SUP­PLY CHAIN

Do’s and Don’ts

Progressive Grocer (India) - - Contents - By Jenny Mctag­gart

In­dus­try pros weigh in with tips for smarter lo­gis­tics, ware­house ef­fi­cien­cies and more..

The tried-and-true gro­cery sup­ply chain sounds sim­ple enough in the­ory: Get prod­ucts from the field or man­u­fac­turer to the ware­house, and fi­nally to the store, as quickly and ef­fi­ciently as pos­si­ble. But to­day’s re­tail ex­ec­u­tives aren’t find­ing the task easy at all, as they’re con­stantly chal­lenged with plan­ning pit­falls, of­ten un­pre­dictable de­lays in ship­ping, im­por­tant safety reg­u­la­tions that must be ad­hered to, and even tri­als in con­sumer mar­ket­ing, par­tic­u­larly as it re­lates to how they can reach and sat­isfy mo­bile con­sumers who have more choices than ever be­fore.

To help make things a lit­tle more man­age­able, Pro­gres­sive Gro­cer has rounded up a quick list of “do’s and don’ts” from pro­fes­sion­als who work in var­i­ous ar­eas of the sup­ply chain, in­clud­ing over­all strat­egy and plan­ning, trans­porta­tion and lo­gis­tics, and tech­nol­ogy. Their in­sights will hope­fully in­spire you not only to solve some of your most press­ing prob­lems, but also to dis­cover some in­no­va­tive ideas.

De­mand Plan­ning

First and fore­most, suc­cess­ful sup­ply chain man­age­ment re­quires thought­ful plan­ning. Mike Gris­wold, re­search VP at Stam­ford, Conn.-based Gart­ner, of­fers the fol­low­ing ad­vice to re­tail­ers as they con­tem­plate their ini­tial cour­ses of ac­tion:

Do en­sure sup­ply own­er­ship of the de­mand-plan­ning process. Ma­ture re­tail sup­ply chains cen­tral­ize the de­mand-plan­ning process within the sup­ply chain for the fol­low­ing rea­sons: Ob­jec­tiv­ity: Buy­ers and mer­chants tend to have an emo­tional in­vest­ment rel­a­tive to the per­for­mance of an item, and there­fore tend to show a bias to­ward over-fore­cast­ing. Own­er­ship by the sup­ply chain pro­vides an ob­jec­tive, im­par­tial view of de­mand ex­pec­ta­tions.

End-to-end per­spec­tive: Vis­i­bil­ity of all three lev­els of de­mand gives the sup­ply chain the com­plete end-to-end pic­ture of ex­pected de­mand align­ing from the shelf back, across all sales chan­nels, and im­proves the abil­ity to ef­fec­tively match de­mand and sup­ply. Skill set align­ment: Buy­ers and mer­chants typ­i­cally fo­cus on as­sort­ment ra­tio­nale, cat­e­gory strat­egy and the align­ment of shop­per pref­er­ences with mer­chan­dise se­lec­tions, which are more qual­i­ta­tive skill sets. De­mand plan­ning re­quires a more quan­ti­ta­tive fo­cus that’s more closely as­so­ci­ated with work con­ducted by the sup­ply chain.

Cen­tral­iza­tion within the sup­ply chain leads to higher fore­cast ac­cu­racy and im­prove­ments in on-shelf avail­abil­ity and in­ven­tory pro­duc­tiv­ity.

Get­ting Lo­gis­tics Right

Whether nav­i­gat­ing the lat­est reg­u­la­tions of the Food Safety Mod­ern­iza­tion Act (FSMA), or eval­u­at­ing spe­cific modes of trans­porta­tion, the job of get­ting food and other gro­cery items to stores, or di­rectly to con­sumers, seems more daunt­ing than ever. Here are a few tips from the pros: Mark Petersen, di­rec­tor of global sourc­ing at Eden Prairie, Minn.-based Robin­son Fresh, pro­vided the fol­low­ing guide­lines for trans­port­ing goods by air, land and sea:

Do mit­i­gate risks with all par­ties in­volved in mov­ing tem­per­a­ture-sen­si­tive prod­uct — ship­pers, car­ri­ers, ven­dors, providers, etc. — by mak­ing sure they all un­der­stand the im­por­tance of main­tain­ing a cold chain.

Do think strate­gi­cally about car­rier and ship­per needs. If a ship­per trans­ports full truck­loads of cheese to lo­cal re­tail­ers, they may be able to ar­range for the same car­rier to move empty car­tons on the back­haul. The ship­per not only solves a re­verse-lo­gis­tics prob­lem, but may also re­duce trans­porta­tion costs now that the car­rier has elim­i­nated other­wise empty miles.

Do have a sys­tem of checks and bal­ances in place dur­ing load­ing/un­load­ing to min­i­mize prob­lems. With the im­ple­men­ta­tion of the San­i­tary Trans Rule of FSMA, many of these best prac­tices are re­quire­ments for cer­tain com­modi­ties. Through­out the process, be sure to in­spect:

• Prod­uct tem­per­a­ture prior to load­ing

• Trailer pre­cool­ing con­di­tion

• Con­di­tion of equip­ment prior to load­ing

• Proper con­tainer air flow while load­ing.

Don’t for­get to weigh all of the pros, cons and price of each trans­porta­tion ser­vice be­fore rul­ing any out — each comes with its own unique set of risks. Just be­cause it’s more ex­pen­sive doesn’t mean that you should aban­don it im­me­di­ately.

Don’t over­look even the small­est de­tails while plan­ning. Bring ev­ery de­tail to the ta­ble — from ac­cept­able tem­per­a­ture ranges and con­tin­u­ous tem­per­a­ture ver­sus cy­cle set­tings to proper seals, con­tin­gency plans and equip­ment ex­pec­ta­tions, along with pro­cesses for re­turns and re­jec­tions. Even be­fore prod­uct is loaded, ev­ery leg of the jour­ney must have clear ex­pec­ta­tions to mit­i­gate the added risk that comes with tem­per­a­ture-sen­si­tive prod­ucts. From Gregg Lan­yard, di­rec­tor of prod­uct man­age­ment for trans­porta­tion and lo­gis­tics at At­lanta-based Man­hat­tan As­so­ci­ates:

Do op­ti­mize con­tin­u­ously. Look for in­bound back­haul op­por­tu­ni­ties with sup­pli­ers, and use trans­porta­tion man­age­ment sys­tem (TMS) tech­nol­ogy for full vis­i­bil­ity into in­bound and out­bound op­er­a­tions.

Do mea­sure per­for­mance. To­day’s TMS of­fer­ings pro­vide a plethora of data to en­sure that you’re track­ing against a plan, and will al­low you to drill into ex­actly what may be caus­ing speed bumps in the sup­ply chain.

Don’t as­sume that your store de­liv­ery sched­ule from last year is the right de­liv­ery sched­ule to­day.

Do a con­tin­u­ous eval­u­a­tion of store de­liv­ery routes, in­clud­ing dy­namic ver­sus static de­liv­ery op­tions, store de­liv­ery days, and time win­dows to op­ti­mize out­bound op­er­a­tions and re­duce mileage.

Don’t treat out­bound trans­porta­tion as a “one and done.” Con­tin­u­ous op­ti­miza­tion is vi­tal as stores open/ close, sup­ply net­works change and trans­porta­tion rates ad­just to mar­ket con­di­tions (i.e., fuel costs). From Tim Smith, EVP at Irvine, Calif.-based Lin­eage Lo­gis­tics:

Do use lean lo­gis­tics ideals and pro­ce­dures to op­ti­mize op­er­a­tions and save a sig­nif­i­cant amount of money.

Don’t ig­nore small de­tails, such as tem­per­a­ture vari­a­tions on re­ceiv­ing docks and in­fre­quent ac­tiv­i­ties

Con­tin­u­ous op­ti­miza­tion is vi­tal as stores open/close, sup­ply net­works change and trans­porta­tion rates ad­just to mar­ket con­di­tions. — Gregg Lan­yard Man­hat­tan As­so­ci­ates

like driver strikes, when con­duct­ing sup­ply chain-plan­ning ex­er­cises. They’re among the most likely causes of dis­rup­tion. From Doug Bloss, di­rec­tor of sup­ply chain so­lu­tions for con­sumer pack­aged goods, and Alex Korc­s­maros, di­rec­tor of cus­tomer lo­gis­tics for con­sumer pack­aged goods, at Mi­ami-based Ry­der:

Do op­ti­mize com­modi­ties within an out­bound trailer by de­liv­er­ing dry gro­cery, frozen and per­ish­ables with mul­ti­temp trail­ers to mit­i­gate stops per trailer and re­ceiv­ing dock re­sources at the stores.

Do im­ple­ment a tem­per­a­ture-mon­i­tor­ing de­vice to track the in­tegrity of the cold chain, and proac­tively iden­tify prod­ucts ex­posed to un­safe tem­per­a­tures that could re­sult in a re­call.

Don’t drive down trans­porta­tion rates to the point where your core car­rier part­ners are less likely or un­able to be re­spon­sive dur­ing peak sea­sonal de­mands, caus­ing ser­vice and de­liv­ery is­sues. Re­gard­ing the ware­house, they of­fer this ad­vice:

Do limit the width of the pick aisles to re­duce the num­ber of steps each picker has to take. Aisles should be just wide enough to al­low for a nar­row-aisle-reach truck to turn. There’s a ten­dency for op­er­a­tors to leave wide aisles to re­duce con­ges­tion; how­ever, the sav­ings are greatly off­set by the ad­di­tional steps taken by the pick­ers.

Do im­ple­ment au­to­mated stretch wrap­pers that al­low pick­ers to drop pal­lets onto a con­veyor, which moves a com­pleted pick pal­let to the wrap­per and out the other end for an­other op­er­a­tor to re­trieve and stage the wrapped pal­let. This al­lows the picker to con­tinue pick­ing and elim­i­nates the wait time it takes for the wrap­per to fin­ish.

Do set up a pick­ing pro­duc­tiv­ity in­cen­tive pro­gram with safety and ac­cu­racy qual­i­fiers to mo­ti­vate pick­ers to be more ef­fi­cient.

Don’t set up pick aisles with pick slot pal­lets el­e­vated from the ground. This in­creases the safety risk of pick­ers trip­ping over cross­beams. Hav­ing to ma­neu­ver over the cross­beams cre­ates in­ef­fi­cien­cies for the pick­ers.

Don’t chim­ney- or col­umn-stack pick pal­lets, as this will cause cases to fall over, es­pe­cially as the picker is ma­neu­ver­ing through the pick aisles. The picker should al­ways in­ter­lock the cases to en­sure in­creased sta­bil­ity of the pal­lets.

In-store Suc­cess

Once prod­uct ar­rives at the store, there are still some im­por­tant sup­ply chain is­sues to ad­dress, in­clud­ing tie-ins to planograms and pro­mo­tions. Here are a few tips to con­sider: From Graeme Mcvie, gen­eral man­ager at Prec­ima, in Toronto, with a U.S. of­fice in Chicago:

Do in­clude mar­ket­ing and mer­chan­dis­ing teams in sup­ply chain-plan­ning meet­ings so you can in­te­grate price, pro­mo­tion and as­sort­ment mod­el­ing into the over­all prod­uct ful­fill­ment pro­cesses.

Don’t for­get to con­stantly mea­sure sup­ply chain per­for­mance and keep a mov­ing base­line as ser­vice rates im­prove. From Ry­der’s Bloss and Korc­s­maros:

Do con­sider back­room space avail­abil­ity when de­sign­ing de­liv­ery method, or­der size and de­liv­ery fre­quency.

Do align slot case pick slots with the store planogram, mak­ing al­lowances for move­ment and stack­a­bil­ity. It’s im­por­tant that the re­tail stores have con­sis­tent store planograms for this lay­out to be ef­fec­tive.

There’s a ten­dency for op­er­a­tors to leave wide aisles to re­duce con­ges­tion; how­ever, the sav­ings are greatly off­set by the ad­di­tional steps taken by the pick­ers. — Doug Bloss (pictured) and Alex Korc­s­maros Ry­der

For the sup­ply chain do’s and don’ts of data ac­cu­racy and tech­nol­ogy, visit pro­gres­sive­gro­cer.com/datat­ech.

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