Supply Scan

News and Trends From Across the Food Supply Chain

PFG Rolls Out Voice Across Five Facilities

Performance Food Group (PFG), the third largest foodservice distribution company in the United States, has successfully rolled out voice in five of its broadline distribution centers.

The Richmond, VA-based distributor, using solutions from Voxware Inc., Hamilton, NJ, plans to expand voice with a schedule that assumes a new broadline site will be rolled out every three to five weeks.

Once the implementations are complete in 2009, PFG will have more than 600 workers across 18 broadline distribution centers nationwide on the system. Currently PFG is using voice in its picking applications. The integration of pick slot movement data triggers the warehouse management system (WMS) to generate immediate replenishment for pick slots low on inventory.

Since voice technology has been deployed in several of PFG's distribution centers, the company has seen a 65 percent reduction in mis-picks and a 50 percent decrease in truck shorts.

In addition, training time for new workers now takes approximately 25 percent less time than it did prior to voice.

"We implemented voice to reduce mis-picks and truck shorts. But since we began working with Voxware, we've experienced many additional benefits to using the technology, especially with our workers," says Jeff Williamson, vice president of warehouse operations for PFG.

"Many of our workers who struggled to meet and maintain minimum error rate requirements are now able to reach and exceed required levels. Because our incentive system is tied to both productivity and error rates, voice has allowed more workers to earn incentives and bonuses, keeping them happier and more motivated."

Nestle Waters Reduces Idle Time By 41 Percent

Poland Spring, a division of Nestle Waters, has reduced idle time by 41 percent and is on track to save over $21,000 in fuel in 2008, thanks to advanced fleet management software from Cadec Global Inc., Manchester, NH.

Poland Spring had been using Cadec's Mobius TTS advanced fleet management software and on-board computers in its fleet of 40 trucks for the previous year, primarily for its paperless logging capabilities. In January 2008, it expanded its use of Mobius to include tracking idle time.

The fleet management team filtered the data by driver and posted the results and according to Chris McKenna, northeast inside fleet manager for the Wilkes Barre, PA-based bottler. "Driver behavior started to change almost immediately."

From January through May, Poland Spring achieved a 41 percent reduction in idle time–a total of 2,300 hours, or a run-rate of 5,100 hours annually. That's the equivalent of taking 12 cars off the road in terms of carbon emissions.

In addition, Poland Spring saved more than $9,000 in fuel during the five-month period, and is on track to save more than $21,000 in fuel in 2008.

"Results have exceeded our expectations and we were able to affect change much more quickly than we thought possible," says McKenna.

Tips For ReducingFuel Consumption

With fuel prices skyrocketing, Frisco, TX-based Transplace has developed a list of fuel conservation tips to help both carriers and OTRs endure rising fuel prices. The tips include:
• Plan routes through major cities during off-peak hours;
• Reduce deadhead and empty miles by laying over and waiting on the next closest load, if practical;
• Utilize low RPM shifting techniques for maximum fuel conservation;
• Ensure all equipment is properly maintained and all air/fuel filters are changed according to the manufacturer's specs;
• Become an EPA SmartWay Transport Partner certified carrier and apply all applicable SmartWay specs for over the road equipment;
• Deploy route optimization software to select routes with the fewest impediments;
• Examine driver incentives and training for fuel efficiency and idle reduction procedures.

Coca-Cola To Add Hybrid Trucks To Fleet

Coca-Cola Enterprises Inc. is adding 142 hybrid electric trucks to its fleet, giving the company the largest hybrid electric truck fleet in North America.

The Atlanta-based company says the move is part of an energy conservation effort and notes that it will add the hybrid electric delivery trucks throughout the United States and Canada when the addition to its Midwest Coca-Cola Bottling Co. facility is complete in August.

CEO John Brock says the efforts, "coupled with other energy saving measures here in the Twin Cities and elsewhere, are not only a commitment to the environment, but they're also good business practices."

The company says the trucks are the largest hybrid electric delivery trucks in North America, costing about $85,000 each. However, the company also said the trucks, which cost more than traditional delivery trucks, will produce 37 percent fewer emissions and use 32 percent less fuel than standard trucks, thus offsetting the cost of the initial investment over time.

Global Cold Storage Capacity Increasing: IARW Report

Public refrigerated warehouse (PRW) storage capacity is increasing around the world, according to the International Association of Refrigerated Warehouses' (IARW) Global Cold Storage Capacity Report.

The Washington-based IARW has collected data for the 2008 report from over 40 countries. In addition, IARW has compiled profiles of national PRW markets in 18 countries, including several emerging and developing markets. This is also the first year that the report has shown a full decade of industry growth.

IARW monitors PRW capacity in 45 nations and regions. In those places where data was collected in 2006, capacity increased in 17 places while it remained flat in six nations. Data in other areas was insufficient to draw any conclusions.

Areas showing the greatest increases were France, Germany, the Netherlands, Spain and Brazil. Total global capacity for these countries for 2008 is 6,350.32 million cubic feet (179.82 million cubic meters), which represents a 15 percent increase from 2006.

This growth suggests a worldwide trend toward increasing cold storage capacity driven by a greater reliance on the cold chain to meet growing trade and consumption rates of perishable products. Overall global capacity in 2008, including the 25 original countries surveyed, is approximately 247.77 million cubic meters (8,749.97 million cubic feet).

This report also marks the first time that IARW has been able to collect accurate data for the cold storage industries in China and India since 1998. In both countries, there has been significant increase in capacity since then. China shows a 20 percent increase and India's capacity has more than doubled since 1998.

IARW has published the Global Cold Storage Capacity Report, the only resource for worldwide cold storage capacity statistics, every two years since 1998. The publication follows the release of the U.S. Department of Agriculture (USDA) National Agricultural Statistics Service's biennial summary of cold storage capacity in the United States.

In the United States, the USDA report shows that the public refrigerated warehouse (PRW) industry continues to dominate the overall cold storage industry. According to USDA, public general warehouse capacity totaled 2.50 billion gross cubic feet (71 million cubic meters) in 2007, accounting for 75 percent of the general cold storage in the U.S.

States that experienced the most significant gains in capacity are Illinois (three percent), Arkansas (32 percent) and Delaware (26 percent). Public general storage capacity increased three percent since 2005 and is 22 percent above the capacity of 10 years ago. Private and semiprivate general warehouse capacity totaled 822 million gross cubic feet (23 million cubic meters), or 25 percent of the general gross refrigerated space. Today, PRWs operate nearly 1.68 billion cubic feet (47 million cubic meters) more than their private counterparts.

"The cold storage industry is continuing to grow rapidly around the world," notes Bill Hudson, IARW president and CEO. "Additionally, we are seeing more and more companies choose to rely on the expertise of the third party logistics industry to meet their storage and distribution needs."

CPG Industry Maintains Strong Sales Growth: Report

U.S. consumer products manufacturers experienced a 10.6 percent sales growth this past year and delivered a relatively strong shareholder return of 7.3 percent in 2007, despite a challenging economic climate, according to The Food, Beverage and Consumer Products Industry: Achieving Superior Financial Performance in a Challenging Economy 2008, a report conducted by PricewaterhouseCoopers LLP (PwC) for the Grocery Manufacturers Association (GMA), Washington.

The report states that even in a difficult economy with ever-increasing commodities prices, agile consumer product companies can achieve growth by adopting successful practices in key strategic areas.

The report found that the aggregate market index, known as the CPG Market Weighted Index, closely tracked with the Dow Jones Industrial Average and S&P 500 for most of 2007 and was in line with the market for the first two years of the most recent three (2005-2007). Another key finding of the study is that while there is some exposure in sustainability reporting, in many cases, it can enhance a company's bottom line and shareholder value.

"The consumer products sector showed incredible resilience this past year in the face of a tough economy and we saw many companies using creative strategies to manage costs while delivering value to consumers," says Stephen Sibert, GMA senior vice president for industry affairs.

"However, we see this difficult environment as likely to continue, which means that consumer goods manufacturers and retailers will be confronting new challenges and they'll need to stay nimble and initiate more collaboration in order to continue their growth," says Sibert.

Large food companies attribute 45 percent to 55 percent of their products' price to raw material costs and the industry is not likely to see relief soon. The GMA-PwC study reveals how companies can harness the same forces driving up input costs to enhance financial performance.

"While there is no ‘one size fits all' solution to the economic challenges facing CPG makers, we believe our report highlights successful practices that any company can adopt to achieve superior performance," says John Maxwell, consumer packaged goods and retail industry leader for PricewaterhouseCoopers.

"CPG companies need to maintain their initiatives to expand in emerging markets but do so in a manner that effectively balances the opportunities for growth and cost management with the risk of sourcing from foreign markets and understanding local consumer preferences.

"Also, CPG companies need to collaborate with retailers in innovative ways to continue to provide value to the consumer. Finally, we learned that leading CPG companies recognize the value of sustainability reporting and in many cases, are being rewarded for it."