pick position. ② The Raymond Model 3010 automated lift truck does not require a driver.

R

eal-time data collection is the foundation of forklift fleet management and requires forklift connectivity. This necessitates a communications terminal that integrates with the trucks’ electronics to communicate data on impacts, energy consumption, utilization, location and other factors, according to Crown Equipment Corp., the New Bremen, Ohio-based lift truck manufacturer.

Real-time information from lift trucks can deliver efficiencies in two areas: during service events and real-time during operation.

Real-time operator coaching represents yet another opportunity. Fleet management systems create a foundation for active operator coaching.

The combination of service management and realtime monitoring increases organizational efficiency by automating manual tasks such as maintenance scheduling, training management and compliance reporting.

Centralizing service management using a single network of providers creates the foundation for a comprehensive fleet management program with minimal investment. When this information is available through online reporting, it can offer up-to-date support for management decisions as well as visibility into fleet costs. Vehicle replacement decisions can be made using actual service costs. ◆

When you’re driven by details, the world is a smaller place.

Old Dominion simplifies global shipping by doing more than delivering freight. Our focus on premium service means every shipment arrives with one of the lowest claims ratios and one of the best on-time records in the industry.

OD Global offers: • Personalized, single point of contact for status on all shipments • Pacific Promise™: service from 24 Asian ports direct to the U.S. • Direct service to or from Canada, Mexico, Puerto Rico, Alaska and Hawaii

For more information, visit odfl.com or call 1-800-432-6335.

Old Dominion Freight Line, the Old Dominion logo, OD Household Services and Helping The World Keep Promises are service marks or registered service marks of Old Dominion Freight Line, Inc. All other trademarks and service marks identified herein are the intellectual property of their respective owners. © 2015 Old Dominion Freight Line, Inc., Thomasville, N.C. All rights reserved.

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an Atlanta, Ga.-based integrator for WMS systems. He found the integrator much more cost efficient to work with on the deployment than the software provider itself. With expertise on Manhattan Associates’ applications, Veridian Solutions was able to help Niagara Bottling tailor the highly-configurable WMoS to properly fit its needs.

“The inherent nature of the consumable product industry requires them (Niagara Bottling) to be very quality

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focused,” says Sandeep Patel, a partner at Veridian Solutions. In addition to the WMS deployment, Veridian Solutions introduced cycle counting and inventory tracking solutions for product recalls at Niagara Bottling.

The yard management system from Manhattan Associates has also been helpful to Niagara Bottling, Rao says. The system saves the trailer drivers from waiting in the storage area to find out what dock to pick their loads from.

Sandeep Patel and Jason Rosing, partners in Veridian Solutions, say their methodology can reduce the implementation time by 30 percent or more for multi-site implementations, as they did for Niagara Bottling. Both men worked on the Starbucks WMoS implementation in 2011.

Ingredient distributor upgrades inventory attributes Batory Foods, a Chicago-based, nationwide food ingredient distributor, recently overhauled its supply chain software to standardize processes and documentation across its network of more than 30 warehouses and nearly 500 vendors. Batory Foods wanted to improve its supply chain insights, says Daryl Fisher, WMS application manager.

The company felt a need to do this on account of safety regulations and increasing customer expectations. In order to achieve the level the company was aiming for, they decided to upgrade their inventory attributes and better integrate their software systems.

In keeping with Good Manufacturing Processes (GMP), ingredient manufacturers provide a certificate of analysis – a detailed listing of the chemical composition products – with every product run.

Because of this, integration with Batory Foods’ document management system was critical.

The WMS allows the company to process orders with more efficient layouts, improved resource utilization and streamlined inventory and order fulfillment processes. Since implementing Manhattan SCALE, Batory Foods has seen a marked improvement with inventory visibility and order fulfillment processes.

The WMS provides a single point of access for the customer, ensuring that all documents are consistent. “Through this added insight, we’ve been able to improve standardization across the organization and enhance order and service quality for our customers,” Fisher says.

The DCs previously operated autonomously or semi-autonomously. “We now have much better visibility and the new system is more efficient in the way it processes data controls operations,” Fisher says.

Batory Foods has deployed the WMS www.foodlogistics.com

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It’s why every detail matters in our plants.

© 2015 Utility Trailer Manufacturing Company. All rights reserved.

Quality is the only standard our reefer plant employees know.

They don’t just work the line, they stand watch on it.

To find out more, call your local dealer

or visit www.utilitytrailer.com.

www.foodlogistics.com

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ASRS’s Other Role: Support Warehouse Maintenance And Repair Operations

A

utomated storage and retrieval systems have long been viewed as tools to improve order picking and fulfillment in the warehouse. But they can also manage maintenance and repair operations in ways that can improve warehouse efficiency, according to Chelsea Tarr, marketing communications director at Kardex Remstar LLC, the Westbrook, Maine-based material handling solutions provider.

• Centralized Storage: By implementing an automated storage and retrieval system dedicated to the storage of maintenance supplies, tools and spare parts, an operation can be assured that all items are kept in a centralized, designated location. Items can be easily found and accessed, minimizing search time.

• Better Organization: To help maintenance technicians find the items they need even faster, the equipment can be outfitted with partitioned trays or totes for organization and easy locations of small components, such as screws, nuts and bolts.

• Track and Trace Accountability: If the machine is integrated with inventory management software, authorized operators can be required to first input a software-traceable personal login and password. For operations that wish to keep track of shared tools or gear required to service equipment, this additional measure of accountability allows depleted, missing or misplaced items to be quickly tracked back to an individual.

• Parts Protection: Because automated storage and retrieval machines can be fully enclosed, the supplies, tools and spare parts stored inside are protected from exposure. This maximizes the useful life of the items, preventing scrap and waste.

• Maximum Storage Density: Installing high-density automated storage equipment significantly reduces the amount of square footage required to store parts and supplies. The equivalent amount of items held in 120 bays of static shelving can be condensed into two horizontal carousels (66 percent space savings), two vertical carousels (75 percent space savings) or a single vertical lift module (85 percent space savings).

• Enhanced Ergonomics: Every item stored in an automated storage and retrieval system is delivered at the correct ergonomic work height. The unit’s opening is positioned waist-high, eliminating bending to retrieve an item stored low, or stretching to grab an item stored high. The automated storage equipment can lessen the chance of injury and absenteeism, while also reducing insurance premiums and claims for worker’s compensation. ◆

in three warehouses and plans to continue to roll them out to the remaining company-owned DCs. Data visualization software, which presents data in graphic images that make data easier to understand, has also created opportunities to manage warehouses more efficiently.

Dallas, Texas-based RMG Networks has integrated visual screen capabilities with labor management for warehouses. RMG’s labor productivity improvement tool provides real-time, highly visible metrics and data that enable employees to see how they are performing against goals. By receiving this information in real time, employees can adjust their behavior and maximize their productivity.

Supervisors can send real-time metrics (e.g., picking and packing rates by team or individual members; rankings; actual versus goal performance) via display screens and desktop dashboards to employees on the warehouse floor. This enables them to make decisions in real time. The data also can be pushed to mobile devices, enabling management to monitor activity from any location or through pre-set, threshold alerts.

“Once the data (real time metrics show-

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Warehouse supervisors can send real-time metrics (e.g., picking and packing rates by team or individual members; rankings; actual versus goal performance) via RMG Networks display screens and desktop dashboards to employees on the warehouse floor.

ing production or safety or quality or any number of KPIs) is collected, then that data can be displayed anywhere – large scoreboards, desktops or mobile devices,” says Kerwin Everson, vice president of supply chain solutions at RMG Networks.

“We have customers displaying information on pallet building goals and pallet builder actual performance on a real-time or close to real-time basis,” adds Steve Chang, senior vice president of strategy and solutions at RMG Networks. “This allows a shift, team or individual to know how they are doing and to manage to the best result. We also have food and beverage customers displaying ‘receiving performance versus actual’ on large displays to help forklift drivers understand their real-time performance as they move in and out of the receiving area.”

The increased computing power has also improved the case for automated materials handling equipment in the f&b warehouse.

As warehouses deploy more robust WMS systems, many think auto-

mated materials handling equipment will expand.

Rudi Koetter, product manager of automation at The Raymond Corp., sees the biggest change taking place in the automated guided vehicles (AGVs) sector. He says his company has made AGVs since the 1970s, but the fastest growth has come in recent years. The company’s most recent vehicle, an automated lift truck (ALT), still requires manual loading and dispatching, but there is no driver needed.

The development of natural feature navigation systems has also made this type of ALT easier to implement and use than the older AGV systems that rely on artificial landmarks. Koetter says in f&b, the retailers are leading the investment in warehouse AGVs. Next on the horizon will be augmented reality glasses that combine voice, camera and visual display for the warehouse worker, Koetter says. These glasses with built-in scanners can instruct warehouse personnel what steps to follow in building a pallet. ◆

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For more information: CROWN EQUIPMENT CORP., 419-629-2311, crown.com MANHATTAN ASSOCIATES, 877-596-9208, manh.com KARDEX REMSTAR LLC, 800-639-5805, kardexremstar.com RAYMOND CORP., 800-235-7200, raymondcorp.com RMG NETWORKS, 800-827-9666, rmgnetworks.com VERIDIAN SOLUTIONS, 480-326-3357, veridiansol.com VOCOLLECT, 412-829-8145, vollectvoice.com www.foodlogistics.com

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To see more green for your company call 1(800) 884-0225, or visit:

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FOOD LOGISTICS

• JULY 2015

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SPECIAL EDITION

| SOFTWARE & TECHNOLOGY

How Is SOFTWARE & TECHNOLOGY Impacting The Food & Beverage Supply Chain?

Industry executives weigh in on the hottest solutions and strategies.

A

s part of this month’s special coverage on Software & Technology, we contacted over a dozen industry executives at companies that play a significant role in the food and beverage supply chain to ask them about the impact of Big Data, analytics, apps and more to get a sense of the changes underway and what they portend for the future. Without a doubt, Software & Technology represents one of the fastest-moving, promising and disruptive segments in the business and consumer worlds today. In the food/beverage supply chain it facilitates visibility from farm-to-fork, compliance, improved food safety, productivity, better management of people and processes, and cost reductions and accuracy, among other benefits.

Following are highlights of the comments and quotes these industry executives shared with Food Logistics…

Who: Chetan Tandon, CIO Allen Lund

Company, LLC; ALC Logistics Key Topic: Evaluating your software/ technology spend Takeaway: Look for a solution, not just a product

A

ccording to Tandon, “Technology has changed the way we look at the transportation and logistics industry today. Several factors play a major role in this evolution, products like mobile technology, transportation management systems (TMS), yard management, dock scheduling, warehouse management systems (WMS), and location and trailer tracking devices are just a few. Many companies have already taken advantage of such technologies, and some are playing catch up. With so many products in the market, how do you decide which one is the right match for your market segment, industry 34

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and company?”

Tandon says there are several key factors to consider: Price: Expensive is not always the best.

Many times mid-market solutions offer more bang for your buck. It is important to find out how much this solution will cost you over the next five years. Technology will change significantly in five years, and so will price.

Features: Does the solution offer all the features you are looking for? Can it grow with your company’s needs? A company needs to assess their business plan specific to growth and confirm that the software solution fits into the plan.

Platform: As we all know, the tech world is experiencing a mobile war, browser war and operating system war. Is the solution your company is considering platformagnostic? If it is not, then this platform will not be in keeping with your business plans.

Additionally, the “solution” will not be able to keep pace with the platform competition in the marketplace.

One size does not fit all: Is the solution customizable? The way you run your

BY LARA L. SOWINSKI

supply chain might be completely different from others in your industry. Can the solution be customized to fit your business needs or do you have to change your business process to fit the solution?

When shopping for software, keep in mind the various aspects in which technology interacts with your business. Look for a solution, not just a product. ◆

Who: John Haggerty, Vice President,

Burris Logistics Key Topic: Cold chain challenges Takeaway: Creating high performance strategic partnerships

“T

oday’s cold chain and its stewards are being stretched to new levels of performance by consumer demand, especially for products from all fresh categories,” emphasizes Haggerty. “More products are processed and harvested in more places requiring precision temperatures, critical handling, and faster movement than ever before. As cold chain resources tighten, older assets reach obsolescence, and the driver shortage deepens; food industry leaders should plan for these realities and look to create new, highperformance strategic partnerships.”

Choosing the right cold chain partners is crucial. Haggerty lists a handful of questions to consider when evaluating partners: • Will your potential partner be a true partner, one willing to go the distance, and share the pain and the gain with you?

• Does your partner invest in people, training, and talent management?

• Does your partner invest in “owned” cold chain assets and their proper maintenance?

• Is your partner experienced and capable at multiple temperatures? www.foodlogistics.com

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• Do they have a solid track record and reputation of integrity?

• Is your partner committed to constant improvement, process improvement, and process reengineering?

• Does your partner invest in new technologies?

• Is food safety and agency compliance part of your partner’s DNA and culture and do they live this every day?

According to Haggerty, “Cold chain logistics partnerships can create substantial value. They can also be executed with seamlessness, visibility, and transparency.

New and emerging technologies allow for real-time visibility, as well as time, place, and temperature validation. Inventory visibility and full functionality through systemic integrations can essentially join two companies at the hip. The challenges of fresh supply chain execution may be effectively addressed through collaboration and true partnerships.” ◆

Who: Dan Filby, EVP and Managing

Director, First Advantage Key Topic: Big Data Takeaway: Opportunities to improve carrier performance and profitability

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I

n the U.S., the average for-hire truck drives 489 miles each time it hauls freight. With 10.3 million commercial trucks on the road, these vehicles are generating large volumes of information—or Big Data—while in operation.

It’s estimated that today’s commercial vehicle generates about 1 terabyte of data annually, according to Filby.

“The existence of these data creates the opportunity for fleet operators to improve their operations with respect to a host of performance measures including pricing, routing, asset tracking and utilization, maintenance, and fuel optimization,” he says. Furthermore, “The existence of these data creates the opportunity for automated government audit and enforcement efforts.”

However, not all carriers invest in the time or analytic tools necessary to mine their own data.

“Some fleets look to an outside vendor because they do not have the internal capabilities or time to conduct this analysis on their own,” says Filby. “Some look to third-party vendors because they’re private carriers—for example, Pepsi— and while they have the capability to do so, it is more cost-effective to have a

specialist do it for them so they can focus on their core businesses. Regardless of the reason, they don’t want data. They want management information.”

Big Data is only going to get bigger, remarks Filby. “The proliferation of data from trucks will continue to expand with the growth of onboard devices and a greater driver adoption of social media.

With that comes the opportunity for analyses that deliver actionable information to commercial vehicle operators that drives top-line revenue and helps them control costs and bolster profitability in an industry with thin margins.” ◆

Who: Mike Meehan, CTP, VP of Sales, Fleet Advantage Key Topic: Mining Big Data for competitive advantage Takeaway: Rethinking the fleet lifecycle management practice

“I

n the arena of food distribution, understanding the financial impact of integrating technologies that continually increase fuel efficiency and reduce emissions is imperative,” emphasizes Meehan. “Leveraging

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data can be the catalyst to elevate a distribution operation from a support function to competitive differentiator with quantifiable revenue enhancement strategies. Using newly-available technology that generates data from a wide variety of sources, then combining and mining that data to discover new ways of cutting costs is the key to gaining competitive advantage.”

Meehan says that, “While data has long been used for route optimization, only recently could it be leveraged to provide new insight into the equipment performance, operating costs and fleet lifecycle management practices. By combining equipment performance data with maintenance and finance data, it is possible to determine each vehicle’s point of economic obsolescence—the exact time that a tractor starts costing more to run than it does to replace it with a new model. The data essentially provides a P&L statement on each truck.” ◆

Who: Bob Camozzo, President, Logistix Solutions Key Topic: Cost cutting strategies Takeaway: Designing more user-friendly software solutions

“W

e work with many companies, both start-ups as well as established enterprises, in diverse industries,” explains Camozzo. “A common theme we are seeing from all our customers in the area of logistics, and specifically transportation management systems (TMS) software, is that companies today are really pushing the boundaries and using aggressive cost cutting strategies like cross docking, backhauls, direct supplier shipments bypassing distribution center networks, managing their own inbound freight and moving from less than truckload (LTL) to

multi-stop truckload and other consolidated freight methods.”

He adds that, “While these types of strategies used to be managed as one-off, manual processes, each of these strategies pose a big challenge for supply chain optimization software with even bigger opportunities to generate significant savings, often beyond the frequently-touted 10 to 15 percent goals companies set as a minimum ROI. The reason these strategies are so challenging to solve is that they are often unique to each company, therefore it’s a challenge to design software algorithms that provide flexible solutions for a broad spectrum of users.”

This requires even greater customization or rapid response and continuous improvement, which the new generation of on-demand software or Software-as-a-Service is capable of providing, says Camozzo. ◆

Who: Peter Yost, VP of Marketing, MercuryGate International Key Topic: Fleet management and food safety Takeaway: An optimal plan requires careful analysis

“T

he food and beverage supply chain has challenges unique to its industry for transportation management,” says Yost. “End-to-end, or tower-to-tower, visibility of the location, and in some cases, the current temperature of the products on board is critical to ensuring food safety and integrity. Knowing where inventory is and the condition of inventory when in route allows the food company’s logistics team to react quickly to emergencies, keep the customer updated and reduce their own safety stock inventory levels.”

In addition, “Food companies that operate a fleet for deliveries

Sensing demand in over 160 countries Terra has been the global leader in demand sensing since inventing it in 2002. We help some of the world’s largest manufacturers accurately predict demand in volatile markets, cut unnecessary inventory and ensure product availability.

Learn how demand sensing can improve your customer service and cash flow.

TerraTechnology.com or 203-847- 4007 x136

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www.foodlogistics.com

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“Demand Sensing Gets Its Day In The Sun”

O

ne of the biggest buzzwords in the software and technology segment today is “disruptive,” as in disruptive innovations that create new—and unexpected—markets and value networks. The advent of digital photography and the resulting “disruption” of the chemical photography market is one example. In the supply chain space, Terra Technology’s invention of demand sensing 13 years ago fundamentally disrupted traditional planning systems with “advanced pattern recognition algorithms to sort through masses of real-time data, understand what is predictive and create the best picture of demand for every item at every location,” explains Terra Technology’s CEO Robert F. Byrne. “It is the way you would imagine demand planning to work if it were invented today instead of 50 years ago.”

He explains it this way. “When you decide how much milk to buy for your family, do you check historical shopping lists to see how much milk you bought this week last year, or do you open the fridge to see how much is there?”

The powerful algorithms in demand sensing are just like peeking inside the fridge and simultaneously examining hundreds of other signals to find predictive patterns in and between data sets. According to Terra Technology’s 2014 Forecasting Benchmark Study, on average, food companies that use demand sensing cut their forecast error by 41 percent across all items and years (2009 through 2013).

Other food-specific findings from the study include: • Overall, the proliferation of food items remains pretty stable over time, but started to rise in the last two years with 13 percent more items in 2013 compared to 2009. In the same period, shipments were up 1 percent. As a result, sales per item dropped 10 percent.

• The number of cumulative items almost doubled during this 5-year period, but was masked by a high churn rate of 92 percent. On average, each food company has been introducing three new items and discontinuing two items every day, 365 days a year for the past five years.

• Finally, the ‘long tail’ continues to be a challenge. The slowest moving 50 percent www.foodlogistics.com

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By Lara L. Sowinski

of items contributed 2 percent of sales, while the fastest-moving 10 percent of items generated 70 percent of sales. In other words, companies could cut their complexity in half while losing at most 2 percent of their volume, probably less.

Meanwhile, demand sensing is still working to acquire widespread acceptance in the market place. Byrne says the five years following the initial launch were slow, with only one major deal each year. That changed, however, when Procter & Gamble (P&G) chose to implement demand sensing.

“It was a real endorsement and put us on the map,” says Byrne. P&G deployed Terra Technology’s demand sensing to approximately 75 percent of its global business and has also selected multi-enterprise demand sensing, inventory optimization and transportation forecasting.

Nils Mueller, P&G’s intelligent daily forecasting initiative manager, explains that, “In the current economic climate—with ever increasing volatility in demand—it is crucial to extend the supply chain visibility as close to our customers as possible.

Speed today is of the essence. Only those companies that can respond quickly to customer and consumer needs will stay ahead. Terra’s software provides P&G the ability to stay ahead of shifts in consumer demand.”

Kellogg, Kimberly-Clark, Unilever, Mondelez, Kraft and General Mills are others that have implemented Terra Technology’s solutions. And while Byrne admits that some still don’t view demand sensing as a “must have” solution, like WMS, for instance, there are some positive signs on the horizon.

“Ten years ago, I really thought that retailer data was going to transform the supply chain,” he says. “It’s still getting there. You had a bunch of people that rushed in to do things like on-shelf availability management, but then there was a lull. However, it’s started picking up a bit. The recession forced everyone to shift their focus and a lot of projects got canned. But in the last few months I’ve suddenly seen a lot of customers and prospects doing a 3- to 5-year play around supply chain systems. It’s very exciting.”

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are challenged to optimize the use of their vehicles and the use of contract carriers.

Determining the optimum plan for meeting local and long-distance deliveries with the company’s fleet and contract carriers requires careful analysis of delivery windows, equipment types, pooling locations, and fleet and driver availability. Minimizing the miles driven and driver hours behind the wheel required to deliver products to customers saves money and reduces the company’s carbon footprint.” ◆

Who: Amy Childress, VP, Marketing &

Business Development, PakSense Key Topic: Automating the transfer of cold chain data Takeaway: Cellular connectivity removes human intervention

“A

t PakSense we are seeing a new trend in monitoring and maintaining the cold chain,” notes Childress. “Historically, customers were happy with placing a temperature logging device on a perishable load and downloading it at the receiving end.” But, the FSMA legislation is likely driving changes in demand for information, she suggests.

“Today, there is increased interest in automating the transfer of this cold chain data and making it available via the cloud for anytime, anywhere analysis and on-demand report generation.”

The company has responded to this market shift by creating systems that utilize cellular connectivity to transmit cold chain data, she says. “For example, our AutoSense inbound system utilizes PakSense wireless labels and our cellular M2M readers.

Labels are placed on loads by suppliers and when they arrive at a distribution center, the truck door opens and the temperature data from the wireless label is automatically downloaded to the reader without any human intervention. Emails with temperature data are automatically sent to QA staff smartphones and the data also resides in a database on the cloud. We have similar cellular-based facility monitoring systems and real-time loggers that provide temperature and location data in real-time, and they can be bolted on to our AutoSense Inbound monitoring system. All of these systems are automated and use cellular connectivity to transmit data to a central repository where users can analyze data further.” ◆ www.foodlogistics.com

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Who: Ron Gillies, VP Sales & Marketing Americas, Printronix Key Topic: Food traceability and compliance Takeaway: Meeting GS1 standards

F

rom his perspective, Gillies says that, “Creating compliant labels and tracking that data through the supply chain can be a challenge for many food producers/growers and manufactures. Today’s label software providers are making that easier through simple-to-use, GS1-compliant templates, but many challenges remain.”

For example, “How do you confirm the label has printed correctly? How do you print in a wide range of temperatures and still produce readable barcodes? Additionally, how do you capture the barcode and associated product data throughout the supply chain?” These are the types of challenges that are resolved by selecting the right barcode printer that can operate at a variety of temperatures, asserts Gillies.

“Real-time label validation is also essential to assure GS1 and industry compliance regulations, which will ultimately save businesses time, money (fines) and simultaneously help collect valuable data from their operations. Solutions that can provide these time and money savings are available from Printronix, such as the T8000, which can operate as low as 23 degrees F (5 degrees Celsius); along with our Online Data Validation and PrintNet Enterprise solutions, which can validate barcodes for compliance and manage print production through an entire organization, respectively. All crucial elements to the success of an efficient supply chain process.” ◆

Who: Kevin Lynch, National Account

Executive, Q Products & Services Key Topic: The impact of rejected loads on the supply chain Takeaway: Applying technology to address this challenge

L

ynch explains that, “Our business is unique because we have a diverse customer base that includes food manufacturers, motor carriers and retailers.

In terms of the supply chain, all three play an important role that is dependent on one another to ensure a successful shipment is executed.” In addition, “Food safety regulations already impact our industry and will www.foodlogistics.com

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continue to do so moving forward, especially when something goes wrong,” he says.

“Think about the rippling effect a rejected load has on everyone involved.

For example, the revenue lost by the shipper followed by a scramble to get another load prepped for the customer. The carrier will likely be hit with a claim to pay and then forced to delay a scheduled backhaul.

Meanwhile, on the receiving end the customer is left with a delayed timeline to get the product on the shelf, resulting in potential lost sales. These are just a few of the consequences felt by each business. While it’s difficult to determine which company feels the most pain, the reality is that on some level everyone loses.”

Lynch acknowledges that rejected loads are sometimes unavoidable. However, “The preventable instances are the most frustrating to everyone involved. Tampered seals and missing temperature recorders are two of the more common variables causing shipments to be turned away. As an industry, we need to continue the development of proactive solutions by way of existing technology.” ◆

Who: Valentina Cecchi, Marketing

Coordinator, System Logistics Key Topic: Food safety compliance Takeaway: Using AS/RS to support tracking and tracing

“F

actory-to-fork traceability has many challenges. Key among them is seamlessly tracking and tracing all ingredients input through the final product output while optimizing speed of response at most efficient operating costs. Companies and organizations looking to modernize their processes and facilities should focus on systems and solutions that can support compliance regulations associated with the Food Safety Modernization Act (FSMA), which will be strongly enforced in the near future,” says Cecchi. In addition, “The application of best practices is necessary to decrease response time to customer/regulatory body inquiry or recall, limiting potential product loss and financial liability. With the understanding that data tracking and traceability is critical for food manufacturers, System Logistics software suite Systore provides all of the necessary interface points between the end users’ ERP system and the distribution center’s automation system, helping to keep the system running at peak performance.”

She adds that, “By storing finished goods FOOD LOGISTICS

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and raw materials in automatic storage and retrieval systems (AS/RS), inventory control and traceability can be guaranteed due to System Logistics` Systore software, which controls the material flow and reports back to the host WMS or ERP. The Systore software can provide a real-time snapshot at any given time and has many more functions to support the material management within the warehouse (i.e., quarantine, cycle counting, expired product or materials, etc). Additionally, utilizing AS/RS warehousing significantly minimizes product damage while increasing accuracy.” ◆

Who: Kerry Byrne, President, TQL Key Topic: Mobile apps Takeaway: Speak-and-search features finds loads fast

I

n May, freight brokerage firm Total Quality Logistics (TQL) released Carrier Dashboard 4.1, the first mobile application in the trucking industry with speak-and-search technology designed to save time for drivers on the road and help them find freight more easily.

“We are the first to market with a mobile application that allows drivers to search for loads with voice commands,” says Byrne.

“Technology is a serious competitive advantage. The faster carriers can find our loads, the easier it is for us to satisfy our customers’ delivery requirements.”

The app uses a form of artificial intelligence that continuously improves performance, along with recognizing regional accents and filtering out most ambient noise. The more drivers use the app, the better it gets. And when it’s time for the driver to head home, he/she simply asks the app to “take me home” and it finds them a load heading back to their home town. ◆

Who: John Clark, Marketing/New

Business Development Manager, Viastore Key Topic: Apps for consumers and B2B; AS/RS Takeaway: New tools improve cold storage facility management

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“W

ith the advent of ‘There’s an app for that,’ controlling your cold storage AS/RS via a tablet device makes sense,” says Clark.

“One of our customers, Americold, uses this at their Indianapolis facility. With it, users can monitor the system—and more accurately, monitor by exception. They don’t need to see what’s working, but more so see where issues might occur. This saves on travel time throughout the facility as adjustments can be made within the facility and also from a control area outside the cold storage area.” Both software solutions (TMS, WMS etc.); and hardware (AS/RS, forklift technology etc.) can be monitored and controlled.

“In the meantime, AS/RS technology continues to make inroads into the cold storage arena,” says Clark. “AS/RS falls into Level 3 of the four-level automation scale.

Level 1 includes WMS and RF or voicedirected picking. This offers an ROI of as fast as 6 to 12 months. Level 2 automation includes conveyor or pick modules and can have an ROI of one to two years. Level 3 includes AS/RS solutions, which also encompasses conveyor and sortation as well as warehouse control systems and WMS, and can offer an ROI of three to four years.

This was unheard of five years ago. Finally, these levels of automation solutions are incremental, so users can ‘dip their toes’ in the waters of automation and build out as they need to.” ◆ www.foodlogistics.com

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FOOD (and More) FOR THOUGHT

JOE GERBER, REID WILLIAMS

Food + Bits + Blocks The bitcoin block chain creates a faster, more efficient supply chain.

Y

GERBER

ou may or may not be familiar with digital currencies, like bitcoin, which are Internet-based currencies that exhibit properties similar to physical currencies, but allow for instantaneous transactions and borderless transfer-of-ownership. The transactions are faster and incur less cost than traditional currency. A “block chain,” meanwhile, is a distributed data store that holds a permanent public ledger of transactions for digital currencies, such as bitcoin. Beyond simply tracking currency, these technologies are the building blocks for a new and quickly growing “Internet of Value.” This summer, in partnership with the Harvard Innovation Lab, we created the Food + Bits + Blocks popup incubator to explore how bitcoin and block chain technology might change our daily lives.

Whether we buy a taco or an iPhone, we’re at the receiving end of a supply chain that often stretches around the globe. Usually we don’t think much about it, and this is a good thing. But sometimes it’s important to know more.

Taking a bite out of a taco involves a certain amount of trust: trust that the kitchen that made it is sanitary, that the ingredients that went into it are fresh, and that the taco tastes good. This trust is critical, but there’s so much more we could know.

We could create entirely new relationships with the stuff we buy, namely where it came from and how it arrived in our hands.

Block chains offer a way to introduce transparency into supply chains and to create new opportunities for participation. As a shared, secure record of exchange, block chains can track what went into a product and who handled it along the way, breaking supply chain data out of silos, and revealing the provenance of a product to everyone involved from originator to end user. This transparency will impact all sorts of products, but it is especially relevant to food supply chains. Let’s see how these technologies might change the everyday experience of buying, cooking, and serving dinner to friends.

It’s Saturday morning and you’re at your favorite bakery for a pastry and coffee. A strawberry tart catches your eye and you order one along with a coffee.

The strawberries in the tart are delicious, and you’re curious about where they came from. The bakery purchases and manages its ingredients inventory using a system that you can use too on 42

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your phone. You see all the ingredients that went into the tart and where they originated.

In this scenario, the strawberries came from a small farm about 200 miles away. The farm records and shares details of its operations. This lets the farm share good practices with other farms and get certifications. You see that the farm grows strawberries in a field that uses drip irrigation and is certified organic and low water use.

You can also see what else they’re growing right now: lettuce, carrots, summer squash and kale.

Next, you follow a link to the farm’s blog and read that they sell directly to individuals. You’re an avid preserve maker and so you buy a smart contract, committing to buying five pounds of strawberries if the price goes below $5 a pound. Since the contract is binding and automatically executed, the farm can use it to forecast their revenue for the season.

A few weeks pass, and you get a push notification on your phone.

The farm is having a bumper crop of strawberries, and your contract has been executed. You stop by their stall at the farmer’s market to pick them up. You try one and they’re so good that you decide to have some friends over for a strawberry-themed dinner party.

You head to the supermarket for dinner ingredients. As you walk in, you see some brownies that look good. You have to be careful though because one of your friends has a serious peanut allergy and you can’t serve anything that has come into contact with peanuts during processing. You have an app on your phone that lets you find products without certain ingredients and you have a saved filter for peanuts that you’ve used before. The app checks not only the ingredients of the product, but the entire supply chain of ingredients.

By digitally capturing the identity of goods in an interoperable way, block chains establish provenance for every ingredient as it travels from farm to table. This transparency gives consumers more information about where their food comes from, how it was processed, and how it arrived at the plate. It gives suppliers the ability to see downstream in the supply chain -- who is buying their goods and how they’re used. ◆ Reid Williams and Joe Gerber are senior designer/engineer and director of IDEO Futures (ideofutures.com), respectively. They are launching a block chain startup lab at the Harvard Innovation Lab. www.foodlogistics.com

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