Supply Scan

McDonald's, Produce Suppliers Address Farm Worker Issues

The Coalition of Immokalee Workers (CIW), and McDonald's USA, working with McDonald's produce suppliers, have announced plans to work together to address wages and working conditions for the farm workers who pick Florida tomatoes.

Beginning in the 2007 growing season, McDonald's USA, through its produce suppliers, will pay an additional penny per pound for Florida tomatoes supplied to its U.S. restaurants. The increase will be paid directly to farm workers harvesting tomatoes purchased by McDonald's.

The CIW and McDonald's produce suppliers will work together to develop a new code of conduct for Florida tomato growers as well as increase farm worker participation in monitoring supplier compliance. Farm workers will also participate in investigating worker complaints and dispute resolution. Additionally, the CIW and McDonald's produce suppliers will work together toward developing and implementing a credible third-party verification system.

"I welcome McDonald's commitment to work with the Coalition of Immokalee Workers to improve the lives of the workers who supply their 13,000 U.S. restaurants with tomatoes," says former United States President and founder of the Carter Center, Jimmy Carter. "I encourage others to now follow the lead of McDonald's and Taco Bell to achieve the much needed change throughout the entire Florida-based tomato industry."

Representatives from the Carter Center, based in Atlanta, helped facilitate the agreement with the Coalition and McDonald's.

"Two years ago, our agreement with Yum Brands marked the first step toward a distant dream of ensuring human rights for workers in Florida's fields," says Lucas Benitez of the Coalition of Immokalee Workers.

"We have taken another major step toward a world where we as farm workers can enjoy a fair wage and humane working conditions in exchange for the hard and essential work we do every day. We are not there yet, but today's agreement should send a strong message to the rest of the restaurant and supermarket industry that it is now time to stand behind the food they sell from the field to the table."

To foster further improvements throughout the tomato industry, the CIW and McDonald's produce suppliers, with McDonald's support, will develop a third-party mechanism that would carry out similar monitoring and investigative functions at the industry level.

The third-party mechanism will be developed in such a way as to be expandable to include the participation of other willing members of the foodservice and retail food industry that buy Florida tomatoes.

MHIA Releases Manual Material Handling Ergonomic Guidelines

Material Handling Industry of America (MHIA) has released its Ergonomic Guidelines for Manual Material Handling.

Based on 2005 statistics from the National Safety Council (NSC), the United States had 142,946,000 documented workers. The total cost to work related injuries and deaths in the United States was $160.4 billion. Manual material handling (MMH) work related injuries was a major contributor to a large percentage of the over half a million cases of musculoskeletal disorders reported annually in the U.S.

Musculoskeletal disorders can result in protracted pain, disability, medical treatment, and financial stress for those afflicted with them, and employers often find themselves paying the bill, either directly or through workers' compensation insurance, at the same time they must cope with the loss of the full capacity of their workers.

Scientific evidence shows that effective ergonomic interventions can lower the physical demands of MMH work tasks, thereby lowering the incidence and severity of the musculoskeletal injuries they can cause. This could help reduce the amount of time lost because of work related injuries.

The NSC estimated that in 2005 the number of workdays lost by U.S. employees was 80,000,000 days. Their potential for reducing injury-related costs and time lost because of work injuries alone makes ergonomic interventions a useful tool for improving a company's productivity, product quality, and overall business competitiveness.

Ergonomic Guidelines for Manual Material Handling can help recognize high-risk MMH work tasks and choose effective options for reducing their physical demands such as:

  • Eliminating lifting from the floor and using simple transport devices like carts or dollies;
  • Using lift-assist devices like scissors lift tables or load levelers;
  • Using more sophisticated equipment like powered stackers, hoists, cranes, or vacuum assist devices;
  • Guiding your choice of equipment by analyzing and redesigning work stations and workflow.

To find out how to obtain a copy of the 68-page book, go to

Hershey Raises Prices Due To Soaring Supply Chain Costs

Hershey Co. has announced an increase in the wholesale prices of its domestic confectionery line.

An increase of approximately 4 percent to 5 percent on the company's standard bar, king-size bar, six-pack and vending lines is effective immediately. These products represent roughly one-third of the company's portfolio.

This action will help offset the company's input costs, including raw and packaging materials, fuel, utilities and transportation.

While there has been no change in list prices on these impacted items since December 2004, over this period costs have continued to rise.

"Our primary business objective is to win in the market place. As we implement this pricing action we will work with our customers to create programs which will drive retail takeaway," says Christopher J. Baldwin, senior vice president, president North American commercial group, Hershey, PA.

"Given the mid-year timing of this pricing action and our commitment to planned consumer and customer promotions and merchandising events, we expect minimal financial impact from the pricing in 2007."

Retailers To Spend More On Future RFID Projects: Study

Retailers are showing signs of significant maturation in their approach to RFID. While only 6.5 percent of retailers surveyed are spending money on RFID technology today, twice that have budget allocated toward RFID implementation.

In a new report by the Boston-based Aberdeen Group, a Harte-Hanks Co., titled "RFID: Roadmap for Retail," Aberdeen reveals that retailers are dropping mandate-driven RFID initiatives in favor of programs that will address supplier visibility, inventory management and customer service.

The value proposition of RFID to retailers can be segmented into three general areas:

  • Item and case-level tagging for improved inventory management;
  • Promotion optimization and loyalty management;
  • Customer-level product information.

"Many RFID initiatives suffer because they are perceived as an IT issue. When the retail CEO taps an operations manager with technical skills to be the RFID 'thought leader' for the organization and enlists the collaboration of the IT group, the initiative has a much better chance of succeeding," says Russ Klein, a senior analyst for Aberdeen.

U.S., Global 3PL Logistics Market Analysis Released

Third-party logistics gross revenues for the U.S. broke $110 billion for the first time in 2006. Third-party logistics gross revenues hit $113.6 billion, a 9.5 percent increase.

Net revenues were $53.1 billion. EBIT and net income margins in relation to net revenue were 8.6 percent and 5.4 percent respectively. Margins for the year were down slightly due to the fourth quarter economic slowdown.

As part of its report, Armstrong & Associates, Stoughton, WI, estimates the global third-party logistics market at $391 billion. European 3PL revenues are estimated at $139 billion.

For the U.S. market, International Transportation Management (ITM), which includes major components of freight forwarding and global supply chain management, had net revenue increases of 17.7 percent. ITM growth is primarily a reflection of continued economic expansion in China and the Asia Pacific markets.

Domestic Transportation Management (DTM), including freight brokerage, posted a 12 percent gain in net revenues (gross margin). Gross revenues (turnover) were $33.8 billion. BAX, BNSF, C.H. Robinson, Meridian IQ and NFI grew by more than 20 percent. Hub, Penske, Ryder and Werner grew by 10 percent or more.

DTM net revenue growth slipped from 18 percent in 2005 and net income margin dropped by 1 percent. Armstrong attributed these changes to the U.S. economic slowdown; they are temporary downturns and have no significant long term importance for key players in DTM.

Despite the slowdown, C.H. Robinson still ended the year with net revenues of $1.1 billion and a net income margin of 24.7 percent. BNSF Logistics, Hub, NFI and Werner all had double digit net income margins.

Shoppers Research Via Internet, Phone Before They Buy

An Accenture survey of more than 600 U.S. consumers has found that the majority of consumers use the Internet as part of the shopping process even if they go to stores to purchase or pick up items.

The data suggest that retailers and consumer goods companies need to focus on customer service and information available both from call centers and online or risk losing customers researching potential purchases.

While two-thirds (67 percent) of survey respondents said they prefer to make purchases in physical stores, respondents also said they research product features online (69 percent), compare prices online before shopping in a physical store (68 percent) or use the Internet to locate items online before going to a store to purchase (58 percent). Only 13 percent said the Internet has not improved their in-store shopping experience.

"The Internet is an extension of consumers' in-store shopping experience providing a resource to research product and price," says Jeff Smith, global managing director of Accenture's Retail practice. "Retailers and manufacturers must understand this consumer behavior trend in order to reach shoppers, educate them, serve them and earn their loyalty."