Supply Scan

» Study Finds Consumer-Driven Supply Chain Is Becoming A Reality

The consumer-driven supply chain is beginning to become a reality in the food industry, according to a study conducted by Kurt Salmon Associate (KSA).

“The gaps are beginning to shrink,” said Jack Horst, a principal with KSA. “The supply chain itself has been elevated to a very different realm then it was 10 years ago. Back then, tactile issues were in the way. This year, we saw the elevation of the supply chain to the main stage in your companies.”

Horst presented the results at the first-ever joint Supply Chain Conference under the auspices of the GMA-FMI Trading Partner Alliance (TPA), held in Phoenix earlier this month.

The survey, 2010 Survey of Collaborative Supply Chain Effectiveness, was commissioned by the TPA under the framework of the “New Ways of Working Together” program. It illuminates new initiatives and operating models that can help trading partners improve supply chain efficiencies to their mutual benefit.

This is the first joint industry supply chain study since 2001, when KSA conducted a similar survey, and served as the basis for much of the collaborative industry work done in the nine years since.

Key findings include:

• Significant progress has been made in the definition, development and deployment of the fundamental building blocks supporting a consumer demand driven supply chain will lead to improved shelf service levels.
• Virtually all retailers and suppliers are investing as never before to more scientifically and collaboratively understand and react to the needs of the end consumer.
• Advances in understanding end-to-end item profitability have led to increased private branding, market localization and an increased focus on expanding the ways the industry interacts with customers.

KSA has coined the phrase “info-relationships” to capture the essence of successful retailer/supplier relationships of the future. “In this year’s survey, we see retailers and suppliers on the verge of leveraging all of the foundational building blocks that will finally allow us to exploit the power of crystal clear consumer demand information,” said Horst.

He added that grocery market share continues to fragment across an increasing array of channels, putting pressure on traditional grocers from every angle. “This hyper-competitive environment drives the need for more creative approaches resulting in the delivery of enhanced shopping experience without increases in price.”

In addition, the past decade has witnessed advancement of strategic and tactical systems and processes. As companies transition from home grown “host” systems to more robust enterprise resource planning systems (ERPs), “we are finding more trading partners sharing access to a broader set of foundational information supporting the next generation advances in collaborative supply chain operations,” said Horst.

Investing In Technology

The survey revealed the past eight years have seen a focus on strategic systems investment. Several respondents indicated that they had been consumed over the past several years dealing with the “haze” of ERP implementation and were now just starting to investigate how to leverage the power of the new tools they had deployed.

“Investment in enhanced demand planning and forecasting tools was repeatedly mentioned as a high priority initiative across the vendor community despite frustrations in the perceived ability of retailers to provide necessary data to efficiently fuel these applications,” said Horst.

In the retail community, computer assisted ordering (CAO) stood out as one of the most beneficial system investments companies can make. While few retailers had a CAO in 2001, a majority of this year’s respondents have either deployed CAO or plan to do it in the short term. Where implemented, the benefits of CAP were reported to be significant and consistent, including reduced inventory, increased turns, reduction in out-of-stocks and sales lift.

Direct store delivery (DSD) suppliers generally agree that using SKU movement data as a component of order generation is beneficial as a shelf order guide for warehouse delivered product. However, suppliers feel that there remains a system gap with the suggest order information from retailer CAO to DSD vendors, requiring suppliers to adjust the order and reformat it for the supplier system. This creates a less than win/win scenario with increased cost-to-serve.

When survey participants were asked about the most frustrating aspects of the retailer/supplier relationship, they identified a lack of the “ability” to collaborate as the biggest issue. Trust remains a significant issue as well.

Horst said the survey calls for trading partners to find new ways to work together:

• Recognize that the tools are there—Across the board, someone, somewhere in our industry has implemented the individual process, systems, material handling equipment or human resource related building blocks supporting collaboration. Create a landscape map of this universe of capabilities and begin teaching ourselves what it can mean within our own organization and for key partnerships.
• Continue to break down silos—Achieving the benefit associated with molding the building blocks into a winning strategy will require increasingly cross-functional and cross-organizational shared metrics and consequences. When we achieve them, all parties should benefit.
• Understand each others requirements—Now that most of us can share descriptive data of use by our trading partners, it is time to figure out exactly what to share, how to share it and what benefit comes from the exercise. Much as we tackled the thorny issue of backhaul and perfect order, we should focus an empowered committee on defining the landscape of tactical information exchange.

The study is available online at www.gmaonline.org/publications and www.fmi.org.

» Crown Unveils Its First
Internal Combustion Forklift

Crown Equipment Corp. has introduced its first company-manufactured internal combustion (IC) forklift: the Crown C-5 Series.

The New Bremen, OH-based company says the forklift, which is designed to push the limits of IC performance, leverages the company’s core expertise and heritage in material handling to deliver commanding advantages to owners and operators seeking improved power and strength, service and uptime, and comfort and safety.

The Crown C-5 features an industrial engine that was jointly developed with John Deere Power Systems (John Deere), a proactive approach to engine cooling and radiator clearing via an on-demand cooling system, and design innovations that improve operator visibility, comfort and productivity.

Crown says product owners will see immediate return on their investment from extended service intervals and an exclusive Crown power brake system that collectively reduce maintenance costs and downtime.

“Our customers came to us with internal combustion forklift issues related to engine performance, overheating, operator comfort and maintenance,” says Jim Dicke III, Crown’s president. “Our fresh perspective on these problems, combined with extensive research and development, and our 50-year legacy of innovation and material handling expertise, allowed us to create a truly industrial forklift. We saw an opportunity to help our customers move beyond the existing limitations of IC truck performance.”

Crown says an integral element to its research and development efforts was the analysis of maintenance work performed on thousands of IC trucks. This process enabled the company to determine the most common and costly problems, and focus its design to solve the most universal uptime and service challenges traditionally accepted within the IC market.

According to Crown research, sub-par performance was one of two predominant downfalls of existing IC forklifts that rely on automotive-style engines. A co-development project with John Deere produced a 2.4-liter industrial engine for the Crown C-5 that the companies say integrates the best practices from the diesel engines used to power John Deere’s rugged construction equipment with the best practices from Crown’s five decades in material handling.

The result is the Crown C-5 industrial engine, which features a cast iron head and larger, more robust components that are designed to prevent overheating and warping while extending the product’s lifespan to twice that of existing IC trucks. Crown says the C-5’s horsepower and low-end torque are the most powerful in the IC market, improving performance during acceleration, incline-loaded travel, and carrying or pushing heavy loads.

Research showed that another challenge associated with IC lift truck engines was overheating. Crown addressed this challenge with a dual open-core radiator with separate cooling systems for the engine and transmission. This is a standard feature on the Crown C-5.

Further, Crown engineered an optional and exclusive On-Demand Cooling (ODC) system that automatically clears itself of debris and provides precise cooling to effectively manage heat in intense and dirty environments. Each time a user starts the Crown C-5, the ODC system’s radiator-clearing feature reverses the fan direction to dislodge any debris. This drastically reduces the frequency of radiator cleanings, which reduces maintenance costs and increases uptime. In addition, the ODC system adjusts its fan speed based on engine temperature, and the strategic placement of the fan improves cooling efficiency by pulling air evenly through the radiator rather than pushing the air as most other systems do.

Crown says operators spending most of their day on the Crown C-5 will notice superior drivability advantages in the form of control, comfort, stability and visibility. Control is achieved through Crown Access 1 2 3 System Control, which is the electronic system that manages all truck functions and proactively facilitates two-way communication with the operator. The technology also plays a critical role in keeping the operator out of unsafe conditions.

The system’s on-board display uses Crown eSmart Accurate Fuel Tracking to alert the operator when the system senses 16 minutes of remaining fuel time. This technology increases productivity by reducing the time spent unnecessarily changing fuel tanks.

The Crown C-5 is also designed to improve drivability, which is the confidence and control operators require when maneuvering or handling a load.

Another challenge facing the IC lift truck market has been the high cost of frequent service and maintenance issues. In its first 2,000 hours of operation, the Crown C-5 is projected to average just 76 routine tasks. Crown says this performance improvement delivers reduced downtime and lowered out-of-pocket maintenance costs compared to traditional IC trucks.

For example, the self-adjusting power brake system on the Crown C-5 has fewer moving parts and a 90 percent larger brake pad surface than traditional drum brakes, which translates into a lifespan that is three times longer and requires 93 percent fewer maintenance checks, says Crown.

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