Food Logistics July 2016

SPECIAL EDITION: SOFTWARE & TECHNOLOGY IN THE FOOD SUPPLY CHAIN

Food Logistics

®

Global Supply Chain Solutions for the Food and Beverage Industry

THE ALWAYS-ON SUPPLY CHAIN

ARRIVES IN FULL FORCE

SOFTWARE & TECHNOLOGY INNOVATION EMPOWERS THE FOOD SUPPLY CHAIN

+

SUPPLY CHAIN PLANNING & EXECUTION TOOLKIT MAKES STRIDES

FSMA REQUIREMENTS CALL FOR BETTER DATA MANAGEMENT Issue No. 178 July 2016

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FoodLogistics.com

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2017 Super Duty® preproduction models shown. Available fall 2016. Some vehicles shown with optional features and aftermarket equipment. *Based on IHS Automotive, Polk 1985–2015 U.S. Class 1c-8 New Registrations, excluding SUVs.

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With a lineup that ranges from the flexible Transit Connect to the powerful F-650 and F-750, it’s no wonder Ford has racked up three decades of leadership. What does that mean for you?

It means whatever you do for work, you can bet there’s a Ford commercial vehicle that can help you do it better. Find your perfect vehicle at ford.com/commercialvehicles.

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ON THE MENU

ON THE MENU

OCTOBER 2015 ISSUE NO. 171

JULY 2016 ISSUE NO. 178 COLUMNS

SPECIAL EDITION:

FOR STARTERS

SOFTWARE & TECHNOLOGY

Will Robots Save the Farm?

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The advance of ag bots and other technologies are fundamental to creating a sustainable food supply chain that can support greater demand from a growing world population.

IN THE FOOD SUPPLY CHAIN

COOL INSIGHTS

Continued Expansion for Global Cold Chain 12

Some recent cold chain developments worldwide are supporting cold chain shipments in the food sector.

FOOD (AND MORE) FOR THOUGHT

42 Harmonization in Food Safety—It Starts from Within

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FEATURES

T he AlwaysOn Supply Chain Arrives in Full Force

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The onus is on food producers and manufacturers to be stewards of food safety.

DEPARTMENTS

The 2016 Material Handling Institute Industry Report explores a convergence of evolving software and hardware.

Supply Scan 10 Food on the Move 41 Ad Index 8

S upply Chain Planning & Execution Toolkit Makes Strides

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Data among all supply chain modes can integrate, creating more capable management tools.

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F SMA Requirements Call for Better Data Management Software can help food supply chain players improve regulatory compliance.

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S oftware & Technology Innovation Empowers the Food Supply Chain

Logistics decision-makers have more tools at their disposal to improve efficiency.

WEB EXCLUSIVES • Guest Blog: Supply Chain Innovation Gets the Consumer Closer to the Farmer foodlogistics.com/12224309

• How Brexit will Impact the Food Industry foodlogistics.com/12227089

• Food Logistics’ Educational Webinar Series foodlogistics.com/webinars

Published and copyrighted 2016 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 10 times per year in January/February, March, April, May, June, July, August, September, October and November/December 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.

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www.foodlogistics.com

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A successful fresh food and beverage distribution demands first-class logistics.

This is why numerous enterprises worldwide opt for WITRON‘s systems.

Box Order System (BOS): Based on permanently increasing requirements within the fresh food, fruits and vegetable, and beverage industry, WITRON developed the patented Box Order System (BOS). BOS not only fulfills the high expectations in terms of product handling, but also sets new standards with regards to efficiency, order cycle time, picking speed, and ergonomics.

Be innovative • Be committed • Be successful

General contractor for the design, realization, and the operation of cost-effi cient logistics and picking systems for trade and industry. Design, IT, control engineering, mechanics, and service – all from one hand. www.WITRON.com 3721 Ventura Drive · Arlington Heights, IL 60004 · Phone: +1 847-385-6000 · Fax: +1 847-398-6140 · info@WITRON.com

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FOR STARTERS

FROM THE EDITOR’S DESK

WILL ROBOTS SAVE THE FARM? A SOWINSKI

Precision agriculture can be advanced by new technology— like the Rowbot, a small, self-driving agricultural robot, pictured above.

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ccording to the United States Department of Agriculture’s 2012 Census of Agriculture, the total number of American farmers continues to decline, while fewer new farmers are stepping up to take their place.

Contrast that with the forecast from the Food and Agriculture Organization of the United Nations, which warns that, in order to avoid mass malnutrition caused by a world population that will burgeon to 9.6 billion by 2050, we need to increase food production by 70 percent.

Currently, about 40 percent of the earth’s landmass is devoted to food production and the remaining land—mountains, deserts and ice fields—are hardly amenable to conventional farming.

That’s the challenge. The answer is a multi-pronged approach that includes everything from aquaponics to vertical farming and pinkhouses, reducing food waste and improving cold chain management. It also includes advancements ushered in with software and technology.

Take ag bots like Rowbot, a small, self-driving agricultural robot that travels between rows of corn applying nitrogen fertilizer to the plants and collecting data from the crops.

Teams of Rowbots can easily travel through 10-foot-high cornfields to apply nitrogen throughout the growing season and also seed cover crops following the harvest. Drones

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like the eBee from senseFly capture aerial data for monitoring and responding to crop health—for instance, helping farmers to apply the right amount of water and fertilizer needed to boost yields.

Precision agriculture is one aspect of the global food supply chain in which software and technology is making a big impact. Other innovations aim to reduce our reliance on animal protein and the myriad resources it takes to produce it.

Food created via a 3D printer is still in the starting phase, but it’s making progress. At Hotel Arts Barcelona’s restaurant Enoteca, the menu includes a dish called “sea coral” that features a puree of sea urchin printed in the shape of a coral frond, topped with whole sea urchins, caviar, hollandaise sauce, an egg and a foam of carrot.

Logistics and transportation providers are also rolling out services to improve visibility and provide predictive analytics. Maersk Line’s remote container management solution is creating smart reefer containers that provide intelligence on the condition of temperature-controlled freight, and advanced data on the status and state of reefer containers, which is slashing the time it takes to perform pre-trip inspections on the fleet.

We hope readers find some thought-provoking content in this special edition devoted to software and technology. Perhaps next year we will offer a virtual reality version.

Enjoy the read.

LARA L. SOWINSKI, EDITORIAL DIRECTOR LSOWINSKI@ACBUSINESSMEDIA.COM

DETAILS

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WWW.FOODLOGISTICS.COM PRINT AND DIGITAL STAFF Group Publisher Jolene Gulley Associate Publisher Judy Welp Editorial Director Lara L. Sowinski lsowinski@ACBusinessMedia.com Editor Ronnie Garrett rgarrett@ACBusinessMedia.com Managing Editor Elliot Maras emaras@ACBusinessMedia.com Associate Editor Carrie Mantey cmantey@ACBusinessMedia.com Web Editor Eric Sacharski esacharski@ACBusinessMedia.com Senior Production Manager Cindy Rusch crusch@ACBusinessMedia.com Creative Director Kirsten Crock Sr. Audience Development Manager Wendy Chady Audience Development Manager Angela Kelty ADVERTISING SALES (800) 538-5544 Associate Publisher (East Coast) Judy Welp (480) 821-1093 jwelp@ACBusinessMedia.com Sales Manager (Midwest & West Coast) Carrie Konopacki (920) 542-1236 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 of 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 P.O. 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 Email: ckonopacki@ACBusinessMedia.com AC BUSINESS MEDIA INC. Chairman Anil Narang President and CEO Carl Wistreich Executive Vice President Kris Flitcroft CFO JoAnn Breuchel VP of Content Greg Udelhofen VP of Marketing Debbie George Digital Operations Manager Nick Raether Digital Sales Manager Monique Terrazas

Published and copyrighted 2016 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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7/12/16 8:16 AM

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JULY 2016 | FOOD LOGISTICS

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SUPPLY SCAN

NEWS FROM ACROSS THE FOOD SUPPLY CHAIN Daily Updates at FoodLogistics.com

HERSHEY REJECTS MONDELEZ INTERNATIONAL’S $23 BILLION TAKEOVER BID

The Hershey Company rejected a $23 billion takeover bid by Mondelez International that would create the world’s largest confectioner, according to Reuters. The snub underscores the challenges Mondelez chief executive officer Irene Rosenfeld faces in wooing Hershey’s controlling shareholder, the Hershey Trust, a charity created by the eponymous company’s founder a century ago.

The maker of Hershey’s Kisses and Reese’s Peanut Butter Cups saw its shares trade above Mondelez’s bid of $107 per share in cash and stock, indicating investors expected a new offer. A merger of two of the world’s top five candy makers would add Hershey’s U.S. business to Mondelez’s global footprint. Earlier, a source said that Mondelez sought to provide assurances to Hershey that it would keep its name and preserve jobs. Mondelez sees little antitrust risk given the limited geographic overlap of the two companies’ businesses, the source added.

HONEYWELL TO ACQUIRE INTELLIGRATED FOR $1.5 BILLION

Honeywell agreed to acquire Intelligrated, a North American-based automated material handling solutions provider, in a transaction valued at $1.5 billion. Intelligrated’s 2016 sales are estimated to be approximately $900 million. The company brings a portfolio of warehouse automation, order fulfillment and software solutions with an extensive presence in North American e-commerce, retail, and food and beverage markets. Intelligrated co-founders Chris Cole and Jim McCarthy will continue to serve in leadership roles. Intelligrated will become part of the sensing and productivity solutions in Honeywell’s automation and control solutions business.

Intelligrated designs, manufactures, installs and supports conveyors, sortation solutions, palletizers, robotics, automatic storage and retrieval systems (AS/RS), warehouse execution systems, labor management software and order fulfillment technologies. The company additionally offers aftermarket support through its lifecycle support services group, providing maintenance, technology refreshing, modifications, system assessments, spare parts and track-driven training programs.

KION GROUP TO ACQUIRE DEMATIC FOR $2.1 BILLION

KION Group AG, one of the two largest suppliers of forklift trucks, warehouse equipment and related services, will become one of the leading global providers of intelligent intralogistics solutions by acquiring Dematic, an automation provider and specialist in supply chain optimization.

The KION Group agreed with funds managed by AEA Investors and Ontario Teachers’ Pension Plan as the sellers on this transaction to create a global provider with close to 30,000 employees, more than 6.7 billion euro in revenue for the calendar year 2015, and a strong profitability with a combined adjusted earnings before interest and tax (EBIT) margin of approximately 9.4 percent for this period.

After deductions for certain liabilities, the KION Group expects the purchase price for the shares to amount to approximately $2.1 billion, based on an enterprise value of Dematic of $3.25 billion. The transaction is subject to customary closing conditions and regulatory approvals, and is expected to be closed in the course of the fourth quarter of 2016.

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KEWILL WILL PURCHASE LEANLOGISTICS

Kewill Inc., a provider of software for supply chain execution, agreed to purchase LeanLogistics Inc. from parent Brambles Limited. LeanLogistics provides transportation solutions for shippers, with hundreds of transportation management system (TMS) customers across the U.S. and Europe, and a supporting network of over 14,000 carriers. The company’s cloud-based platform reliably manages and optimizes over $10 billion of annualized freight spend for its customers.

“We are absolutely thrilled to have LeanLogistics join the Kewill team. The solutions are feature-rich, highly scalable and managed by a skilled team, and we are excited to support the ongoing growth and investment in LeanLogistic’s platform. We believe our global platform will help accelerate LeanLogistics’ already impressive growth through leveraging our extensive European and Asian networks,” said Doug Braun, CEO of Kewill.

CAI BUYS HYBRID LOGISTICS INC. AND GENERAL TRANSPORTATION SERVICES INC.

CAI International Inc., a transportation finance and logistics company, acquired Hybrid Logistics Inc. and its affiliate company, General Transportation Services Inc., for a combined purchase price of $12 million, a portion of which is subject to the future performance of the companies.

Based in Portland, Oregon, the companies operate as asset-light truck brokers with a focus on flatbed truck and over-dimensional shipments.

The companies have 68 employees in six regional offices throughout the United States. www.foodlogistics.com

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FROM MOM-AND-POP TO BIG BOX, IT DELIVERS. Introducing the Yale® MPB045VG with retail delivery package.

Whether moving pallets of cans, cases or kegs, you need to get product from trailer to store efficiently and damagefree. That’s why we developed a potent mix of direct store delivery features, including a patent-pending handle design for maximum maneuverability in tight spaces and industry exclusive UL-recognized lithium-ion power for convenient charging on the go.

Visit yale.com to learn about all the retail delivery features available on the Yale® MPB045VG.

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LOGISTICS TRENDS IN OUR INDUSTRY

U.S. PORTS AND TERMINALS TO PROVIDE CONTAINER WEIGHT VERIFICATION; SHIPPERS RAISE SOME CONCERNS

As the new Safety of Life at Sea (SOLAS) verified gross mass container weighing regulation took effect in July, the majority of the nation’s largest container ports and terminal operators agreed to provide truck scale weights to allow business at the busiest facilities to continue uninterrupted, according to reports.

Some shippers said procedures vary from port to port, meaning there could be delays.

Class I railroads in the United States and Canada do not, as a rule, provide weight information to the ocean terminal upon arrival at on-dock Image courtesy of A.N. Deringer’s Twitter feed at www.twitter.com/anderinger. facilities, according to The American Journal of Transportation. Ports and terminals in the United States will be adopting different strategies for addressing the issue of on-dock rail exports.

PANAMA CANAL EXPANSION TO DOUBLE CARGO TRADE

The Panama Canal Authority estimated that the combined effect of 12 to 14 larger Panamax vessels per day (an average of approximately 4,750 ships a year), along with continued smaller vessel transits, will double capacity, increasing canal throughput from 300 million tons to 600 million tons per the Panama Canal Universal Measuring System (PCUMS), according to a shipping risk management briefing from Allianz Global Corporate & Specialty. The expanded canal, which opened June 26 increased the maximum vessel capacity and enlarged the overall volume of transported freight.

Image courtesy of http://www.porttechnology.org (Source: Gold is Money).

FOOD ON THE MOVE

DAT SOLUTIONS’ MONTHLY FREIGHT REPORT

Seasonal Produce Pushes Refrigerated Freight Northward By Mark Montague Mark Montague is an industry rate analyst for DAT Solutions, which operates the DAT network of load boards and the RateView rate analysis tool. He has applied his expertise to logistics, rates and routing for more than 30 years. Montague is based in Portland, Oregon. For more information, please visit www.dat.com.

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There’s no better way to gauge seasonal inspection event in which, on average, freight picked up a penny to $1.94 a mile. shifts in produce than to look at refrigerat17 commercial vehicles are inspected evRates are derived from DAT RateView, ed freight patterns on the spot market. ery minute and one in four is found to have which provides real-time reports on preIn California, vegetables and tree fruit at least one out-of-service violation. vailing spot market and contract rates, as are moving now with grapes coming soon An imbalance between demand (load well as historical rate and capacity trends. (and this year could be a record harvest), posts) and capacity (truck posts) contributed All reported rates include fuel surcharges. while reefer rates in the northern market to a 29 percent increase in the refrigerated For the latest rate trends, please visit are waking from an extended springtime load-to-truck ratio, from 4.6 to 5.9 loads per www.dat.com/trendlines or join the conhibernation. truck. The national average rate for reefer versation on Twitter with @LoadBoards.

During the week ending June 11, the average outbound rate from Fresno, 20.0 California, was $2.21 a mile, 17.5 up 8 cents compared to the previous week. Los Angeles 15.0 jumped 11 cents to $2.59 2016 2015 2014 12.5 a mile.

Meanwhile, nearly 10.0 all lanes out of Florida lost traction: Lakeland, 7.5 Florida-to-Charlotte, North 5.0 Carolina, fell 24 cents to $1.66 a mile during the week, 2.5 the region’s largest decline.

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC The big rate swings were The load-to-truck ratio is the number of load posts divided by the number of truck posts accompanied by tighter capacity during Roadcheck, held on DAT load boards. It is a real-time indicator of demand and available capacity on the spot truckload freight market. ©2016 DAT Solutions. All rights reserved. Source: http://www.dat.com/trendlines June 7 to 9. Roadcheck is an annual 72-hour truck and bus

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DAT NATIONAL AVERAGE REEFER LOAD-TO-TRUCK RATIOS

www.foodlogistics.com

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Live Area – 7.375” x 10.25” Trim Size – 7.875” x 10.75” Bleed Size – 8.125” x 11”

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COOL INSIGHTS

BY LARA L. SOWINSKI

CONTINUED EXPANSION FOR GLOBAL COLD CHAIN A SOWINSKI

With its recent expansion in Memphis, FedEx is expanding its global network to protect frozen, refrigerated and controlled temperature products as they move through the cold chain.

ccording to P&S Market Research, the global cold chain market is forecast to expand at a compound annual growth rate (CAGR) of 12.1 percent during 2016 to 2022. Fish, meat and seafood currently account for the largest share of the market, while dairy and frozen desserts are expected to log the fastest growth over the six-year period.

The firm also notes that India surpassed the cold chain capacity of the United States in 2014 and became the largest cold chain market by capacity (139 million cubic meters compared to 119 million cubic meters in the United States), while China ranks as the third largest cold chain market by capacity (82 million cubic meters).

Here are some recent cold chain developments worldwide that are supporting cold chain shipments in the food sector, as well as other temperature-controlled cargoes …

American Airlines Cargo Expands TempControlled Facilities American Airlines Cargo recently expanded temperature-controlled facilities at Dallas/Fort Worth (DFW) and San Juan, Puerto Rico, to handle increasing volumes of perishable food, pharmaceuticals and flowers.

The carrier’s DFW facility was expanded to 4,000 square feet from 1,800 and boasts a drive-thru. DFW is a gateway for Latin American products like asparagus, berries, Chilean salmon and fresh flowers to consumers in Europe and Asia.

In March, the carrier opened a new 600-square-foot area to its existing cold storage space in San Juan, bringing the total to 1,000 square feet. The two separate but interchangeable areas can house temperature-sensitive products from 15 to 25 degrees Celsius or 2 to 8 degrees Celsius.

Construction Underway on Port of Rotterdam Facility AGRO Merchants Group is building a new 9,000-square-meter facility (expected to open in December) at the Port of Rotterdam with 18,000 pallet positions for handing imports and exports of chilled and frozen products. The facility will feature mobile racking and pallet conveyor systems with additional space for product repacking, blast freezing and tempering. It will also be Building Research Establishment Environmental Assessment Method Excellent-certified—the highest energy-efficiency classification for European cold storage facilities.

According to the company’s group president, Carlos Rodriguez, “This is phase one of the development in which we expect to double capacity in the next two years.”

Port of Savannah Boosts Cold Storage Capacity The Port of Savannah will get additional cold storage capacity

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once PortFresh Logistics opens a new 100,000-square-foot facility 15 miles from the port’s Garden City Terminal this summer. The facility will feature multiple climate zones, and both imports and exports.

The Georgia-based company will capitalize on the U.S. Department of Agriculture’s program that allows imported citrus fruit, grapes, blueberries and other produce from South America to undergo cold treatment during the ocean voyage to kill pests, which expedites shipments destined to the United States.

PortFresh Logistics CEO Brian Kastick said, “We believe the growing population of the U.S. Southeast, government policy changes and perishable industry consolidation will break open significant pent-up demand for the new perishable supply chain gateway built around the Port of Savannah.”

FedEx Cold Chain Center Protects TempControlled Products During Delays The FedEx Cold Chain Center Memphis, which opened in March, is designed to protect perishable food, pharmaceuticals, and other frozen, refrigerated and controlled temperature products when they’re delayed in transit through the hub.

The $25 million, 20,000-squarefoot facility has separate areas for health care shipments and other perishables, such as food and flowers, and offers storage within three different temperature ranges: frozen (-13 to -14 degrees Fahrenheit), cold (35.6 to 46.4 degrees Fahrenheit) and controlled room temperature (59 to 77 degrees Fahrenheit).

www.foodlogistics.com

7/11/16 10:19 AM

How can automation uplift the human spirit?

By achieving unfathomable levels of efficiency through systematic accuracy ensuring the perfect wine arrives from the warehouse to your table every time.

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SPECIAL EDITION:

SOFTWARE & TECHNOLOGY

BY ELLIOT MARAS

THE ALWAYS-ON SUPPLY CHAIN ARRIVES IN FULL FORCE T he always-on supply chain is • Predictive analytics.

The 2016 a reality.

Enhanced comput• Robotics and automation.

Material ing power is improving pre• Sensors and automatic Handling dictive analytics and supplemental identification.

Institute tools, such as automation and • Wearable and mobile technology.

Industry wearables. Sensors are empowering data collection.

These enhance• Driverless vehicles and drones.

Report ments are creating digital, continu• Inventory and network Technology innovations driving better integration across The shift from physical to digital supply chains explores a areously operating chains and optimization tools. platforms, transforming industries and changingsupply consumer The transformation to a digital supply chain alters the convergence interconnected networks of supply • Cloud computing and storage. expectations.

Some examples include: fundamental characteristics of traditional models. For • 3D printing. of evolving chain workers. example, automated equipment and sensors are enabling Predictive analytics: A leading foodservice data provider Institute’s The Material Handling The report wasincreases developed rapid and accurate dataMHI collection.

Massive in software and scrapes menus for taste preferences in order to help computing power have led to the increased use of predictive (MHI’s) 2016 Annual Industry in collaboration with Deloitte Conconsumer product companies predict what products to hardware. tools such as wearables have created the of Report defines the always-onanalytics. supplyNewsulting LLP and reflects the views create, how much and where they need to be shipped, and connected supply chain worker. All of these developments as:to“An set of nearly 900 industry insiders—nearwhat types of raw materialschain will need be integrated sourced. have completely changed the game, giving rise to always-on supply networks characterized bychains. ly double that of last year’s survey. supply Common characteristics include: Streamlined ordering: A leading specialty retailer’s a continuous, high-velocity flow of Respondents included manufactur• Geophysical space has become less relevant locations order supplies through an online catalog. From • Managing availability versus managing scarcity information and analytics, creating ers, distributors, service providers there, the smart system pulls inventory from the company’s • Two-way flow of data and information versus one-way and others—more than half with warehouses or distributionpredictive, centers. It canactionable also send a decisions that flow of physical goods (see Figure 4) purchase order to an external vendor for fulfillment. better serve the customer.” • Consumers/customers senior executive, general manager as data creators (for example, The report provides an update or department head titles. through crowdsourcing) Anticipatory shipments: A leading e-commerce retailer exchanged for informationto a digital on eight technologies that are• Physical assets The transformation patents a technique to determine where to box and ship • Cross-ecosystem collaborative networks Figure 5) enabling these always-on supply supply chain alters the(see characterproducts based on a predictive model of customers in a chains and impact they are istics of traditional models. For specific region, with a positive impact on the planning, sourcing, and delivery. having on these supply chains. example, automated equipment

These technologies include:

and sensors enable faster and more

Figure 4. Physical to digital flows Physical

Customers

Processes

Assets and Machinery

Different actions are taken to better drive value

Continuous and automated readings by sensors

Fielded Products

Digital 10101100 01010101

Readings translated into digital data

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PHYSICAL TO DIGITAL FLOWS Analytics reveal trends and patterns

Source: Deloitte University Press | DUPress.com

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Data is aggregated and processed

accurate data collection. Increased computing power leads to the greater use of predictive analytics.

Supply Chain Characteristics Characteristics of always-on supply chains include: • Geophysical space becoming less relevant.

• Managing availability versus managing scarcity.

• Two-way flow of data versus one-way flow of physical goods (see Figure 1).

• Consumers/customers becoming data creators (for example, through crowdsourcing).

• Physical assets being exchanged for information.

• Cross-ecosystem collaborative networks (see Figure 2).

The shift to always-on supply chains is accelerating the scale, scope and depth of data they generate. This data generates value only when it is used to modify future action in helpful ways. The modified action provides new information, allowing the learning process to continue, and creates a value loop that moves from hindsight to insight to foresight. The steps within the value loop are envisioned as follows: • Action creates information communicated from point of generation to point of processing.

• Information is aggregated, creating data sets for analysis and generation of prescriptive actions.

• These prescriptions guide modified actions.

• New action is then sensed, creating new information, and the cycle repeats.

Source: Material Handling Institute

www.foodlogistics.com

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2 CROSS-ECOSYSTEM COLLABORATIVE NETWORKS

Figure 5. Cross-ecosystem collaborative networks

Delving into specific industries, sensors and automatic identification is an enabling technology in the cold chain, delivering the ability to manage and monitor quality remotely.

Predictive analytics and drones are enabling technologies in agriculture, providing smarter irrigation and targeted application of chemicals.

Inventory and network optimization tools are enabling technologies in direct-to-consumer industries, bestowing anticipatory shipping based on predicted demand, and alternate shipping modes and ship-to locations using drones and drop boxes.

Inventory and network optimization adoption may more than double to 90 percent over the next six to 10 years. Route planning, product flow path analysis and asset optimization help companies streamline operations, improve inventory control, gain visibility, manage risk and reduce costs.

Competitive Advantages Arise More respondents this year indicated these technologies may be a source of competitive advantage or a source of supply chain disruption in the next decade: 83 percent believed this in the recent survey compared to 75 percent last year.

Respondents considered each technology to be an even greater source of competitive advantage and disruption than just one year ago.

The technologies that respondents said can be a source of either disruption or competitive advantage are: • Robotics and automation (51 percent, up from 39 percent last year).

• Inventory and network optimization tools (48 percent, up from 45 percent last year).

• Sensors and automatic identification (47 percent, up from 42 percent last year).

• Predictive analytics (44 percent, up from 38 percent last year).

Robotics and automation, and driverless vehicles and drones both

www.foodlogistics.com

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An ofof supply networks characterized by a high continuous flow of information and analytics An integrated integratedsetset supply networks characterized by avelocity, high velocity, continuous flow of information and creating predictive, actionable decisions and which better serve the “customer” and generate economic rents

analytics creates predictive, actionable decisions, which better serve the customer.

• Rapid prototyping with 3D printing • Fast deployment with cloud-based technologies R&D and design • Crowd-sourcing research and idea generation

Hindsight Plan

R&D and Design

Source

Digital Supply Networks

Plan

Insight Source Make

Support

Make Sell and Deliver

Foresight Analytical tools across the end-to-end value chain improve the ability to describe, predict, and exploit relationships among phenomena based on the data captured using the sensors Source: Deloitte University Press | DUPress.com

• End-to-end visibility to shape demand planning • Analytics/sensor-driven suggested replenishment • Virtual control towers

• Mobile approvals for purchasing • Automatic price-matching based on analytics

• Additive manufacturing • Virtual build simulation • IOT-enabled reliability centered maintenance

• Product traceability and inventory control • Manage and monitor product quality information Sell and deliver • Dynamic re-routing

Support

• “See what I see” maintenance • Proactive sensing and quality control • End-of-life visibility and return channels

Source: Material Handling Institute

led in their perceived ability to create either supply chain disruption or competitive advantage, with a 12 percent growth since last year.

Cloud computing and storage lead in adoption rates at 45 percent, followed by sensors and automatic identification at 44 percent.

Six of the eight technologies have predicted adoption rates of 74 percent or higher over the next six to 10 years. Driverless vehicles and drones, and 3D printing have predicted adoption rates of 50 percent and 48 percent, respectively, over the same period.

there, the smart system pulls inventory from the company’s warehouses or distribution centers.

It can also send a purchase order to an external vendor for fulfillment.

Anticipatory shipments.

An e-commerce retailer patents a technique to determine where to box and ship products based on a predictive model of customers in a specific region, with a positive impact on planning, sourcing and delivery.

Forty-three percent (up from 36 percent last year) of respondents saw the lack of a clear business case as the major barrier Innovations Transform to investment in supply chain Expectations innovation, followed by lack of adeThe 2016 MHI Annual Industry Report Accelerating change: How innovation is driving digital, always-on supply chains Technology innovations are quate talent to utilize technologies improving integration across plateffectively (38 percent) and cultural forms, transforming industries and aversion to risk (35 percent). changing consumer expectations.

Fifty-eight percent of responSome examples include: dents said they face a significant Predictive analytics. A foodserchallenge in hiring and retaining a vice data provider sources menus skilled supply chain workforce (see for taste preferences in order to Figure 3 on Page 16). Additionally, help consumer product companies 56 percent (up from 53 percent predict what products to create, last year) said that training their how much and where to ship, and workforce to use new technologies what types of raw materials need to is a top priority. be sourced.

Other challenges include customStreamlined ordering. A er demand for faster response times retailer’s locations order supplies (57 percent, up from 50 percent through an online catalog. From last year) and customer demand for

JULY 2016 | FOOD LOGISTICS

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processing power. Some of the most effective applications focus on predicting patterns associated with consumer behavior.

Sensor lower delivery cost (56 percent, up In the supply chain arena, predictechnology is from 51 percent last year). tive modeling enables managers to especially applicable Barriers to Adoption better control inventory, plan more in logistics because Cost continues to be cited as a reliable transportation networks and the volume of barrier to technology adoption. minimize lead time variability. This shipments is Costs include deployment of autocan improve service levels, reduce going up mation and sensors, plus maintecosts and boost the bottom line. significantly.” nance of the networks and storage One of the main objectives of Scott Sopher, Deloitte space required to collect and supply chain management is to Consulting LLP communicate the data generated. minimize variation, the enemy of efThere is also the cost of investing in ficiency. In traditional supply chains, analytic tools and skills. by the time variation is identified, Despite the challenges, more it is too late to avoid disruption. respondents cited a faster return The information provided by the on investment as technology costs Internet of Things (IoT), on the decrease. The cost of sensors is other hand, allows supply chains to declining. The cost of moving data invest less in eliminating variation over networks and securing storage since timely and effective responsspace is also falling. es become possible.

Predictive analytics is a critical The IoT refers to a suite of techenabler of always-on supply chains. nologies—sensors, communication It is changing how people interact devices, servers, analytics engines, Barriers to adoption – Fully 43% (up from 36% last year) 53% last year) say that training their workforce to use new with machines.

Predictive analytics thatOther automatically identify of respondents believe the major barrier to investment in technologies is adevices top priority. significant challenges is lack theofmodeling of data items andfordecision-making aids—that supply chain innovation is the a clear business case,to identify include customer demand faster response times (57%, followed by lack of adequate talent to utilize up from 50% last year) customer demand for lower patterns thattechnologies help predict behavcan linkandthe physical and informaeffectively (38%), and cultural aversion to risk (35%). delivery cost (56%, up from 51% last year). iors and events—from inventory tion worlds more closely together. depletions to machinery breakThe IoT creates non-linear ways to Supply chain challenges – In order to successfully Investments – More manufacturing and supply chain downs to consumer trends.

It relies manage traditionally linear steps, implement any of these technologies, companies need companies are upping their financial commitment to access to a skilled workforce. to the thisthrough innovation. New technology ways investments totalling value. onAccording the ability tosurvey, crunch expanding to generate is the biggest obstacle facing supply chainamounts professionals, over $1 increased 49% are a year agoin enormous of data and it ismillion have The more from sensors put with a full 58% of respondents indicating that they face a to 52% today. Three percent of respondents plan to truly coming into its own with the place, the greater the volume of significant challenge in hiring and retaining a skilled supply spend over $100 million. exponential increase in computer data produced to support the chain workforce (see Figure 2). Additionally, 56% (up from

SOFTWARE & TECHNOLOGY

continued

Figure 2. Challenges for organization’s supply chain 3 CHALLENGES FOR ORGANIZATIONS’ SUPPLY CHAINS Hiring and retaining a skilled workforce

11%

31%

Customer demands for faster response times

10%

33%

Customer demands for lower delivered costs/pricing

11%

Increasing competitive intesity, rising customer service expectations

11%

Customer demands for more customized products and services

37%

Increasing volatility of supply, including supply chain disruptions

Customer demands for more supply chain transparency/sustainability 0% Not Challenging

Somewhat Challenging

24%

41%

20% Very Challenging

40%

8%

26% 34%

33%

12%

31%

49% 34%

10%

30%

40%

19%

Customer demands for smaller, more frequent shipments

14% 34%

40%

22%

Increasing number of products

22%

38% 41%

18%

16%

34%

20% 60%

Extremely Challenging

80%

Sensors Enable Higher Volumes “Sensor technology is especially applicable in logistics because the volume of shipments is going up significantly,” says Scott Sopher, principal and leader at Deloitte Consulting LLP’s global supply chain practice. “Sensors also increased the shipment of fresh goods due to visibility, and of pharmaceuticals and other sensitive goods due to great security.”

Two-thirds of survey respondents identified wearables and mobile as a critical, high or moderate priority. One reason is that, as wearables become more robust and specialized technology is developed for enterprise applications, the potential to transform operations across the value chain increases. In addition to enhanced employee oversight and assistance, wearables can reduce operating costs. Wearables can also provide employees with hands-free access to information.

Cloud Computing and Storage

27% 41%

32%

14%

Increasing volatility of demand

31%

always-on supply chain. The analysis of this data can drive not only operational improvements, but also decisions of workers, customers and trading partners.

The declining cost of sensors and scanning devices makes it possible to install them in more locations, which means additional tracking of materials.

6% 8% 6% 100%

Cloud computing and storage are also playing a role in the improvement of supply chain management by supporting an enterprise’s efforts to share data with multiple, geographically dispersed partners.

Cloud computing did not rank as high as other technologies in either competitive advantage or disruptive dimensions. Only 25 percent of the respondents believed there could be a competitive advantage, while a mere 4 percent thought it may be disruptive.

For more information about the report, please visit www.mhi.org.

Source: Material Handling Institute

Source: 2016 Survey results

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SPECIAL EDITION

SOFTWARE & TECHNOLOGY

BY ELLIOT MARAS

SUPPLY CHAIN

PLANNING & EXECUTION T

MAKES STRIDES Data among all supply chain nodes can integrate, creating more robust management tools.

18

FOOD LOGISTICS | JULY 2016

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T

oday’s food supply chain planning and execution tools allow service providers to grasp changing customer needs and respond to them fast enough to guarantee satisfaction, enabling the organization to operate efficiently and sustainably. Each node along the chain—growers, processors, packagers, distributors, retailers and transporters—can function at a speed and level of accuracy not imagined five years ago.

As software tools improve, the different nodes in the supply chain are increasingly integrating data systems with one another to a degree not previously witnessed.

The growing demands for quality, safety, transparency and visibility are driving Companies this change. have done a Inforterrible job with mation transparency.” technology (IT) providers John Bilbrey, are ensuring The Hershey Company that supply chain management systems integrate with just about every business function. Software tools continue to adapt to a rising array of material handling sensors to ensure all relevant data gets included in the supply chain manager’s toolkit.

A series of interviews with food supply chain decision-makers confirms that the always-on supply chain is already a reality. The always-on supply chain concept, articulated in the Material Handling Institute’s 2016 Annual Industry

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N TOOLKIT Report on Page 14, notes these networks deliver a continuous, high-velocity flow of information and analytics, creating predictive, actionable decisions that better serve the customer.

Software providers introduce new modules to give customers faster and easier access to information that allows them to execute tasks more effectively. Some of the newer offerings allow IT manag-

ers to provide departments with key reports more quickly so that department heads spend less time organizing information, and more time analyzing and acting on it.

The power of analytics, along with the expanding digital capabilities of cloud-based solutions, is delivering more robust insights for supply chain operations.

Some companies are reporting data that once took as long as two

weeks to generate is now available in minutes. Analysts are also able to generate their own reports without having to rely on IT departments.

Companies can do things like improve forecast accuracy by identifying biases in how forecasts are created. Sales, for instance, can bias forecasts.

The Hershey Company, a global confectionery and snacks manufacturer, witnessed consistent market share growth thanks to its ability The SAP S/4HANA to derive insights from data, according to John Bilbrey, chairman, ERP connects devices and people in real time, president and CEO. allowing tasks to be The compaaddressed in real time. ny recently signed on to implement SAP’s S/4HANA enterprise resource planning (ERP) platform to help its em-

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SOFTWARE & TECHNOLOGY

continued

ployees move from being reporters of data to active real-time decision-makers, basing decisions on data integration from both internal and external sources.

When asked what area of the business gained the most from his enterprise connectivity vision, Bilbrey’s answer was the supply

chain. Improved visibility allowed the company to avoid 20 million pounds of otherwise wasted corru-

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gated cardboard in shipping and merchandising.

And, the company is looking forward to even more end-toend visibility into the supply chain as the ERP initiative progresses.

Bilbrey says the company also has a better handle on how consumer relationships with food are changing. Hershey can now provide more transparency about its products to consumers. “Companies have done a terrible job with transparency,” Bilbrey says.

Food Maker Improves Fulfillment Goya Foods Inc., a Hispanic food manufacturer, packager and distributor, found demand planning and warehouse management software critical in expanding its fulfillment capabilities, says Peter Unanue, executive vice president.

Eighty-five percent of the company’s business is in direct store delivery, but the company plans to expand into e-commerce, allowing customers to order food online and have it shipped to them.

With eight manufacturing facilities and 12 warehouses, Goya Foods was able to improve its store delivery performance from 94 percent to 99 percent in the past five years, Unanue says. By deploying JDA Software Group Inc.’s demand planning, fulfillment, order optimization and demand classification modules, the company was able to reduce its inventory by 20 percent while improving service in the fiveyear period.

“Suppliers are being asked to acknowledge orders in a timelier manner, provide accurate shipping and delivery information, and furnish earlier notification of pricing discrepancies,” says Peter Zaballos, senior vice president and chief marketing officer at SPS Commerce Inc., a supply chain solutions provider.

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Continued pressure on profit margins has companies looking deeper into how their operations run and how much money is tied up in which process. Zaballos adds: “We see a lot of interest from grocers and foodservice distributors looking at warehouse operations to further automate the receiving process. The goal is to lower safety stock and on-hand inventory.”

Supply chain Where strategies can ensure trust beyou tween partners position that orders ship the inventory in full and on time, Zaballos is critical, says. Improved so you can collaboration use it both in between foodservice partners covers or retail and order status, e-commerce order discrepif necessary.” ancy resolution Henry Canitz, Logility and sharing sell-through data from a point-of-sale system so that both parties can take advantage of changing consumer buying patterns.

While management tools are evolving, the relationships among supply chain partners are changing as consumer needs also evolve. The most visible change is e-commerce, which requires multi-channel fulfillment. Other changes include the expansion of foodservice at the expense of retail and ongoing growth in convenience stores.

With e-commerce expanding, distribution strategies are becoming more diverse. The need to support more distribution channels requires more processes.

delivering products,” says Henry Canitz, product marketing director at Logility, a software provider.

“You don’t want to have dedicated inventories for an e-commerce channel, especially when you have shelf-life issues,” he says. “You have to be able to use that inventory in other ways if demand doesn’t show up. You have another demand stream you need to include into your planning and maintain the flexibility.”

“Where you position the inventory is critical, so you can use it both in foodservice or retail and e-commerce if necessary,” Canitz notes. “If you use a multi-echelon inventory optimization solution, you’re able to optimize the waves, and where and how much inventory you’re storing to be able to meet the demands of all of your channels,” he says.

Some food manufacturers are finding centralized distribution

How to Leverage Inventory Companies that embrace e-commerce are finding that data requirements extend beyond order fulfillment and delivery. “From an e-commerce standpoint, a lot of food companies are focusing more attention on providing their customers resources around recipes versus ordering products and

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SOFTWARE & TECHNOLOGY

Analytics and cloud-based solutions are allowing department heads to create their own reports without having to rely on the information technology department.

continued

more efficient than direct-store delivery (DSD). While this is not necessarily a technology-driven trend, changing market conditions have to be considered in supply chain planning.

“There is a macro trend for more sophisticated convenience stores with a broader assortment of products and more fresh foods,” says Chad Collins, chief operating officer at HighJump, a software company. “This is actually driving

higher penetration of DSD as DSD tends to be a primary replenishment model for convenience stores.”

One of the biggest factors driving supply chain optimization is the proliferation of SKUs, Collins says. In response to consumer demand for natural and organic products, many food manufacturers are diversifying their offerings, resulting in a broader set of products to manage.

“Often these new products don’t have historical demand patterns and it can be difficult to accurately manage inventory levels,” Collins says. “As consumers become more accustomed to purchasing food online, we will see food manufacturers ship smaller quantities, and more frequently, to manage e-commerce replenishment cycles.”

“Managing productivity and profitability is a key in the food supply chain,” says Joe Scioscia,

vice president of sales at VAI, a software provider. “An essential key performance indicator (KPI) for manufacturing is the amount of product produced. The count (good or bad) typically refers to either the amount of product produced since the last machine changeover, or the production sum for the entire shift or week.

“Many companies compare individual worker and shift output to invoke a competitive spirit among employees,” Scioscia continues. “For distributors, picking and shipping accuracy, and productivity, is the key to getting vehicles loaded and on their way.”

Everyone agrees that today’s technology offers more opportunities to improve service and efficiencies. The expansion of software capabilities, however, tasks decision-makers to a greater degree.

The Extended Enterprise Arrives Sesh Rao, Ph.D., senior product director for supply chain management at Infor, a software provider,

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refers to the move as the extended enterprise and digitizing the extended enterprise. The extended enterprise includes the manufacturer’s supply chain, as well as that of its trading partners, vendors, distributors and retailers. The new availability of information is making it imperative to drive the planning and execution faster and more completely.

“The customers are demanding more in terms of what’s in their food … where it is sourced from. To get that response and that kind of traceability requires a pretty good integration between planning and execution,” Rao says.

If there are any changes to be made in the movement of product, supply chain players would benefit immensely from executing these changes immediately. “If there’s a supply disruption, if there’s an inventory imbalance, if there is a shipment reallocation that needs

GS1 GLOBAL STANDARDS TO CHANGE FOOD DISTRIBUTION Chris Anatra, president of NECS Inc., which provides software for food distributors, believes the GS1 global standard for foodservice distribution is one of the most significant market forces affecting the foodservice industry. “All foodservice suppliers must be aware of this and what’s soon coming,” he says. GS1 is a global organization that develops and maintains voluntary standards for supply and demand chains across multiple sectors.

All All foodservice distributors will need to know their Global Trade Item foodservice Number (GTIN) for every item they sell. “Their internal item numbers are suppliers must going to become meaningless as the industry adjusts to these global standards,” he says. be aware of Anatra explains, once distributors have the GTIN, they can obtain: this and what’s official item images from the manufacturer; official brand logos; allergens; soon coming.” nutritional data; ingredients; pallet configurations; case dimensions; weights; official item descriptions; classes; pack sizes; manufacChris Anatra, NECS Inc. turers’ product codes; kosher, gluten-free, wheat, sulphite, soy, etc. content; shelf lives; storage temperatures; expanded benefits descriptions more fully explaining the items; and hundreds of other details.

Foodservice distributors will also need to obtain a Global Location Number (GLN) for each of their warehouse locations. “This will allow for traceability in the supply chain,” Anatra says. “In fact, the location of each restaurant, grocery store, etc. that purchases this item will need to have a GLN. And, of course, the manufacturing facility needs one as well.”

Furthermore, distributors will need access to the Global Data Synchronization Network (GDSN) that holds all of this data.

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JULY 2016

| FOOD LOGISTICS

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SOFTWARE & TECHNOLOGY

There’s a lot of data that provides a new chance to give

real-time analytics.”

Sesh Rao, Infor

24

continued

to be done, then people would actually like to do that now,” he says. “There’s no longer that luxury of generating a plan, then the plan gets refreshed once a day or maybe twice a day,” Rao says. “There is this whole need of trying to do the plan and replan in a very agile way, integrating planning with execution.

That is a fundamental shift. If I don’t do it, I lose the opportunity. That’s the difference these days.”

“There’s a lot of data that provides a new chance to give real-time analytics,” Rao continues. For example, in forecasting, it’s not just a matter of looking at a historical forecast. There is a lot of unstructured data in the network, such as Facebook likes, Twitter feeds, portal visits, omnichannel buying and other information, that now needs to be factored in .

Today’s decision-makers are challenged to find software that can analyze all of the critical components of their supply chain at the same time, says Tony Blasetti, an associate partner for supply chain solutions at IBM Corporation.

Because of the number of variables in supply chain operations, analysis requires highly complex algorithms, and even then, true optimization is not achievable.

Blasetti describes supply chain planning today as a “highly complex, multi-variable challenge involving suppliers, service providers, inventory, transportation, distribution, capital funds, labor and customer relationships.”

“If you have a good sales and operations planning (S&OP) system linked to your product development process, you can show how a product was developed from the inception of an idea to manufacturing and where the materials are sourced from, providing reliable supply chain traceability for food ingredients and allowing companies to quickly address product safety concerns,” says George Young,

FOOD LOGISTICS | JULY 2016

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HOW DATA VISUALIZATION SOFTWARE EMPOWERS FOOD SUPPLY CHAINS Data visualization software makes it easy in any work environment to provide interactive maps, charts and infographics displaying the most important KPIs to all who need to know. Such tools improve visibility to manufacturers, distributors, retailers and other supply chain players. Users can import data from various sources for conducting analyses using dashboards.

Many warehouses are finding it useful to have digital screens mounted in strategic locations to allow pickers to monitor their own performance, says Kerwin Everson, vice president of supply chain solutions at RMG Networks, a provider of data visual solutions. The software can collect data from disparate systems and organize it in visual formats to make the data actionable.

Warehouse work stations that can utilize such tools include receiving, replenishing, picking, inducting, sorting, packing, shipping and more.

“We see unique needs for unique data,” Everson says. “While they’re planning that warehouse or distribution center layout, why not plan for unique visibility into the supply chain? The more you get this out there, where the action is happening, the more it impacts your visibility and performance, and therefore, ultimately, your bottom line.”

a founding partner at Kalypso, a global consulting firm.

He says Oracle’s Demantra software, especially when combined with product lifecycle management (PLM) software, provides full supply chain traceability.

Young says the demand management software has algorithms tailored to discrete manufacturing and processing industries. “You can do what-if scenarios; you can figure out where things should go under certain scenarios,” he says.

For example, if a food manufacturer expands to a new territory, an ERP solution would allow it to figure out costs and how to manage the distribution serving the new territory. It could take weeks to run 20 to 30 distribution scenarios.

“With something like Demantra advanced planning software, you could put in all the different parameters and the software has built-in

optimization algorithms. You could simultaneously optimize on a number of different factors, including cost, time, number of events and so on, accelerating the analysis of multiple scenarios and identifying the optimal distribution option.”

With such a system, a user can run the algorithms and get one answer. “You can have the answer more quickly with greater detail and make better decisions,” Young says. “If you are just relying on core ERP to perform a similar analysis, you are looking at a much more time-consuming process and results that carry a greater fallacy risk due to high human involvement in analysis setup and data manipulation versus automated optimization analysis processing like with Demantra. Because of this, many companies that don’t have a demand planning solution don’t perform this type of analysis at all.”

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7/12/16 8:16 AM

SPECIAL EDITION:

SOFTWARE & TECHNOLOGY

BY ELLIOT MARAS

FSMA REQUIREMENTS CALL FOR

BETTER DATA MANAGEMENT Software can help food supply chain players improve compliance.

NO 39%

F

ood supply chains are rapidly embracing technology as data volumes accelerate.

While a host of factors are fueling the data explosion, the newly enacted food safety rules are pressing supply chains especially hard. Many companies are reviewing, if not overhauling, data management systems to comply with the Food Safety Modernization Act (FSMA).

The FSMA expands the Food and Drug Administration’s (FDA’s) enforcement authority to achieve higher rates of compliance with prevention- and risk-based food safety standards, and provides a means to better respond and contain problems. The law requires more extensive documentation and recordkeeping for supply chain players.

Many food companies have outdated informa-

YES

tion management systems that hinder their ability to meet FSMA requirements.

An assessment on the 36% food industry’s readiness to meet FSMA requirements by Deloitte Consulting LLP, a business research and analysis consulting firm, found that many companies lack the visibility and analytical capabilities to enhance quality assurance and control processes.

Some companies lack a centralized or integrated document management process, making it difficult to respond to the law’s 24hour records access requirement.

In addition, many companies’ analytics capabilities cannot support

61%

WE ARE PREPARED TO MEET FSMA REQUIREMENTS IN 2016

NO

YES 37%

WE BELIEVE AUTOMATION OF QUALITY AND SAFETY PROCESSES WILL YIELD A POSITIVE IMPACT Source: Sparta Systems online survey of 150 U.S. food and beverage professionals

proactive sensing to identify food quality issues in a sufficient time frame. Not all assessments about FSMA readiness are as alarming as Deloitte’s, however.

Survey Measures FSMA Readiness A survey by Sparta Systems Inc., a provider of enterprise quality management software, found that a majority (61 percent) of food and beverage (f&b) professionals in the United States feel confident that their organizations are prepared to meet FSMA requirements.

Source: Sparta Systems online survey of 150 U.S. food and beverage professionals

26

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www.foodlogistics.com

7/11/16 9:52 AM

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Management loves the consolidation.

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call: 929.293.0410

email: sales@transfix.io

FLOG0716_26-31_FSMA.indd EM CM RG.indd 27

visit: www.transfix.io

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tively—that they have visibility into their suppliers’ food quality and safety. The majority of respondents from small and mid-size organizations agreed or strongly agreed—63 percent and MANUAL VERSUS ALL MANUAL 72 percent, AUTOMATED respectiveTRACKING OF PARTIALLY AUTOMATED ly—that FOOD QUALITY they have FULLY AUTOMATED AND SAFETY visibility. But the survey Source: Sparta Systems online survey of 150 U.S. food and beverage professionals also revealed a lack of automated Respondents from large or enter- systems for managing compliance across the supply chain: More than prise-level organizations were para third (38 percent) said their orgaticularly certain of their readiness nizations manually track, manage for the FSMA’s Foreign Supplier and report food quality and safety, Verification Program (FSVP), which while 56 percent of respondents requires importers to perform classified processes as partially aurisk-based tests to verify that tomated. Only 7 percent reported foreign-manufactured food or food fully automated systems. ingredients are as safe as those When asked what would help produced in the United States. improve food quality and safety, The respondents from enterprise more than half (60 percent) of the and large organizations overwhelmrespondents indicated improved ingly agreed or strongly agreed—90 supply chain visibility.

In addition, percent and 82 percent, respec37 percent believe automation of quality and safety processes would yield a positive impact.

SOFTWARE & TECHNOLOGY continued

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Software Responds Software providers are continuously developing programs to improve supply chain visibility and automated collaboration with trading partners to better manage food safety programs and streamline documentation.

Ferrara Candy Company, the largest non-chocolate confectionery manufacturer in the United States, deployed a system from ICIX to improve supply chain visibility and automate trade partner collaboration.

Ahmet Hepdogan, Ferrara Candy’s vice president of global procurement, says the company is expanding its use of the software to comply with the FSMA. The

software manages both customer and supplier relations.

“The law impacts every part of the supply chain,” Hepdogan says.

“In the past, you looked at critical areas in your own plants and you were done. That’s not true anymore.” He suggests food companies look upstream and downstream in their supply chains to track product integrity, food safety and quality assurance throughout their network.

Before addressing the FSMA, Ferrara Candy realized that managing its supplier documentation was a challenge. “First, we need to know our suppliers’ quality programs at a facility level. We have specific questions on an ingredient or packaging level. To be able to have a successful quality program, you really need to be able to have both a facility view as well as an item-level view.”

Before bringing ICIX on board three years ago, Ferrara Candy was gathering information manually. It was difficult to know the timeliness of documents being collected. “It’s pretty hard when you look at the 300 facilities we source product from and the close to 3,000 parts [ingredients and packaging items] we buy,” Hepdogan says. “If you keep on doing the math over and over again, we’re talking about tens of thousands of documents that needed to be collected by email, which was just not very effective.”

Prior to ICIX, efforts were not focused on content as much as collection. “It automated the collection process so we can now focus our energies on the content we get back,” he says. “We truly understand the risks and opportunities from a specification point of view.”

Software deployment took cross-functional collaboration.

“You need an executive leadership level of support,” Hepdogan says. “A small group of employees have to be dedicated to the design [blueprint] element. And then, once you go live, you need to have a group that’s really in charge of the data management.”

To that end, the company did not change its headcount, but it repurposed people.

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FOOD SAFETY ACTION PLAN

Companies can reduce the risk of recalls, minimize the cost of recall execution and contain legal liability by following a food safety action plan. Deloitte Consulting LLP offers the following guidelines: • Prepare for the FSMA—aggressively remediate gaps.

• Employ practices and governance processes to improve records and document management processes (and comply with the 24-hour rule).

• Review and optimize batch management, traceability and recall processes with a focus on increasing response time and reducing risk.

• Incorporate analytics into processes to gain deeper insights for decisionmaking; and leverage social media analytics as an early warning system to identify potential food safety issues.

• Drive efficiency throughout the organization through data collection, retention and recall capabilities.

• Implement process improvements to manage quality issues, and centralize corrective and preventive action activities.

Registered food facilities are required to have a formal food safety plan under the FSMA preventive controls rule.

Supplier Input Critical One of the more unique aspects of the software is that it interfaces with suppliers and allows the company to input supplier data.

Warehousing became more efficient due to the new software.

After the data was gathered, the information technology team used advanced analytics. “There are added benefits as you become more advanced and your compliance goes up,” Hepdogan says. “The more supplier information is in ICIX, the more you can do advanced analytics in your enterprise resource planning (ERP) program.”

The logistics team uses the data for determining origin destinations and knowing what commodity is being picked up on the inbound.

“They can look at temperature requirements by each item,” he says. www.foodlogistics.com

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Hepdogan says. “Out of five facilities that make candy, every user has the capability of logging in directly from their desktop.”

Ferrara Candy had a dedicated compliance team working on its FSMA readiness when parts of the law became final last fall. The company worked with Silliker, a global provider of food safety, quality and nutrition services. ICIX was also very knowledgeable about the FSMA. “It was good to know we had a partner that knew about the changing environment,” he says.

Another key aspect to the company’s readiness is the cooperation from its suppliers. “We are approximately 95 percent compliant, with 5 percent to go, and those are just the new [partners],” says Hepdogan.

It’s going to be very much up to those Global Food Safety Initiative audit teams to quickly integrate

“In the past, they would not know FSMA whom the transportation manager rules into was at a supplier level. Now, all the their audit information is very current. They schemes.” know exactly whom to call if there Ahmet Hepdogan, is a transportation-related inquiry.

Ferrara Candy Third-Party Company They know exactly whom to call if Safety Audits there is a quality-related inquiry.”

Third-party safety audit orga“You give the control of the nizations can also play a role in information to the user,” Hepdogan enforcement of the FSMA since notes. Users no longer have to wait to get information from someone else. “You can extract what you need very quickly.”

As for FSMA readiness, Hepdogan says, “We feel more ready than ever before.” The company is currently in the training phase of FSMA compliance.

The FSMA’s preventive controls rule takes effect in September, Hepdogan SOURCING, PROCUREMENT says, and 90 percent of & SUPPLIER RELATIONSHIP the company’s employees MANAGEMENT SOLUTIONS are trained to meet the rule’s requirements. The company also developed a supplier questionnaire that Reduce time sourcing logistics partners can help it comply with the rule more consistently.

Broaden your carrier network A key aspect of this Maximize purchasing power readiness is the company’s Streamline supplier management extensive understanding of the FSMA rules, which Mitigate risk & ensure compliance the government finalized in stages. The ICIX system REQUEST “makes it tremendously (877) 763-3240 A FREE info@transwide.com easy to be able to run reDEMO www.transwide.com ports at a moment’s notice,”

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SOFTWARE & TECHNOLOGY continued they have to apply the law in their audits. “It’s going to be very much up to those Global Food Safety Initiative audit teams to quickly integrate FSMA rules into their audit schemes,” he says.

Hepdogan expects compliance by the food industry to take time and have some leniency.

“The FSMA is requiring that companies are able to furnish documentation upon request within 24 hours and have that information for two years,” says Brian Roufa, chief marketing officer and senior vice president of sales operations at ICIX. “You need to have programs and processes in place, supported by systems with technology that enables you to have that information stored electronically and makes it easy to share.”

ICIX developed FSMA best-practice templates that companies can use as they build and refine

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their assessments. “You need to automate, and connect with your trading partners to enable collaboration and information sharing,” Roufa notes. “You then want to conduct your assessments. This is an ongoing process.”

“There’s a significant need for automation to help continue to drive transparency,” he adds.

The government is not the only party that may request information

WE THINK REGULATION WILL IMPROVE VISIBILITY NO AND 57% SAFETY IN THE SUPPLY CHAIN Source: Sparta Systems online survey of 150 U.S. food and beverage professionals

related to FSMA compliance, says Roufa. In some instances, a company’s customer may request documentation for its own compliance needs.

For retailers, the FSMA can impact the management of private-label offerings, notes Roufa. Retailers need more transparency in their supply chains to get the necessary documentation from trading partners.

“They want to gather food safety plans and ensure that their trading partners are compliant,” he says.

ICIX, being a cloudbased platform, can integrate with any data set, internal or external.

Deloitte Steps Forward

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Deloitte created modular components using OpenText technologies that allow food companies to link data to SAP ERP business processes to help meet FSMA requirements.

There are currently five

components: traceability and recall execution, recordkeeping and documentation, preventive controls, food defense and foreign supplier verification. Deloitte also offers guidelines for how companies can set up timelines for complying with the FSMA. SAP’s global batch traceability solution is a helpful tool in responding to a recall, says Stephen Phelan, consumer products industry principal at SAP America Inc. In the case of a recall, companies have to process data immediately for the data to have value.

The batch 43% traceability tool enables a company to advise customers when a recall occurs, as well as give information on the cause of the recall. This is possible because S/4HANA ERP integrates disparate data faster than previous enterprise software. The power of ERP enables companies to monitor more of the end-to-end supply network in real time than before, enabling them to anticipate and react to issues to mitigate risk. Phelan points out that, while it’s difficult to anticipate every scenario, ERP provides better decision-making capabilities for rapid response.

The Deloitte offering also includes a proactive sensing solution that can provide an early warning for quality and safety issues, which can reduce the duration, scope and cost of recalls. The solution uses data from social media, customer reviews, consumer complaints, the United States Department of Agriculture, the FDA’s adverse event reporting system, and manufacturing intelligence and enterprise quality data from InfinityQS, SAP ERP, and distributor and supplier information.

YES

Mobile Enterprise Management Arrives Kelly Frey, vice president of product marketing at Telogis, a

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mobile enterprise management software provider, agrees that technology provides new ways to meet food safety requirements. “Many of the vehicles that you’re buying today already have telematics devices deployed in them,” he says. “We can easily put temperature sensors on those vehicles to pull information either over Wi-Fi or Bluetooth, or even sometimes right over the engine bus. It’s getting easier to get some of these in-transit temperature readings required to meet the FSMA regulations.”

There is also an explosion in mobile devices, he adds, referring to smartphones and, increasingly, wearables. “We’re going to have an opportunity to use the wearables, and easy-to-use temperature probes and scanners our drivers are carrying to shoot the food for temperature reading when it gets to its final destination,” says Frey.

Telogis partnered with Apple under its mobility partner program to develop new applications.

“We can also do some neat things around on-premise navigation— navigating people to washout areas and verifying that they, in fact, were there, when they washed the vehicle and how long they were there, and verifying that a thorough driver vehicle inspection was completed,” Frey adds. Additionally, vehicle-mounted cameras allow drivers to take pictures of the freight as it’s being delivered, which can be paired with temperature readings.

Temperature Monitoring Improves Another important change is that it’s getting easier to use tempera-

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Many food facilities must assess risks and hazards, and have preventive controls under the FSMA.

ture monitoring. “We now have the ability to bring in multiple different sensors,” Frey says. Telogis has a product called Vehicle-as-a-Hub that serves as an Internet gateway.

“That allows us to connect multiple different sensors. A temperature sensor is a great example of that.

We can take in this different sensor information and report on it along with the route of that vehicle.”

“Temperature monitoring en route is really critical,” he says. It provides a means for companies to verify that the trailer was received and pre-cooled to a certain temperature, and confirm that the temperature was maintained throughout the route until the point of destination.

Home Delivery Can Be Assured “As home delivery expands, it will be important to verify the product was delivered to the home at the appropriate temperature,” Frey says. “That’s a bit of a challenge since sometimes that homeowner may not be there.”

A reporting and alert capability is also important in meeting FSMA rules.

“We need to maintain a full record of the temperature profile throughout its journey,” he says.

As far as getting drivers

up to speed with the FSMA, one of the most important things is to do a full proper vehicle inspection.

Telogis recognizes the driver vehicle inspection report (DVIR) as a tool to support the FSMA. “Our solution allows a custom DVIR to be created,” he says. “And we created one specifically to include elements that are important to the FSMA.” The company also created a product called Telogis Coach that empowers drivers by sharing their performance information with them on a leaderboard. This gives feedback on hard braking and excessive acceleration, speeding, etc. “Any of the different telematics information or operational information we have related to a vehicle inspection adhering to the FSMA can be included into a score for that driver.” The tool allows the company to share what good looks like to the driver.

“The law just elevates your awareness of your supply chain, as well as your plants’ network,” says Hepdogan.

As home delivery expands, it will be important to verify the product was delivered to the home at the

appropriate temperature.”

Kelly Frey, Telogis

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SPECIAL EDITION:

SOFTWARE & TECHNOLOGY

BY FOOD LOGISTICS EDITORS

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SOFTWARE AND TECHNOLOGY

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Logistics decisionmakers have more tools available to improve efficiency.

T

echnology providers continue to introduce new tools to enable supply chain companies to respond to customer needs more efficiently. Many of the innovations that are now entering the market are in transportation management.

The following is an overview of newer technology tools for the food and beverage supply chain.

Route4Me Enhances Dynamic Route Optimization Route4Me Inc.’s new version of its route optimization engine improves the speed of its dynamic route optimization algorithm—a type of optimization that simultaneously generates optimally sequenced multi-step driving routes for drivers originating from many depots.

The platform creates higher density routes, with more

drops and/or pickups per hour, permitting businesses to employ or subcontract routes to fewer drivers.

This is critical when working with a pool of drivers that changes as demand fluctuates. Businesses that have a large number of orders need constant route re-evaluation because of on-demand orders.

Real-time route re-evaluation incorporates real-world problematic situations into the route planning and route execution lifecycle.

Vehicle failures, customer cancellations, late freight, road closures, weather and traffic all cause optimized routes to become obsolete very quickly. Route4Me’s platform permits companies to overcome these problems with features such as over-the-air route updates, GPS-based planned versus actual tracking, route deviation detection, dynamic geofencing and real-time route sequence re-optimization.

C3 Solutions Reinvents Yard Management

C3 Solutions, a provider of yard management and dock scheduling solutions, announced C3 Yard, the newest component of its softwareas-a-service (SaaS) logistics optimization product suite—C3 Hub. C3 Yard is offered in conjunction with C3’s best-of-breed dock appointment scheduling module (C3 Reservations). With this expansion, C3 Hub’s product suite provides a single, powerful and flexible solution empowering companies of all sizes to manage their entire logistics lifecycle—from planning to final execution, including fully automated communications and complete visibility for all parties— every step of the way.

Traditionally, companies that implemented yard management systems (YMS) had large, high-volume operations and required an

Route4Me’s new route optimization engine improves the speed of routing tasks.

Image courtesy of Route4Me Inc.

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NOVATION EMPOWERS THE FOOD SUPPLY CHAIN enterprise-level application that was integrated into all aspects of its supply chain. Smaller operations could not justify an enterprise YMS solution and had to settle with stand-alone systems. C3 Yard allows customers to manage yard operations at the enterprise level.

CAMS Focuses on Outbound Grocery Grocery wholesalers and retailers typically use private or dedicated fleets for their outbound transportation operations, and a blend of contract carriers

plus their own fleet for inbound (backhaul) operations. While grocery distribution needs a different kind of transportation management system (TMS) for inbound versus outbound, the outbound side also introduces several unique challenges, notes Brian Taylor, president of CAMS Software Corporation.

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Find Us: Two-Time IBM Beacon Award Winner Outstanding Solution for Midsized Businesses Most Innovative “Built on IBM Express Portfolio” Solution

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SOFTWARE & TECHNOLOGY

continued

Because virtually everything outbound in grocery is a round trip, it introduces the need for automated backhaul and salvage optimization.

Large fleets typically have collective bargaining agreements that frequently introduce unique dispatch and payroll challenges, such as idiosyncratic driver bids and activity-based compensation contracts.

The perishable nature of the cargo requires accelerated turnaround times from order cutoff to delivery, often 10 to 18 hours. The luxury of running multiple optimizations as variables change throughout the day is not practical. Grocery distribution is an entirely different animal, and these outbound challenges are not addressed by the typical shipper- or carrier-based TMS, Taylor notes.

Loadsmart Online Platform Simplifies Freight Management Loadsmart’s online platform, loadsmart.com, provides instant booking, a curated carrier network, real-time tracking and the best rates available for moving truckload freight.

“We’re providing produce shippers with a more streamlined and intelligent approach to booking trucks without having to give up the personal service, market knowledge and relationships they expect from a full-service freight broker,” says Ricardo Salgado, Loadsmart’s

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Loadsmart’s online platform provides instant booking, real-time tracking, rate guidance and other benefits. Image courtesy of Loadsmart.

CEO. “Most businesses spend hours sending emails and updating spreadsheets when managing their freight. With Loadsmart, it takes less than five minutes to book a shipment, and customers can track and manage everything online.”

Shippers can quickly schedule a truck, track freight from pickup to delivery, manage electronic bills of lading, and process payments from any web-enabled desktop or mobile device. Loadsmart’s proprietary algorithm matches the shipment with the best available carrier based on requirements such as price, transit time and need for temperature control.

Driver Performance Program Empowers Fleets to Act on Telematics Data Spireon Inc.’s driver performance program and mobile app can

improve driver behavior and fleet performance. Individual drivers and teams compete for rewards and recognition during a competition season, and can view their rankings and scores on their smartphones through the mobile app. Additionally, fleet managers have full access to driver performance data to provide performance recommendations and coaching, as well as generate detailed reports.

The program’s gamification format is proven to drive real business results. Customer pilot programs delivered significant increases in driver productivity, efficiency and on-time deliveries, all key factors that contribute to improve a company’s bottom line.

While many of the program features are designed to improve driver behavior, the true benefit of the program is increased business profitability. Organizations that

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deployed Spireon’s solution saw up to a 50 percent drop in accidents by helping drivers identify and improve on risky behaviors, including speeding and aggressive driving, such as hard braking and acceleration. Customers also saw cost savings through fuel purchase reductions of up to 15 percent and up to 50 percent in idle time reduction.

MercuryGate Launches Global Omnichannel Freight Procurement MercuryGate International Inc.’s MercuryProcure, an advanced freight sourcing and procurement solution, allows users to manage requests for proposals for all transportation modes with a single system. Available for a monthly subscription, MercuryProcure integrates with other MercuryGate products, allowing users to leverage the power of carrier rating, report on carrier performance and use real-time shipment data to project accurate costs as they make transportation purchasing decisions.

MercuryProcure was designed for ease of use for both shippers/3PLs and carriers responding to requests. Users have the ability to provide rich lane metrics to carriers, as well as their standing in the current bid process.

TMW Systems Improves Fleet Planning, Maintenance and Efficiency TMW Systems Inc. offers three solutions to improve fleet planning, maintenance and efficiency.

TMW’s Appian DirectRoute is final-mile optimization software that helps companies lower transportation costs, control field operations, and improve customer service through more efficient route planning and management.

Appian customers experience an 8 to 15 percent reduction in total distribution costs using the route optimization, staffing and real-time vehicle tracking features.

The Asset Maintenance System helps automate product mainte-

nance and service scheduling by syncing it with dispatch to minimize out-of-route miles and service downtime, while protecting safety, compliance and inspection records.

It can also be utilized as a trailer cleanout application for compliance with Food Safety Modernization Act (FSMA) and Sanitary Transportation of Human and Animal Food sanitization regulations.

The TMS gives complete visibility into fleet costs and resources. By automating routine processes and alerts to potential situations before they become a problem, the TMS is particularly useful for documenting information about previous loads.

Paragon Software Systems Meets Growing Demand for Last-Mile Fulfillment

of a comprehensive offering that covers everything from multi-channel order integration and capacity management to customer communication to consignment tracking and day-of-delivery management.

Transfix Raises the Bar for Truck Brokerage Apps Food Logistics recently checked in with Ed Stockman, director of sales for Transfix, to find out how the technology company is faring one year after the launch of its Uber-like app that connects truckers with freight.

The trucking industry is primed for an app like the one offered by Transfix, says Stockman. “Trucking and logistics have been massively underserved by technology for years,” he explains. “Many companies still use very manual processes throughout the supply chain and to operate their trucking fleets. The accelerating velocity of technological innovation in the world outside

Most businesses spend hours sending emails and updating spreadsheets when managing

their freight.”

Ricardo Salgado, Loadsmart Inc.

Paragon Software Systems Inc. expanded its Paragon HDX solution to include a number of last-mile fulfillment modules. The software system allows retailers to maximize the performance of their omnichannel fulfillment operations, whether they are using their own fleet, carriers or a mixed fleet.

The ability to manage and track order fulfillment through a single system provides better visibility of the delivery process to retailers and consumers alike. This allows retailers to reduce costs and increase first-time delivery success.

Paragon HDX goes beyond simply offering route optimization and configurable time windows by providing retailers with better control over all aspects of last-mile order SERVICES INCLUDE: fulfillment. This modular • POOL DISTRIBUTION approach enables the sys• INBOUND / OUTBOUND SERVICES tem to be used as an end• OPERATIONAL SUPPORT to-end solution or to fill the gaps in retailers’ existing CONTACT US: omnichannel fulfillment www.americanlumperservices.com systems. Paragon custom866-786-8899 | info@americanlumper.com ers can take advantage

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RELIABLE AND SCALABLE

LABOR MANAGEMENT

SOLUTIONS

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SOFTWARE & TECHNOLOGY

solution will provide Kewill customers with the industry’s most flexible, efficient and comprehensive VGM compliance service, which will create minimum disruption to existing business processes.”

The International Maritime Organization’s (IMO’s) new container weight regulations are meant to help vessel operators and terminals ensure ships are properly balanced in weight. The regulations require all containers to be weighed and verified before being loaded onto a vessel. The Ocean Carrier Equipment Management Association (OCEMA), an association of 18 major carriers, reaffirmed the IMO rule.

continued

Rehrig Pacific Company Releases RVision Logistics Platform Kewill teamed up with INTTRA on the Safety of Life at Sea (SOLAS) container weight verification requirement for ocean carriers.

of the supply chain, the dramatically reduced cost of technological infrastructure and the proliferation of smart phones make trucking ripe for dramatic change.”

Transfix customers are seeing a wide range of benefits and improvements in their supply chains, adds Stockman. “This includes financial savings, real-time visibility and management by exception, and incredibly robust data, analytics and reporting capabilities.”

Stockman acknowledges that there are other apps out there, yet “Tranfix’s growth has been explosive,” he says. “We are the market leader in on-demand/ mobile-based truckload solutions.

Our growth is not a function of our competition. We grow by continuing to provide excellent service to our current customers, and by continuing to win the hearts and minds of new customers.”

Kewill and INTTRA Deliver Freight Forwarding Software for VGM Data Kewill Inc., a provider of software for supply chain execution, teamed up with INTTRA, an ocean shipping electronic marketplace, to

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deliver the first freight forwarding software capable of helping shippers and forwarders comply with the new Safety of Life at Sea (SOLAS) container weight verification requirement that took effect on July 1. By combining Kewill Global Forwarding and INTTRA’s eVGM solution, shippers and forwarders can now validate the verified gross mass (VGM) of their containers and transmit that data electronically to their carriers.

“Thanks to our partnership with INTTRA, customers who use Kewill Global Forwarding can easily comply with the new SOLAS regulations,” says Jim Hoefflin, Kewill president and chief operating officer. “The tight integration between our products will allow companies to simplify and streamline their ocean shipments, which will lower operational costs and guarantee that their cargo gets to where it needs to go on time.”

“The requirements for full-service freight forwarding software in the ocean shipping industry are expanding to include submitting VGM [data] and Kewill is leading the way,” says Inna Kuznetsova, INTTRA’s president and chief operating officer. “Our integrated INTTRA eVGM

Rehrig Pacific Company’s RVision platform provides actionable business intelligence to help customers maximize the return on investment on their reusable transport packaging assets through improved productivity gains, better asset utilization and consumer engagement.

Products powered by RVision can provide real-time visibility and traceability, increase velocity to market, mitigate risk through faster response times, identify supply chain bottlenecks, reduce asset loss, improve asset utilization and reduce waste.

As a part of RVision testing and validation, Rehrig Pacific tagged nearly 300,000 assets for PepsiCo with RFID technology. More than 1 million trips were recorded through the company’s distribution territory in the southeastern United States and across seven production facilities. Increased visibility, awareness and data resulted in a reduction of asset repurchase rates by 25 percent, year over year. Better than expected velocity revealed that Pepsi’s reusable assets are a better financial alternative to one- way, less sustainable packaging options.

“The reduction wouldn’t have been possible without the data and

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feedback provided by RVision’s RFID tracking platform,” says Kaley Parkinson, director of applied technology and business development for Rehrig Pacific Company.

Food Redistributor Gathers Cubic Data to Build Accurate Pallet Configurations Honor Foods, a redistributor, needed to collect accurate dimensioning data quickly to save time and increase productivity. The company solved many challenges with the cubic data from the CubiScan 100 from Quantronix Inc. First, it captures accurate dimensions and weights for all its packaging types.

Second, with this important dimensional information, the company is able to build accurate pallet configurations during the picking process.

All outbound trailers are now cubed more efficiently, which led to increased transportation profits.

Solid and consistent cube data is becoming more and more import-

ant for every product in a distribution center, especially when shipping over 100,000 cases and receiving over 90,000 cases each week.

To continue providing distinguished customer service, Honor Foods wanted to find a way to streamline multiple aspects of its distribution process. In order to maximize profits and warehouse efficiencies, Honor Foods’ goal for dimensioning was to measure all current SKUs, then check all new items at the time of receiving, as well as 25 random items per week to reconfirm the integrity of their inventory master file. Distributors can no longer afford to measure items manually with a tape measure or ship trucks full of air.

According to Joseph Windfelder, director of information technology at Honor Foods, collecting accurate cube data from the CubiScan 100 helped the company improve

efficiency in all operations, from slotting to picking and transportation. “Making sure we have good, solid and consistent length, width, height and gross weight data with every product item,” Joseph points out, is one of his daily objectives. There is no more guesswork when building pallets, whether it is for storage or shipping. The mobility of the measuring device enables it to measure objects in all areas of the warehouse, including the dry, refrigerated and frozen storage zones, as well as the receiving dock.

Grocery and Convenience Store Wholesaler Improves Pallet Picking Capital Candy Company Inc., a grocery and convenience store wholesaler, faced the need for a safer, faster pallet picking solution when heavy slabs of meat and other perishable items bogged down

Making sure we have good, solid and consistent length, width, height and gross weight data with every product item”

is a daily objective.

Joseph Windfelder, Honor Foods

The Software Used By Successful Food Distributors

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With Pick-Plank on our pallets, we’re seeing

significantly higher productivity.”

Jim Thibeault, Capital Candy Company Inc.

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continued

pallet pickers. To help transform standard pallet storage into dynamic pallet storage, UNEX Manufacturing Inc. invented Pick-Plank, an easy-to-use order-picking device designed to improve productivity, space utilization and ergonomics on the pick floor.

“After installing Pick-Plank, in one aisle alone, we gained room for 24 additional pallets of product,” says Jim Thibeault, operations manager at Capital Candy. “We also reduced the amount of reaching and bending required to pick the bulkier items in the coolers, and improved rotation of perishable SKUs. Pick-Plank was a big hit with our pickers.

“With Pick-Plank on our pallets, we’re seeing significantly higher productivity,” he continues. “The ergonomic benefits are also a real advantage. The product pulls from the front, so the picker doesn’t have to reach in 48 inches, drag the cases forward and bump his head along the way.”

The order picking device attaches easily and quickly. “You set it on the pallet, use a couple of bolts and it’s installed in about five minutes,” says Thibeault.

Once the worker picks the items closest to the aisle, the picker simply disengages a latch and, in one smooth motion, slides the back half of the pallet to the front position, making all products on the pallet accessible from the aisle.

Traditionally, when a pallet is empty, it is removed from the area and restocked. But with PickPlank, a material handler can easily restock the pallet within the pallet rack and experience the same ergonomic advantages that Pick-Plank offers during picking.

One of the biggest benefits of Pick-Plank is that the device allows Capital Candy to stack more product onto the pallet and reduces the need for empty overhead space. To withstand the toughest warehouse conditions, Pick-Plank is made of

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galvanized steel and rides on steel roller bearings. The device can handle 1,500 units of product per pallet. The maximum pull required is 30 pounds or 3 percent of the product pallet load.

The unit can attach to any standard 40-inch by 48-inch pallet with lag screws, which are provided, or the unit can be purchased pre-installed on a heavy-duty, blockstyle pallet. UNEX can configure Pick-Plank with a right-handed or left-handed pull mechanism.

InfinityQS Enterprise Quality Management Software Drives Improvement InfinityQS International’s enterprise quality management software, ProFicient, is designed to improve product quality, decrease costs and make smarter business decisions.

Powered by a statistical process control engine, InfinityQS ProFicient proactively monitors, analyzes, and reports on data and processes in real time from disparate data sources across the globe. This creates a complete view of manufacturing operations—from the plant floor through multi-tiers of suppliers. ProFicient on Demand, a cloud-based deployment of the software, streamlines global data collection and analysis with a unified data archive. Its real-time alerts enable corrective actions to prevent recalls, like the recent Dole spinach recall for possible Salmonella contamination and

Capital Candy Company Inc. stacks more product onto the pallet and reduces the need for empty overhead space using the UNEX Pick-Plank solution.

the extensive cumin recalls due to undeclared peanut proteins.

The resulting manufacturing intelligence promotes continuous improvement and optimizes overall operations. Moreover, ProFicient helps food manufacturers comply with the FSMA by providing farmto-fork traceability and ensuring accurate documentation for audits.

“Globally, food and beverage manufacturers are facing increased pressure to improve quality, maintain compliance and traceability, and increase productivity,” according to Michael Lyle, president and CEO. “At the same time, supply chains are stretching further around the world, and consumers are more involved in advocating for safety precautions and healthier foods and beverages. To address priorities for each stakeholder, manufacturers from the C-suite to the plant floor must embrace available tools and technology, and adopt best practices to deploy advanced systems to their fullest extent.”

Compact Smart Camera Provides PC-Level Performance Cognex Corporation’s In-Sight Micro 8000 Series delivers vision tool performance at PC speeds in

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October 26

Cold Chain Part II

August 24

Cold Chain

_________________ New and improved software, equipment and technology are enabling carriers and cold storage providers to create a truly integrated cold chain that extends shelf life and enhances food safety and security.

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_________________

September 21

Software & Technology

_________________ Software and technology innovations are driving safety, efficiency, compliance and visibility throughout the food supply chain. Learn more about the latest developments in this fast-moving segment of our industry.

Sponsored by:

Handling time- and temperaturesensitive food/beverage shipments in a highly competitive and regulated environment creates unique challenges for logistics partners and others that support the global cold chain. What are those challenges?

How are they being addressed?

Where do the opportunities lie?

A panel of cold chain experts offers a candid discussion on these and other related issues.

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November 9

Rail Surges Ahead _________________

Rail is playing a bigger role in the transportation of food and beverages. From North America’s Class I’s to regional and specialized services, rail is emerging as a reliable, cost efficient and sustainable addition to the transportation mix.

Sponsored by:

December 7

Hottest Food Supply Chain Trends in 2017 _________________

Join Food Logistics and a visionary panel of industry executives for an insightful discussion on the hottest trends and developments for 2017 and what they portend for your business.

Sponsored by:

Dates are subject to change.

Visit our on-demand webinars, available 24/7 at: FOO D L O G IST I C S . C O M/ W E B I N A R S • 3PL • Warehouse Automation

If you are interested in becoming a panel expert sponsor (up to 4 sponsors maximum), please contact Judy Welp at 480-821-1093 or jwelp@acbusinessmedia.com.

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SOFTWARE & TECHNOLOGY

Cognex Corporation’s InSight Micro 8000 Series cameras can be deployed on the production line for guidance, inspection, gauging and identification applications.

Image courtesy of Cognex.

continued

the form factor of a traditional GigE Vision camera.

These 8000 Series models are set up with In-Sight Explorer software. This software combines the EasyBuilder setup with the power and flexibility of spreadsheet view for greater control.

In addition to PatMax Redline technology, the In-Sight Micro 8000 Series runs these vision tools at speeds that previously required a high-performance PC. All of this comes in a package no larger than an industrial image-capture-only camera.

The In-Sight Micro 8000 Series measures just 31 by 31 by 63 millimeters and includes Power over Ethernet, minimizing cabling, and making these vision systems ideal for integrating into tight spaces on robots and hard-toreach machinery. They can be deployed almost anywhere on the production line for guidance, inspection, gauging and industrial identification applications.

Symphony GOLD Enhances Retail Fresh Item Management Symphony GOLD, a provider of a unified software platform for retail,

enhanced its Fresh Item Management solution, adding the ability to optimize the ordering and management of recipe ingredients through the entire supply chain, from farm to table. The new capabilities are aimed at convenience food restaurant chains and retailers that are increasingly allocating store space to the preparation of fresh food, either to consume on site or to take away.

The new Fresh Item Management modules are based on Symphony GOLD’s inventory management and replenishment engine to forecast the consumption of specific recipes in each outlet, ensuring that demand is met while keeping food waste to an absolute minimum.

The extended capabilities of GOLD Fresh Item Management help providers to forecast accurately, while allowing for variations in consumer consumption habits, seasonal availability of ingredients, and evolving food regulations and requirements. All components of both standard recipes and madeto-order items are fully trackable.

Inventory and replenishment, cost analysis, nutritional information, food safety and forecasting are all linked directly to the entire supply chain via the GOLD platform.

Additional Fresh Item Management functionality includes: • Recipe management—workflow and authorization. Recipes can be assigned to individual kitchens across the organization for designated production levels.

• Production and inventory

management—ingredients and finished goods. Individual ingredients and completed goods can be tracked to ensure that overall inventory levels are optimized for forecasted sales, and that each location is producing the correct amount of finished goods to reduce shortages and waste.

Hovis Selects TrueCommerce for EDI Managed Service to Drive Efficiency Hovis Ltd., one of the UK’s leading baking and flour milling businesses, outsourced its electronic data interchange (EDI) requirements to TrueCommerce, a HighJump company, to reduce costs and onboarding times by using the TrueCommerce OneTime service.

Hovis was utilizing multiple legacy EDI solutions to meet the trading requirements of its key customers for a number of years.

However, when onboarding and development costs continued to rise, and setting up an additional connection took over three months, Hovis made the decision to look for a new provider. In addition to controlling rising costs and increasing onboarding times, Hovis wanted to consolidate onto a single platform to simplify its EDI footprint.

Specialty Bakery Rises Above the Competition with NetSuite ERP Specialty Bakery, a supplier of frozen bakery goods, evaluated several software vendors to run its

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40

FOOD LOGISTICS | JULY 2016

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entire core business, including sales, purchasing, order management, supply chain execution, manufacturing, warehouse management and financials. The company chose NetSuite for its cloudbased financials, enterprise resource planning (ERP) and omnichannel commerce software suites.

With NetSuite, Specialty Bakery opened a state-of-the-art, 225,000-square-foot commercial bakery in Indianapolis, Indiana, where employees use shop floor mobile devices for real-time access to inventory, order, and shipping data for better quality control and execution.

“We use NetSuite to run the business—it’s the cornerstone of our information technology strategy,” says Specialty Bakery CEO Ahmad Hamade.

“When we looked at NetSuite, we were wowed by its capabilities from a manufacturing perspective.”

Hamade adds, “Our strategy from the beginning was to ensure that our investments were highly scalable and NetSuite aligns very well with that. We believe that we built a flagship solution with NetSuite that provides real value to our customers in terms of driving efficiencies and speed-to-market solutions.”

ADVERTISER INDEX ADVERTISER.....................................................PAGE

American Lumper Services................................35 Bastian Solutions Inc.............................................13 CAMS Software Corporation...........................25 Cognex Corporation..............................................11 Ford Motor Company.........................................2, 3 Gleeson Constructors & Engineers LLC.....40 Great Dane Trailers...............................................44 International Foodservice Distributors Association (IFDA)..................41 Interlink Technologies..........................................28 LeanLogistics Inc.....................................................21 MercuryGate International Inc........................43 NECS Inc..................................................................... 37 Nulogy Corporation..............................................19 Old Dominion Freight Line Inc................. 22, 23 OpenLink.......................................................................7 Sensitech Inc............................................................. 20 SmartTrace Pty. Ltd................................................34 Transfix................................................................. 17, 27 Uline.............................................................................. 30 Vormittag Associates Inc. (VAI)........................33 Witron.............................................................................5 Wolters Kluwer Transport Services...... 29, 31 Yale Materials Handling Corporation..............9

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The IFDA Distribution Solutions Conference

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The IFDA Distribution Solutions Conference supports the total development of operations people. From the eye-opening to the practical, our education delivers insights on hot topics, pain points, and helpful professional development. Add to that an exposition filled with the latest technologies, the latest material handling equipment, and cutting edge service providers — and you have a powerhouse opportunity for finding improvements for your operations.

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| FOOD LOGISTICS

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FOOD (AND MORE) FOR THOUGHT

BY KHALIL DIVAN

Harmonization in Food Safety— It Starts from Within W D I VA N

Khalil Divan, Ph.D., is the senior director of global marketing for food and beverage at Thermo Fisher Scientific Inc.

42

e can agree that consumers should never have to worry whether food is safe. Where agreement lacks, however, is in how. How do we best monitor for chemical, biological and physical contaminants; how do we report and to whom; and how much regulation is too much?

Even as the industry continues to debate the how, prevailing sentiment is that the onus for ingredient and finished product safety is on manufacturers, not on the myriad regulatory bodies that now have jurisdictional oversight.

After all, no regulator has sufficient resources to do anything more than perfunctory testing, and many agencies would readily admit they are drowning in data that, despite the intrinsic value, they are unable to effectively access and use.

The answer must come—and is coming—from those best positioned to be stewards of food safety: the producers and manufacturers. But this isn’t a case of the fox guarding the hen house because there is no predator. Each producer or manufacturer is accountable up and down an increasingly more transparent food supply chain. The consequences of a mistake range from crippling stock deflation for a mega brand to the complete shuttering of a smaller company affected by a recall.

Now the burden of proof is shifting to industry, and each link in the supply chain has a proportional responsibility to supply safe product. Suddenly, it doesn’t matter whether the Food Safety Modernization Act

FOOD LOGISTICS | JULY 2016

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(FSMA) goes too far or whether the General Food Law Regulation in the European Union goes even further.

If industry has a vested interest in delivering safe food, they’ll make investments that exceed what’s required by regulation.

What Is Harmonization?

Many eyes are on the Trans-Pacific Partnership (TPP) and the food industry is no exception. A TPP agreement that addresses tariff and non-tariff barriers will support expansion of U.S. agricultural exports and promote job growth.

Critics of the law believe that an already loose net will get looser. For years, domestic seafood producers complained of contaminated imports from TPP participant Vietnam. How, these critics wonder, will opening trade help this long-standing problem? And this is just one example among many. Simply put, there is no regulatory harmony between these 11 potential trade partners—and many other nations not part of TPP— so it’s right to wonder how standards will be monitored and met.

The same worries exist as the United States and European Union hammer out the terms of the TTP, “an ambitious, comprehensive, and high-standard trade and investment agreement.” Protests in Europe earlier this year don’t portend well for the TTP, but that doesn’t change the fact that strong political will exists to remove real and perceived shackles that prevent a free-flowing global food supply chain. Before this happens, however, proponents will need to win over those who question whether harmonization does indeed benefit consumers.

Without taking sides, however, we can at least concede that cross-jurisdictional harmonization will require negotiation and tradeoffs. What if, instead, harmonization capitalized on industry’s willingness to accept the burden of proof and make harmonization about following data-driven business rules instead of adherence to a hodgepodge of standards? In this case, could the outcome—safer food—actually be better? Perhaps.

Achieving Data Harmony First While there’s no single formula establishing rigor across the global food supply chain, one way is to rely on ISO 22000 within on-site and contract labs. Laboratory information management systems (LIMS) and ISO 22000 can form a circulatory system for managing a highly distributed food supply chain, with data as the lifeblood. What we have then is data harmonization first.

Once you harmonize data, you’re one step closer to protecting your flanks up and down your supply chain. Or, if you’re a single link in that chain, you have a way to validate that your ISO 22000 driven processes and management systems enable you to immediately plug into a lucrative global supply chain.

Over the next decades, the world will get progressively flatter, which brings both opportunity and risk.

But whether harmonization is possible across disparate jurisdictions is moot—what’s most exciting is seeing how our industry steps up, arming itself with data and technology to make it our mission to ensure that consumers never have to worry whether food is safe.

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