Do’s and Don’ts
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.
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.
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.