Food for Thought: How an Industry Vertical Expands Your Menu of Logistics Options
This final post in our three-part series about the critical role of vertical expertise in elevating supply chain efficiency looks at the opportunities for improvement in a major industry vertical: Food and Beverage/Consumer Packaged Goods (F&B/CPG).
In our previous post, Helping Manufacturers to Make the Right Transportation Choices by Andrew Bremer, we described how the rigors of just in time operations define the manufacturing vertical. One of the main characteristics that shapes the F&B/CPG industry is a heavy focus on track and trace and on-time service metrics.
A powerful way to raise your service game is to learn how other companies in the F&B/CPG vertical are working to enhance their performance in this area. The industry offers a wealth of knowledge and technical innovations that you can tap into.
For example, a relatively new innovation is a portable communications unit stowed on a trailer. The device gives standard Electronic Data Interchange (EDI) updates with location in terms of latitude and longitude and reefer temperature settings. The data is relayed to the shipper or logistics service provider, enabling these parties to track the exact whereabouts of the trailer regardless of whether the unit is equipped with GPS tracking or EDI connectivity (I actually learned of this technology during a routine meeting with other managers in the vertical, an example of how this type of collaboration works!).
In addition to technological ideas, vertical communities also share operational experiences.
Take, for example, the fines and penalties that are often levied for late deliveries in the industry. The vertical can be leveraged to learn how others are mitigating these fines. How are other shippers coping with missed delivery appointments that can keep trucks waiting at a booked-up distribution center for days? Are you aligned with other players in the vertical on the management of accessorials?
There are opportunities for collaborating across groups of shippers as well. Perhaps companies that ship from or deliver to the same consignees can leverage each other’s freight networks and provide carriers with reload opportunities. Of course, shippers must be willing to cooperate in this way, and the relationships can often be facilitated by an external party, such as a logistics service provider. It’s difficult to pull off this type of collaboration, but the task is significantly easier within a community of like-minded shippers.
One of the most common questions that service providers get from their shipper customers is, “What are other shippers doing, and how do we compare to them?” They also like to know what practices are standard in the industry. Again, it is easier to provide answers in a vertical setting where apples-to-apples comparisons are more common.
This commonality can also be harnessed to help shippers keep track of legislative changes that are of particular relevance to F&B/CPG players. Even tracking general legislation that pertains to all verticals is more effective within a community, because shippers can discuss the nuances that apply to their businesses.
As an example, check out Jason Craig’s Transportfolio blog post The Latest: What to Expect in Transportation Regulation. Jason mentions draft rules covering the sanitary transportation of food, for instance. This rulemaking is of interest F&B/CPG shippers, and experts like Jason can disseminate relevant details to the community.
Finally, everyone wants to be ahead of the innovation curve, and membership of a vertical can help shippers to “think out of the truck” and be more creative. It comes back to the power of collaboration; how the sharing of experiences and best practices sparks new ideas.
An example that pertains to the F&B/CPG vertical is the shipping of products on standard pallet configurations. The non-standard pallets used in a number of other industries do not usually feature in the F&B/CPG business. This commonality allows shippers in the vertical to focus on developing ways to increase pallet payloads and cubes, and to use TMS solutions to identify other opportunities for improvement. How can systems for updating weights and pallet specs when packaging changes be streamlined? These types of issues often surface during roundtable discussions with other members of the vertical and open the way to creative solutions.
In today’s intensely competitive markets, companies must pursue every possible route to higher performance levels or be quickly overtaken by their rivals. Participating in a supply chain community built around an industry vertical is one route that shippers and service providers need to consider.