How to Drive Excellence in Food Service
FOOD LOGISTICS EXCELLENCE A LA CARTE
Concerns over food product safety and integrity have ramped up efforts in the food supply chain to improve service, efficiency, and transparency—despite already robust regulatory oversight.
Picking up and delivering shipments on time with no claims is the expectation among food service companies. Service is for all intents and purposes "guaranteed," given the shelf life of many products. Consignees, shippers, and service providers driven to reduce inventories and operate just in time can optimize performance by closely gathering and analyzing key performance indicators and driving visibility to better match supply with demand.
At the same time, sourcing strategies may similarly impact what ports you are bringing product into. For example, pushing manufacturing further inland in China may warrant consideration of Suez Canal routings via the U.S. East Coast versus Pacific transits to the West Coast—and carriers serving those areas.
Having a firm direction of corporate growth strategies and transportation requirements will give you a better idea of what lanes you will be looking to fill.
FOOD LOGISTICS EXCELLENCE A LA CARTE
IDENTIFY YOUR NEEDS Before you identify potential carriers, determine your requirements. Is demand consistent all year round or is it seasonal? Are you looking for basic services and port-to-port rates or will you need dedicated space and specific visibility requirements?
If corporate strategies are in flux, long-term demand is not clear, or you’re looking for spot capacity, consider a single-year contract instead of a multi-year contract. If you are looking to grow a partnership with a carrier, your growth expectations are aligned, and you would like to lock in capacity long term, consider the latter. Make sure you clearly outline your expectations, in terms of service, ethics, and security, so carriers know where you’re coming from.
QUALITY Food service shippers and their service providers rely on each other’s standard operating procedures and input to make sure quality expectations are aligned. Given the importance, quality discussions should involve upper level management and carry through the extended enterprise.
As far as standards, industry safety and temperature guidelines are enforced at a very base level. Beyond that, food shippers need to engage all their supply chain partners—from producer to wholesaler and retailer—to set and commit to on-time delivery, as well as measure and maintain the product and equipment quality.
COST Delivering on promise is critical to driving economy. Given the perishable nature of many foodstuffs, and time sensitivity in transport, any delay can have considerable cost impacts downstream.
Consequently, there is a premium placed on scheduling, as companies need to make sure labor is available to facilitate proper loading and unloading at key interchanges. From a consignee perspective, the greatest challenge is keeping carriers in line with expected delivery windows, and making sure they communicate when shipments will be late.
For truckload shipments (one pick up, one stop), delays are easier to manage. But tardy LTL shipments have a domino impact throughout the delivery schedule. Food service companies need to understand the premium placed on timeliness, be agile enough to respond to consignee requirements, and create contingency plans when exceptions occur.
VELOCITY Beyond managing exceptions and expediting shipments where product perishability dictates, speed and velocity are relative to how well shippers and their service providers manage information and forecast demand. With regards to establishing shipment schedules, data is king. The more data and historical information shippers and consignees can share with their service providers, the better. There should also be a matrix to measure and communicate performance in a timely fashion.
Companies that accurately forecast and capture demand can optimize their shipping schedules, rationalize speed requirements, and reduce costs, moving from daily to weekly schedules for example. This becomes important when capacity is tight and shippers, carriers, and third-party logistics providers need to find more creative ways to utilize assets.
TECHNOLOGY An abundance of technology—including warehouse management, labor management, and transportation management systems—is available to help food companies manage their supply chains more efficiently and economically. Often there is little need for a company to buy into all these integrated technologies when it can partner with a 3PL that has a robust IT platform to manage its supply chain.