Supply Scan

Long Island-based facility to service 674 stores in New York, New Jersey.

7-Eleven Inc. is getting “fresh” with customers with the opening of its environmentally in-tune commissary and combined distribution center (CDC) in Long Island, NY.

At the mixed-use facility, fresh foods will be prepared and delivered to 674 7-Eleven stores in New York, New Jersey and Pennsylvania.

The 130,000-square-foot facility is operated by Norris Food, Bohemia, NY. More than 250 Long Islanders are employed at the integrated distribution center and commissary kitchen, where daily activities include the creation of a wide variety of fresh foods delivered each day to local 7-Eleven stores.

“The building of the commissary and CDC demonstrates 7-Eleven’s approach to providing a broad selection of fresh, high-quality foods in an environment that will conserve energy, water usage and utility costs,” says Joe DePinto, 7-Eleven president and CEO.

Food-processing areas were constructed with thick polymer concrete toppings and contain anti-microbial agents that won’t crack or shear off on the floor. Light fixtures can be changed from outside the room to reduce breakage and eliminate potential room contamination. Because the site did not have access to a municipal sanitary sewer system, 7-Eleven invested in a gas-energy mixing system to treat the water before discharging it.

Sandwiches, salads, entrees and other fresh foods are prepared in the commissary’s 72,000-square-foot kitchen.

The CDC/commissary complex is less than a mile away from the Glenn Wayne Bakery, which serves 7-Eleven stores in the New York City area. To keep up with 7-Eleven customers’ growing taste for fresh-baked goods, partners Wayne Stelz and Glenn Alessi opened the new 30,000-square-foot facility last January, having outgrown its other plant in Patchogue.

Glenn Wayne Bakery prepares 27 different varieties of baked goods each day for 7-Eleven, which are transported to stores through the new CDC. Each month, approximately 1 million donuts, brownies, muffins, cookies and other items are baked fresh and distributed the same day to more than 275 stores, with 20 more 7-Eleven stores expected to be opened this year in the NYC area.

HOW IT WORKS

Through sophisticated inventory and computerized ordering systems, 7-Eleven store operators place their orders by 10 a.m. each day for deliveries that begin the very same day. The computer system quickly consolidates these orders and transmits them to the CDCs, commissaries and bakeries that support 7-Eleven stores across the U.S.

Upon receipt of the stores’ orders, 7-Eleven sandwiches, salads and baked goods are prepared fresh that same day. Fresh food products are immediately stamped with the time and date after they are made.
Other perishable and time-sensitive products are delivered throughout the day, to be sorted for that night’s delivery. Trucks are then dispatched to deliver each store’s merchandise between 9 p.m. and 5 a.m. the next day.

To ensure quality, the CDC facility follows strict product-handling and temperature standards. Products brought to the CDC are continually maintained at prescribed temperatures throughout food preparation, sorting and transportation cycles. The CDC also ensures food quality by shipping from temperature-controlled docks.

Delivery vehicles are equipped to control two temperature zones—operating both a refrigerated compartment maintained at 38° F and a dry compartment held at 70° F—assuring food safety, no matter what season it is.

7-Eleven instituted the daily delivery of fresh foods, bakery items and other perishable products to its nationwide network of stores in 1994. Today, more than 5,600 7-Eleven stores across the U.S. and Canada now offer customers fresh and safe products through this intricate preparation and distribution system.

“The opening of this sophisticated distribution system represents an expansion of 7-Eleven’s and Norris Food Services’ vision to provide high-quality foods prepared in a safe and earth-friendly environment,” says William J. Norris, owner of the CDC and the commissary.

GMA, FMI SIGN COLLABORATION AGREEMENT

The Food Marketing Institute (FMI) and the Grocery Manufacturers Association (GMA) have signed a two-year agreement to develop a common agenda on supply chain issues and other initiatives.

Steven C. Smith, chairman of FMI and president and CEO of K-VA-T Food Stores and Douglas R. Conant, chairman of GMA and president, signed a Joint Memorandum of Understanding Collaboration Agreement at the FMI Midwinter Executive Conference in Orlando, FL, last month.

The agreement calls for greater collaboration and is focused on enhancing manufacturer-retailer engagement to achieve improved supply chain efficiency, better ways to serve consumers and more efficient use of association and member resources.

Under the terms of the agreement, the associations’ industry affairs agenda will be strengthened through the creation of a joint industry affairs-industry relations leadership group known as The Trading Partner Alliance (TPA).

The TPA will develop a common agenda on supply chain efficiency issues, the application of information technology, the adoption of environmentally-friendly business practices and other issues.

The agreement also calls for increased collaboration on public policy, scientific and regulatory affairs activity.

The term of the agreement is from January 2009 to December 2010.

USDA ISSUES FINAL RULE ON COUNTRY OF ORIGIN LABELING

The United States Department of Agriculture (USDA) has announced details of the final regulation for the mandatory country of origin labeling (COOL) program required by the 2002 and 2008 farm bills.

The rule becomes effective on March 16, 2009, 60 days after the date of publication.

The rule covers muscle cuts and ground beef, lamb, chicken, goat and pork; wild and farm-raised fish and shellfish; perishable agricultural commodities (specifically fresh and frozen fruits and vegetables); macadamia nuts; pecans; ginseng and peanuts.

Commodities covered under COOL must be labeled at retail to indicate its country of origin. For fish and shellfish, the method of production—wild or farm-raised—must be specified. Commodities are excluded from mandatory COOL if the commodity is an ingredient in a processed food item.

Excluded from COOL labeling are items derived from a covered commodity that has undergone a physical or chemical change or that has been combined with other covered commodities or other substantive food components such as chocolate, breading and tomato sauce.

Also exempt are food service establishments, such as restaurants, lunchrooms, cafeterias, food stands, bars, lounges and similar enterprises.

The final rule outlines the requirements for labeling covered commodities and the recordkeeping requirements for retailers and suppliers. The law provides for penalties of up to $1,000 per violation for both retailers and suppliers not complying with the law.

FRITO LAY CANADA REPLACES CROSS-DOCK OPERATION WITH DEMOUNTABLE SYSTEM

Frito Lay Canada recently replaced its Montreal cross-dock facility with the Warehouse on Wheels System by Demountable Concepts Inc., Glassboro, NJ.

In 2006, Frito Lay Canada, based in Cambridge, Ontario, had approximately 365 separate facilities distributing snack food to retail centers from six factories across the country. This large number of distribution centers led the company to decide that retooling its distribution systems would increase efficiency and result in significant savings.

Most of Frito Lay’s facilities were cross-dock operations being serviced by larger distribution centers. Trucks would arrive at the regional cross-dock and product would be unloaded, sorted and loaded into local delivery trucks that made retail deliveries.

While researching ways to make its cross-docks more efficient Frito Lay discovered the Warehouse on Wheels System, a truck-based alternative to cross-docking widely used for hub and spoke retail distribution throughout North America.

With the system, multiple demountable truck bodies are long-hauled to a regional market on semi-trailers and demounted at a pre-determined location. The bodies are then mounted by local straight delivery trucks that make the retail deliveries. In the meantime, the semi-trailer is returned to the DC with empty bodies from the previous round of deliveries.

Frito Lay tested the system against cross-docking. The company saw potential and in early 2007 a small scale test was put into operation to servicing its Montreal facility. Both companies hoped the test would validate the following advantages of utilizing the Warehouse on Wheels:


•Cross docking would no longer be necessary because snack food could be shipped directly from the distribution center to the retailer in the same cargo body;
•Frito Lay could eliminate the cross-docks and their operating costs;
•Product would be touched less, and inventory tracking and loading would be centralized at the distribution center for increased efficiency
•The stem portion of the route could be driven during off-traffic times when there is less congestion on the roads.

The system proved superior to cross-docking in Frito Lay Canada’s Montreal distribution test. Next the company and Demountable Concepts collaborated on implementing a plan for servicing the entire Montreal market. In 2008 the cross-dock operation was replaced with the system.

Frito Lay Canada is currently monitoring the Warehouse on Wheels System’s performance to determine the next best market for implementation.

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