Plan­ning for suc­cess

New tech­nol­ogy helps re­tail­ers man­age the com­plex­i­ties of farm-to-fork lo­gis­tics.

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

Even in the Dig­i­tal Age, getting food from a farm to a cus­tomer’s fork is as rel­e­vant as ever — but the task has be­come far more com­pli­cated than many in the in­dus­try could have pre­dicted, thanks in large part to lo­gis­ti­cal chal­lenges that range from un­pre­dictable traf­fic to ul­tra­per­ish­able fruit.

The onus is now on re­tail­ers and their sup­ply chain part­ners to come up with smart, cost-ef­fec­tive and de­pend­able so­lu­tions to keep them at the front, or at least near the head of, the re­tail­ing pack.

So far, one of the lo­gis­ti­cal front-run­ners in the race is Ama­zon, which re­cently for­mal­ized its com­mit­ment to gain ground in the gro­cery business by bid­ding for the coun­try’s largest nat­u­ral food re­tailer, Austin, Texas-based Whole Foods Mar­ket.

Iron­i­cally, it’s tech­nol­ogy, which Seat­tle-based Ama­zon cer­tainly knows a thing or two about, that may be the most cov­eted tool to sharpen re­tail­ers’ lo­gis­ti­cal know-how as they step up their com­pet­i­tive games.

Thomas Grav­elle, di­rec­tor of lo­gis­tics, trans­porta­tion and cus­tomer ser­vice for Austin, Minn.-based Hormel Foods, says tech­nol­ogy has cer­tainly been a game-changer dur­ing his 37 years at the 125-year-old com­pany. “The big­gest change I’ve seen is a more var­ied item of­fer­ing, with many more choices and fla­vors for the con­sumer,” he notes. “This has made things more chal­leng­ing for our lo­gis­tics team mem­bers, but we’ve been able to ex­e­cute the lo­gis­tics func­tions for food prod­ucts ef­fec­tively within the en­vi­ron­ment of in­creased com­plex­ity, due to greater use of tech­nol­ogy.”

Hormel is also re­ly­ing on smarter part­ner­ships with its re­tailer part­ners, he notes, point­ing to its par­tic­i­pa­tion in back­haul pro­grams as just one ex­am­ple.

Asda’s on the Right Route

Of the many types of lo­gis­tics-re­lated tech­nol­ogy to shape the in­dus­try, trans­porta­tion-re­lated so­lu­tions such as route optimization soft­ware are help­ing com­pa­nies bet­ter nav­i­gate farm-to-fork de­liv­ery. Ac­cord­ing to William Sal­ter, CEO and pres­i­dent of Dal­las-based Paragon Soft­ware Sys­tems, his com­pany’s re­tail cus­tomers, in­clud­ing Asda and Ste­wart’s Shops, are see­ing some ad­van­tages to us­ing rout­ing and sched­ul­ing tech­nol­ogy.

De­ploy­ing Paragon as a strate­gic plan­ning tool, Wal­mart-owned U.K. su­per­mar­ket chain Asda, based in Leeds, has been able to re­view and model best routes, which has re­sulted in bet­ter use of its fleet and lower cap­i­tal ex­pen­di­tures, ac­cord­ing to Sal­ter.

“Our soft­ware en­ables pre­cise plan­ning of de­liv­ery routes and ve­hi­cle use across all of the de­pots that serve Asda’s na­tion­wide stores, which serve more than 18 mil­lion cus­tomers in store ev­ery week,” says Sal­ter. “As a re­sult, food miles and car­bon emis­sions are re­duced through im­proved use of its fleet of trac­tor units and trailer units.”

When su­per­mar­kets suc­ceed in stream­lin­ing their de­liv­ery process, lo­gis­tics costs are kept to a min­i­mum, farm­ers have a lower re­turn rate, and cus­tomers get the fresh­est food pos­si­ble. — William Sal­ter Paragon Soft­ware Sys­tems

Mean­while, in the United States, Ball­ston Spa, N.y.-based re­gional convenience store op­er­a­tor Ste­wart’s Shops has adopted Paragon’s rout­ing and sched­ul­ing soft­ware to au­to­mate the man­ual process of plan­ning deliveries to its re­tail out­lets, which should ul­ti­mately lower mileage, re­duce fuel us­age and im­prove truck­load ef­fi­cien­cies, ob­serves Sal­ter.

“With grow­ing de­mand from con­sumers for fresh food, the great­est lo­gis­tics chal­lenge for our gro­cery cus­tomers is en­sur­ing that fresh food is avail­able in store as quickly as pos­si­ble after leav­ing the field, with the least amount of han­dling and at the low­est pos­si­ble cost,” he notes.

“Mov­ing prod­ucts quickly and ef­fi­ciently through the sup­ply chain not only en­sures that cus­tomer de­mand for fresh food is met, but also in­creases the length of on-shelf time be­fore use-by and best-be­fore dates ex­pire,” he adds. “This helps keep the cus­tomer happy, boosts sales and min­i­mizes the amount of food waste or stock re­turned to pro­duc­ers.”

Aside from tech­nol­ogy, some of the com­mon­sense so­lu­tions adopted by the in­dus­try

in­clude us­ing the same con­tainer all the way from the point of pack­ing at the farm or pro­ducer to the de­liv­ery jour­ney and into the su­per­mar­ket aisles, ob­serves Sal­ter, who adds, “Stan­dard­iz­ing con­tain­ers also al­lows ve­hi­cles to be bet­ter uti­lized, be­cause trans­porta­tion plan­ners can bet­ter un­der­stand what will fit in each truck based on ac­cu­rate vol­u­met­ric data.”

How­ever, the ad­van­tages that tech­nol­ogy brings to the ta­ble are un­par­al­leled, he main­tains: “Us­ing a sys­tem like Paragon’s rout­ing and sched­ul­ing soft­ware al­lows trans­porta­tion plan­ners to man­age widerang­ing cri­te­ria. This in­cludes re­stric­tions on ve­hi­cle types and de­liv­ery times, time re­quired for load­ing and un­load­ing, and pre­ferred de­liv­ery times for dif­fer­ent types of food.”

Sal­ter con­tin­ues: “When su­per­mar­kets suc­ceed in stream­lin­ing their de­liv­ery process, lo­gis­tics costs are kept to a min­i­mum, farm­ers have a lower re­turn rate, and cus­tomers get the fresh­est food pos­si­ble. It’s a win-win for ev­ery­body.”

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