food industry trends
DESCRIPTION
Impact of food industry trends upon logisticsTRANSCRIPT
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Seek to stay out in frontand don’t look back!
Richard KocherspergerSummer, 2011
“Don't look back. Something might be gaining on you.” Satchell Paige
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Tell Me and I Forget
Teach Me and I Remember
Involve me and I Learn
Ben Franklin
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Industry Gurus
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Goals/Objectives
View of the Food Industry: Retail/Foodservice What is the Competitive Landscape? Future Insights and Opportunities 7 Steps to stay ahead of your competition
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Food Waste: 40% Grow, Sell, Eat
•1 Billion people go to bed hungry every night!•16,000 kids die everyday due to starvation!•1/7 Americans are on food stamps
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World’s Best Supply Chains
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Shopping Trips
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Key Trends
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Changing Household
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Ethnic Expansion
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Government Regulations
CSA 2010: Expect to lose 150,000 drivers=5% Hours of service to be reduced Electronic Recorders on all vehicles. Carrier Scorecard
Food Safety Modernization ACT 2010 Most sweeping overhaul of the food safety system since 1938 Several provisions are already in effect Increased inspection frequency, Expanded records access, Import
certification authority, Mandatory recall authority , Fees, Port shopping, Whistleblower protection
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Food Industry Graveyard
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Food Industry E R
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Food Industry Winners
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Foodservice Industry
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Understand the Competitive Landscape: Leaks
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Big Moves
100+ stores in Canada
Walgreens
Philly/Pittsburgh
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Wal-Mart 1st Quarter Results
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Wal-Mart Emergency Response
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Wal-Mart
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Wal-Mart
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Wal-Mart
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Wal-Mart
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Tesco
Lost $930 million
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Walgreens
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Walgreens
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Gordon Food Service
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Farmers Markets
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On Line Food Sales
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Amazon.com
Sales: $34 Billion 55% North America 45% International Profits: $1.15 Billion Inventory Turnover
11/33 days Accounts Payable 72
days
More e-books than hardcover and paperback
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Amazon.com
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Gilt Group
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Gilt Taste
American Wagyu Steak Duo American wagyu used to be
considered a pale imitation of Japanese "Kobe" beef. But that's changing. By carefully breeding Angus and wagyu cattle, Mishima's beef keeps the incredible richness of wagyu, but adds the minerally flavor of a great American steak. This four steak set proves it.
Additional information $199.00 • Two 6 oz Tenderloin,
Two 14 oz Ribeye
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Gourmet On the Go: Good Food Goes Trucking
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The “Pop-Up Restaurant”
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The “Pop Up Food Store”
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Manufacturers Competition
Everyone wants a piece of your business!
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Thought
“To Succeed, Stay Out in Front of Change!”
Sam Walton
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The Age of the Customer
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E Commerce Retailers
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Shopper Marketing
“ Shopper Marketing is the use of insights-driven marketing and merchandisinginitiatives to satisfy the needs of targeted shoppers, enhance the shopping experience ,and improve business results and brand equity for retailers and manufacturers.”
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Shopper Marketing
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Social Media
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Social Connections
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Social Media
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Social Marketing: Reality Check
Source: 2011 NGA Consumer Survey Report
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Reality Check
Despite the flurry of activity, social media marketing remains experimental in nature 13% are on Twitter
Social media marketing is going to blow the shingles off the roof once people really figure out how to use it Megan O’Connor, Levi Strauss
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Next Generation of Shopping
Try on clothes in 3D, share photos with friends, and store wish-listed items on smart phones
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Ipad/Tablet Changes the World
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QR Quick Response Barcode
A QR code (abbreviation for Quick Response code) is a specific matrix barcode (or two-dimensional code) that is readable by dedicated QR barcode readers and camera phones.
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Nanotechnology
Contamination Sensors Pesticide ReductionAnti microbial Packaging Tracking, Tracing, Brand ProtectionImproved Food Storage TextureEnhanced Nutrient Delivery FlavorGreen Packaging Bacteria Identification and Elimination
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RF-ID
Alive and well!!Developments:
Eliminate the check out process at the store
Improve inventory management
Reduce mistakes unloading products inbound/outbound
Monitor temperatures throughout supply chain
Minimize paperwork
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Next Phase of E/M/F Commerce
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% of Total Category Sales Online
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E/M/F Commerce
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M-Commerce
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On Line Retailing Battleground
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E Commerce: Segmented
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Price Comparisons
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F-Commerce
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Alice.com
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Pet Products
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Groupon
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Evolving Marketplace
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Future FCPG Industry Supply Chain
Command Center
Strategic Hub
Retailers ??????
The Consumer
DistributorsThird PartyAlliances,Partners
ManufacturingNetwork
Regional, global plantsBulk, Semi-finished,Filling Finishing,
Suppliers
Information Information
InformationInformation
Information
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When there Is no vision, the people perish!
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Issues and Opportunities
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VP Logistics: Responsibilities
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Decision Makers????
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7 Steps to Stay Out in Front!
Control Inbound Traffic Embrace Technology Benchmark Education Collaboration Eliminate DSD Embrace Social Media
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1. Control Inbound Traffic
Backhaul KPI: 28% of loads; .25 profit Need professional traffic department
CC license; Intrastate authority Purchase all products: FOB mfg dock Set up inbound movements Drop trailers with mfg Establish consolidation centers Partner with other food distributors Reading today’s freight bills is a challenge Need for auditing/transportation billing is complex
trying to determine total landed cost Net result: Significant increase in profits
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2. Supply Chain Technologies
1. Mobile Computing Devices Smart Phones/Tablets
2. Analytics Software Prescriptive: What’s going on in the supply chain
now! Predictive: What’s going to happen in the future?▪ Oil Prices; Food Commodity Prices;
3. Game Changers
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Technology Revolution
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Post PC Era
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DC Applications
Seegrid's SafetyPick
Kollmorgen’s Pick-n-Go solution
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Witron-Sobey’s, Supervalu, Kroger
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Kiva Systems: Slow Movers
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3. Benchmark
Most public studies are a waste of time Participants lie; definitions are different; Industries applications vary
KOM International Rofda IFDA Trade with one another. Visit other DC’s.
What gets measured , gets managedPeter Drucker
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Dashboard/Scorecard
Space Utilization Equipment Utilization Inventory Analysis Slotting Audits Hours Accountability Key Performance Indicators
Weight per Case Cube per Case Value per Case
Item Count
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Inventory Analysis
# of products Cases SalesA: Hyper Fast 10% 50%
B: Fast 10% 30%C: Medium 20% 10%D: Slow 60% 10%
Most Important Position: Inventory Control
60% of your inventory moves less than 1 pallet a week
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Product Mix: Velocity
Most Important Position: Inventory Control
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Audit/Scorecard System
Internally, formalized performance system Many vendors/distributors have established
scorecards Sustainability
Wal-Mart Sustainability P&G Sustainability
Business Collaboration Net Result:
Different costs = Different Prices
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4. Require Education
Lifelong Learning Online tools: Skype, Blackboard, Sakai, Webex Webinars Associations: Logistics Institute, CSCMP,
APICS, ISM, Accenture Supply Chain Academy, IGA Coca Cola Institute,
“If you think education is expensive, try ignorance”
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Certification
• APICS• CSCMP• ISM• The Logistics Institute• WERC• Accenture Supply Chain Academy
Certification
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5. Collaboration
Pooling of resources between manufacturers; between distributors; between retailers for the purposes of reducing costs
Consolidation goods for transport Sharing of transport vehicles, DC’s, Sharing back office processes such as:
Finance, customer service, equipment maintenance Return center
“If you want to be incrementally better: Be competitive. If you want to be exponentially better: Be Cooperative.” - Unknown
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What Shippers share during horizontal collaboration
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Barriers Stopping Further Investment
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6. Eliminate DSD
30% of retail food stores sales are DSD 50-75 deliveries per day every store Cost to handle: 15-30% of cost of goods Increased energy prices makes it very
expensive Establish a cross-dock operation to handle all
DSD products onto your transportation fleet Tesco: 90% flow through DC’s
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7. Embrace Social Media
Use Social Media to your advantage Youtube: show video of your key operations
Order selection/Loading customer orders Checking product temperatures on inbound deliveries Cleaning the docks/aisles Warehouse/Transportation roadeo
Assign a supervisor to blog about the operations Conduct a contest in the DC with team Provide resources to listen: customers, associates
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Closing Thought
Excellence is not a skill. It is an attitude. ~Ralph Marston