Food Logistics Jan/Feb 2016 by Supply+Demand Chain/Food Logistics

HOW DATA METRICS HELP LIFT TRUCK MANAGEMENT

ELECTRONIC FREIGHT SECURITY

MIDWEST READY FOR A REBOUND

Food Logistics

WAREHOUSE SOFTWARE

INNOVATION TRACKS CHANGING MARKET DEMANDS

Global Supply Chain Solutions for the Food and Beverage Industry

•

These automated palletizers can put cases on a pallet of any size. Individual SKUs are tracked and it is exactly known where an SKU is placed on a pallet.

WAREHOUSE AUTOMATION

SHIFTS INTO HIGH GEAR THE DEMANDS ASSOCIATED WITH OMNI-CHANNEL FULFILLMENT, SKU PROLIFERATION AND INCREASED EFFICIENCY IS GENERATING MORE INTEREST IN THE BENEFITS OF AUTOMATING THE WAREHOUSE.

FLEET MANAGERS’ FORECAST:

2016 RAISES THE BAR FOR REGULATIONS, DRIVER SHORTAGES AND MORE Issue No. 173 January/February 2016

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FoodLogistics.com

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ON THE MENU

OCTOBER 2015 ISSUE NO. 171

ON THE MENU

JAN/FEB 2016 ISSUE NO. 173 COLUMNS FOR STARTERS

A New Spin On The Familiar 6

Regulations and technology are familiar themes that could throw us a curve in 2016. By Lara L. Sowinski COOL INSIGHTS

A Fundamental Shift In Ocean Transport 12

Containerized carriers are commanding a bigger share of global reefer cargo. By Lara L. Sowinski

COVER STORY

FOOD (AND MORE) FOR THOUGHT

Warehouse Automation Shifts Into High Gear

Meeting the demands associated with omni-channel fulfillment, SKU proliferation, and increased efficiency is generating more interest in the benefits of automating the warehouse. By Lara L. Sowinski

SECTOR REPORTS

Are We Ready For The ‘Internet of Food’? 48

Smart e-health systems could improve people’s health and the health system itself. By Maged N. Kamel Boulos

WAREHOUSING

How Data Metrics Revolutionizes Lift Truck Management 30

Improved management driven by telemetry enables fleet right sizing. By Elliot Maras

DEPARTMENTS

Supply Scan 10 Food on the Move 45 Marketplace 8

TRANSPORTATION

Electronic Freight Security (EFS)—What To Expect 34

A primer for the setup and implementation of an EFS program. By FreightWatch International SOFTWARE & TECHNOLOGY

38 Innovation Tracks Changing Market Demands

Software designed for the warehouse environment responds to new user requirements. By Elliot Maras

FEATURE

THIRD-PARTY & REFRIGERATED LOGISTICS

Fleet Managers’ Forecast: 2016 Raises The Bar 22

Challenges relating to new regulations, driver shortages and more abound. By Elliot Maras

ECONOMIC DEVELOPMENT

Ready For A Rebound

The Midwest region still has its share of challenges recovering from the recession, but opportunity and availability for development exists. By Eric Sacharski

WEB EXCLUSIVES • How Denny’s Franchisees Manage Purchasing Through Their Supply Chain Oversight Committee • Blog: How Logistics Made A Difference In Hostess Brands Turnaround • FL’s Educational Webinar Series www.FoodLogistics.com

Published and copyrighted 2016 by AC Business Media Inc. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording or any information storage or retrieval system, without written permission from the publisher. Food Logistics (USPS 015-667; ISSN 1094-7450 print; ISSN 1930-7527 online) is published ten times per year in Jan/Feb, March, April, May, June, July, August, September, October and Nov/Dec by AC Business Media Inc., 201 N. Main Street, Fort Atkinson, WI 53538. Periodicals postage paid at Fort Atkinson, WI 53538 and additional mailing offices. POSTMASTER: Send address changes to Food Logistics, PO Box 3605 Northbrook, IL 60065-3605. Canada Post PM40612608. Return Undeliverable Canadian Addresses to: Food Logistics, Station A, P. O. Box 25542, London, ON N6C 6B2. Subscriptions: US, one year $45, two years $85; Canada & Mexico, one year $65, two years $120; International, one year $95, two years $180. All subscriptions must be paid in U.S. funds, drawn on U.S. bank. Printed in the USA.

FOOD LOGISTICS | JANUARY/FEBRUARY 2016

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JANUARY/FEBRUARY 2016 | FOOD LOGISTICS

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FOR STARTERS

FROM THE EDITOR’S DESK

A NEW SPIN ON THE FAMILIAR

A SOWINSKI

s we move further into 2016, it’s clear that two familiar topics will continue to stay front and center for food and beverage supply chains this year: regulations and technology. On March 31, the U.S. Food and Drug Administration is due to release the Food Safety Modernization Act’s Sanitary Transport of Human and Animal Food rule in its final form. On the surface, compliance with this rule appears straightforward to those in our industry who are already following best practices when it comes to maintaining sanitary conditions for truck trailers and railcars; keeping detailed records; and assuring temperature-sensitive products are handling properly. But, the devil is in the details. The final rule could clarify some questions for our industry, and/or raise some new concerns. Either way, we will keep a close eye once the rule is released and keep readers updated. Meanwhile, technology is helping support safer and more efficient, responsive and profitable supply chains. The Internet of Things is one example. It promises to usher in true supply chain visibility and interconnectivity in ways that we’ve only dreamt of previously. Technology is fundamentally shaping the way supply chains work and how consumers shop—and it’s happening at lightning speed. And on a related note, our annual FL100+ list of software and technology providers who are key to our

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industry most recently appeared in the November/December 2015 issue. This is an important and growing resource guide for our readers. Unfortunately, incomplete information was printed for seven companies on the FL100+. We very much regret the error and encourage Food Logistics’ readers to visit these companies’ Web sites to learn more about their products and services: • FourKites www.fourkites.com • IFS North America www.ifsworld.com • Instructional Technologies www.instructiontech.net • Interlink Technologies www.thinkinterlink.com • MercuryGate www.mercurygate.com • NECS, Inc. www.necs.com • WITRON Integrated Logistics www.witron.com Finally, AC Business Media’s Supply Chain Network, which includes Food Logistics and our sister publication, Supply & Demand Chain Executive, has reorganized staff (see masthead) to expand content and reach for both brands while remaining focused on the specific needs of each magazine’s audience. Likewise, FL and SDCE are excited to start 2016 with a fresh and contemporary redesign. Enjoy the read.

LARA L. SOWINSKI, , EDITORIAL DIRECTOR LSOWINSKI@ACBUSINESSMEDIA.COM

DETAILS

Published by AC BUSINESS MEDIA INC. 201 N. Main Street, Fort Atkinson, WI 53538 (800) 538-5544 • www.ACBusinessMedia.com

WWW.FOODLOGISTICS.COM PRINT AND DIGITAL STAFF Group Publisher Jolene Gulley Associate Publisher Judy Welp Editorial Director Lara L. Sowinski lsowinski@ACBusinessMedia.com Editor Ronnie Garrett rgarrett@ACBusinessMedia.com Managing Editor Elliot Maras emaras@ACBusinessMedia.com Associate Editor Carrie Mantey cmantey@ACBusinessMedia.com Assistant Editor Eric Sacharski esacharski@ACBusinessMedia.com Ad Production Manager Cindy Rusch crusch@ACBusinessMedia.com Creative Director Kirsten Crock Senior Audience Development Mgr Wendy Chady Audience Development Mgr Angela Kelty ADVERTISING SALES (800) 538-5544 East Coast Sales Manager Judy Welp (480) 821-1093 jwelp@ACBusinessMedia.com Midwest/West Sales Manager Carrie Konopacki (920) 542-1236; Fax: (920) 542-1133 201 N. Main Street, Fort Atkinson, WI 53538 ckonopacki@ACBusinessMedia.com National Automotive Sales Tom Lutzke (630) 484-8040; tlutzke@ACBusinessMedia.com EDITORIAL ADVISORY BOARD Smitha G. Stansbury, partner, FDA & Life Sciences Practice, King & Spalding Raymond J. Segat, director, cargo & business development, Vancouver Airport Authority Dr. Barbara Rasco, professor and interim director, School of Food Science, Washington State University Adriano Melluzo, vice president, national sales, Ryder CIRCULATION & SUBSCRIPTIONS PO Box 3605, Northbrook, IL 60065-3605 (877) 201-3915, Fax: (800) 543-5055 Email: circ.FoodLogistics@omeda.com LIST RENTAL Elizabeth Jackson, Merit Direct LLC (847) 492-1350, ext. 18, Fax: (847) 492-0085 Email: ejackson@meritdirect.com REPRINT SERVICES Carrie Konopacki (920) 542-1236; Fax: (920) 542-1133 ckonopacki@ACBusinessMedia.com AC BUSINESS MEDIA INC. Chairman Anil Narang President and CEO Carl Wistreich Executive Vice President Kris Flitcroft CFO JoAnn Breuchel VP Content Greg Udelhofen VP Marketing Debbie George Digital Operations Manager Nick Raether Digital Sales Manager Monique Terrazas Published and copyrighted 2016 by AC Business Media Inc. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording or any information storage or retrieval system, without written permission from the publisher.

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SUPPLY SCAN

NEWS FROM ACROSS THE FOOD SUPPLY CHAIN Daily Updates at FoodLogistics.com

Campbell Soup Co. Reverses Stance: Supports Mandatory GMO Labels NEW DIETARY GUIDELINES Encourage Healthy Eating Patterns The U.S. departments of Health and Human Services and Agriculture released updated nutritional guidelines that encourage Americans to adopt a series of science-based recommendations to reduce obesity and prevent chronic diseases like Type 2 diabetes, hypertension, and heart disease. The 20152020 Dietary Guidelines for Americans is the nation’s resource for evidence-based nutrition recommendations and serves to provide the general public, as well as policy makers and health professionals, with the information they need to make informed choices about their diets at home, school, work and in their communities.

Campbell Soup Co. announced its support for federal legislation to establish a single mandatory labeling standard for foods derived from genetically modified organisms (GMOs), reversing a previous position. Campbell is optimistic a federal solution can be established in a reasonable amount of time if all the interested stakeholders cooperate. Campbell is prepared to label all of its U.S. products for the presence of ingredients derived from GMOs, not just those required by pending legislation in Vermont.

Shrimp Peeled By Slaves In Thailand Finds Its Way To Global Supply Chains Pervasive human trafficking has helped turn Thailand into one of the world’s biggest shrimp providers. Despite repeated promises by businesses and government to clean up the country’s $7 billion seafood export industry, an Associated Press investigation found shrimp peeled by modern-day slaves is reaching the U.S., Europe and Asia. The problem is fueled by complicity among police and authorities. Arrests and prosecutions are rare. Raids can end up sending migrants without proper paperwork to jail while owners go unpunished.

WALMART TO CLOSE 269 STORES, INCLUDING WALMART EXPRESS Wal-Mart Stores, Inc. plans to close 269 stores in the U.S. and globally. The company will close 154 locations in the U.S., including the its 102 smallest format stores, Walmart Express, which had been in pilot since 2011. Walmart will focus on strengthening Supercenters, optimizing Neighborhood Markets, growing the e-commerce business and expanding pickup services for customers.

U.S. BEEF IMPORTS

US Imports of Beef 2014 vs. 2015 (Jan-Nov) $140

2015 Jan to Nov General CIF Value US$

$120 MILLIONS

U.S. imports of beef have increased 63 percent in 2015 versus 2014 (Jan-Nov). Most foreign beef imports come from Brazil which skyrocketed in beef exports to the U.S. So far in 2015 (JanNov), the U.S. imported $77 million in beef products from Brazil. This was an increase of nearly 117 percent. See the chart for other top countries the U.S. imports beef from.

2014 Jan to Nov General CIF Value US$

$110

BRAZIL URUGUAY MEXICO

$80

AUSTRAILIA

$60

NEW ZEALAND

$40

JAPAN

$20

CANADA

GENERAL TOTAL

MILLIONS

2015 Jan to Nov General CIF Value US$ 2014 Jan to Nov General CIF Value US$

$10 $20 $30 $40 $50 $60 $70 $80

Source: Datamyne.com

FOOD LOGISTICS | JANUARY/FEBRUARY 2016

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FOOD ON THE MOVE

LOGISTICS TRENDS IN OUR INDUSTRY

FMCSA ISSUES RULE TO PROTECT DRIVERS FROM EMPLOYER COERCION

The U.S. Department of Transportation’s Federal Motor Carrier Safety Administration (FMCSA) has published in the Federal Register a final rule to help further safeguard commercial truck drivers from being compelled to violate federal safety regulations. The rule provides FMCSA with the authority to take enforcement action not only against motor carriers, but also against shippers, receivers, and transportation intermediaries. The rule addresses three key areas concerning driver coercion: procedures for commercial truck drivers to report incidents of coercion to the FMCSA, steps the agency could take when responding to such allegations, and penalties that may be imposed on entities found to have coerced drivers.

TSA TO RAISE U.S. EXPORT RATES The Transpacific Stabilization Agreement (TSA) has recommended a general rate increase (GRI) in February in the amount of $100 per 40-foot container (FEU) for cargo moving via the U.S. West Coast, and $200 per FEU for cargo moving via the U.S. East and Gulf Coasts, according to American Shipper. The GRI will not apply to refrigerated shipments, which are rated separately.

U.S. LAUNCHES PRE-INSPECTION PILOT FOR MEXICAN AG IMPORTS The U.S. and Mexico inaugurated a officers will pre-inspect low-risk, cargo pre-inspection program pilot at high-volume agricultural commodities Mesa de Otay, Tijuana, Mexico, accordthat are part of the U.S. Department ing to the Sandler, Travis & Rosenberg of Agriculture’s national agriculture Trade Report. Under this pilot, U.S. release program. CBP states that this Customs and Border Protection (CBP) initiative aims to improve the flow of officers and agriculture specialists trade and reduce border wait times working alongside Mexican customs and transaction costs.

DAT SOLUTIONS’ MONTHLY FREIGHT REPORT

Who’s Complaining About Low Fuel Prices? Mark Montague is industry rate analyst for DAT Solutions, which operates the DAT network of load boards and RateView rate-analysis tool. He has applied his expertise to logistics, rates, and routing for more than 30 years. He is based in Portland, Ore. For information, visit www.dat.com.

Retail diesel prices are below $2 a gallon in parts of the country, yet truckers in some circles are grumbling. Why complain? There are a few things to consider, and they affect the rates that for-hire carriers can earn.

Lower Spot Rates Roughly 35 to 40 percent of truckload freight is “exception” freight—not under contract—and much of that is priced per transaction using spot market rates. Paid to the carrier by a freight broker or 3PL, these rates are typically 10 to 15 percent lower than the rates that shippers pay to carriers as part of an ongoing contract. Right now the spread between contract and spot rates is growing, and the declining price of fuel is a factor. Spot rates are “all-in” rates; they theoretically combine a line-haul portion and a fuel surcharge. This rolled-up rate has dropped much more sharply than the fuel surcharge has dropped for carriers hauling freight under contract.

Weak Players Survive Ordinarily, low freight rates and an uncertain economy would starve small and poorly-managed carriers. Yet today’s

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By Mark Montague

fuel prices allow many to hang on. Lower fuel costs also allow trucking companies to keep older, less fuel-efficient vehicles on the road longer. That means more competition and less bargaining power for carriers.

A Rebound? Changes in spot market rates typically lead changes in contract rates by three to six months. The line-haul portion of spot market rates has been relatively flat since October, which indicates stability for transportation budgets in the first half of 2016. Right now there are opportunities for shippers to negotiate favorable long-term contracts with freight brokers and 3PLs who can offer competitive pricing by using mid-sized and smaller fleets. Capacity is abundant and in order for it to stay that way, the industry needs healthy truckers across the board, from big for-hire fleets to onetruck owner operators. For carriers, the slow season is a time to

• Reefer spot market load volume rose 19% in December compared to November, and capacity added 2%. The resulting load-to-truck ratio rose 16%, from 4.2 to 4.9 loads per truck as a national average, meaning there were 4.9 refrigerated loads available for every reefer truck posted on DAT load boards. take advantage of low fuel prices to adjust their networks and routes to better serve their customers. When freight picks up again in the spring, they’ll be ready.

www.foodlogistics.com

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COOL INSIGHTS

BY LARA L. SOWINSKI

A FUNDAMENTAL SHIFT IN

OCEAN TRANSPORT O SOWINSKI

• Maersk Line, which controls 20 percent of the global market in terms of reefer capacity, purchased 30,000 new reefer containers in 2015 and plans to buy more in the years to come.

ver the past 15 years, specialized reefer carriers have lost their majority control of seaborne perishable trade to containerized carriers. In 2000, specialized carriers held 60 percent of the market. Today it’s closer to 26 percent or less. Meanwhile, container carriers are investing heavily in their reefer fleets. Maersk Line, which controls 20 percent of the global market in terms of reefer capacity, purchased 30,000 new reefer containers in 2015 and plans to buy more in the years to come, according to Shereen Zarkani, global head of reefer management, in an interview with ShippingWatch. That’s not all. The global shipping giant reinstated its SeaLand brand last year targeting the intra-Americas market, with reefer business figuring prominently for the carrier. In February, SeaLand launched its SeaLand Atlantico service linking Mexico with Philadelphia. Mexican exports of avocados, lemons and tomatoes are among the perishables that now have a viable ocean transportation option. “We are pleased to provide Mexican exporters an alternative to land transport with a high level of security and care for their products. With the SeaLand Atlantico customers avoid transloading cargo, congestion at the border and limited truck power between countries,” remarked Jorge

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Monzalvo, commercial manager for SeaLand Mexico. Other containerized carriers are making similar investments in their reefer business. Hamburg Sud added 400 reefers to its fleet last fall. The new boxes feature Carrier Transicold’s XtendFRESH system that slows the ripening process of fresh produce by actively managing oxygen and CO2 levels and removing ethylene, the hormone generated during the ripening process. An uptick in activity on South American trade lanes also prompted Hapag-Lloyd to boost its reefer fleet with an order for 6,000 boxes in August. This follows the carrier’s order last April for five new 10,500-TEU ships with capacity for up to 2,100 reefers that will be deployed primarily on north-south lanes in the Americas region. Hapag-Lloyd also acquired the container operations of Chile’s CSAV in December 2014, giving the carrier additional reefer capacity and boosting its position in the region. As for specialized reefer carriers, the sharp drop in oil prices is making the fuel-guzzling vessels competitive again and slowed the scrapping of old vessels as well, according to a shipping consultant at DynaLiners. This trend is obviously a temporary one, however. Seatrade, the world’s largest specialized reefer carrier, also sees the benefit of transporting temperature-controlled cargo in containers and is changing its business strategy accordingly. The carrier ordered four 2,200 TEU vessels last year from China’s Zhejian Yangfan shipyard with an option to order four more. “As opposed to the reefer-heavy ships generally deployed by container liner operators in the southern

hemisphere trades, the new Seatrade vessels will be full-reefer-capacity units,” said the DynaLiner shipping consultant in an interview with The Maritime Executive. “This means they will carry a full load (by deadweight) of filled, almost exclusively 40-foot high-cube refrigerated containers connected to 670 to 770 plugs.” The new Seatrade vessels are purpose-built for accessing small niche ports in areas where produce is grown. With speeds up to 20 knots and a maximum draft of 9.2 meters they are “fast and shallow” yet designed to hold three times the pallet capacity compared to Seatrade’s largest conventional ships.

Box ports prepping for more reefers The migration of reefer business from specialized carriers to containerized carriers is also driving changes at major box ports in the U.S. and other global regions. South Carolina Ports Authority (SCPA) says the Port of Charleston experienced an impressive 38 percent increase in reefer cargo volume from 2011 to 2015. Pork and poultry are top refrigerated exports at the Port, while meat from Australia and New Zealand are leading refrigerated imports. Cold storage capacity near the Port of Charleston is supporting the growing reefer business. In January, SCPA celebrated the newly-expanded New Orleans Cold Storage (NOCS) facility in North Charleston. The expansion project increased the facility’s blast freezing capabilities by 50 percent and added 81,000 square feet to the existing facility, bringing the total to 136,000 square feet of cold storage.

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2/11/16 9:20 AM

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COVER STORY Warehouse Automation

BY LARA L. SOWINSKI

WAREHOUSE

AUTOM Meeting the demands associated with omnichannel fulfillment, SKU proliferation and increased efficiency is generating more interest in the benefits of automating the warehouse.

nvestments in warehouse automation have remained fairly strong in recent years and the consensus is that more growth is on the horizon, according to executives in the sector. However, the food and beverage space comes with unique challenges and opportunities. What are they and how are warehouse operators, automation equipment manufacturers and integrators responding? This is what executives shared with Food Logistics …

• Intelligrated’s accumulation conveyor and end-of-line palletizers handle packaged fruit.

Mark Diehl, business development manager, BEUMER Corporation (www.beumergroup.com)

Due to service level requirements increasing all the way to same-day delivery, the entire supply chain for food and beverage, from manufacturers to wholesalers to retailers, is leading to higher adoption levels of automation. Adding in the dilemma of dramatic shortage of labor, especially during holiday peaks, food and beverage companies are forced to increase their respective automation levels. Home delivery providers are taking on more less-than-full case picking in their operations, and service level and labor shortage issues are creating higher demand for unit sorters and multi-shut-

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tle technologies, for example. Automation provides a supremely reliable method to efficiently track

and trace the product through the supply chain at high levels of accuracy. That is, the use of technology

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2/12/16 1:44 PM

• RSW Gripper from DMW&H

MATION SHIFTS INTO HIGH GEAR Paul Laman, vice president at DMW&H (www.dmwandh.com)

such as scanners, photo-eyes and divert confirmations allow the fulfillment process to continually track the

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product in each step of the process— from picking, to sortation, onto the truck, and in transit.

A regular and ongoing challenge for the food and beverage industry is storage and order fulfillment costs. With the proliferation of SKUs, the inventory becomes more granular, resulting in lower storage density. This puts a greater emphasis on the need to optimize the storage configurations. Tall and narrow aisle racking allows for better storage density, especially for the slower moving SKUs. Secondly, with the increasing diversity in case sizes and customer requirements for more precisely organized and loaded pallets, greater information and data is needed to create ideally configured mixed SKU pallet loads; however, to do so introduces additional challenges for the information systems and pickers, slowing them down. With the additional number of SKUs in the warehouse, the pickers need to travel even greater distances to build their order pallet; these increased distances degrade picker productivity. One of the solutions to solve these challenges is to utilize an automated system that incorporates mixed case palletizing. With the arrival of the latest in case gripper technologies,

• Warehouse automation solutions from Power Automation Systems (PAS) can increase storage capacity by 50 to 100 percent.

JANUARY/FEBRUARY 2016 | FOOD LOGISTICS

2/12/16 1:44 PM

the supply chain for success. Challenge 1: Minimize unplanned downtime. Realizing an efficient supply chain for time-sensitive food operations requires reliable performance from each link. For warehouse automation, the key is to ensure automated equipment can handle the required SKUs at target throughput rates. Challenge 2: Implement consistent standards. Implementing the latest technology to share equipment and maintenance data between sites can leverage single-site initiatives to benefit the entire distribution network. Data sharing drives efficiency improvements and establishes consistently high performance standards throughout the supply chain.

COVER STORY continued

Cory Hypes, executive vice president, Power Automation Systems

(www.powerautomationsystems.com)

â&#x20AC;˘ Power Automation Systemsâ&#x20AC;&#x2122; (PAS) PowerStor technology retrieves a pallet from the deep storage system.

three or more cases can be moved per cycle; productivity increases, and these enhanced palletizing systems become much more justifiable.

John Sorensen, senior vice president and general manager, lifecycle support services, Intelligrated (www.intelligrated.com)

The food distribution landscape features familiar e-commerce and omnichannel fulfillment challenges, such as SKU proliferation and faster cycle times, which continue to push operations to implement automated systems for increased accuracy, reliability and speed. But this year, the industry is also tasked with accommodating new food safety regulations that affect the entire supply chain. The demand for more interconnected, data-driven logistics processes and emphasis on tracking and tracing product offers new challenges, but also opportunities to maximize the efficiency of material handling systems. Automated systems within the four walls can actually work to set up other parts of

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The short-term opportunities will focus on maximizing existing infrastructure efficiency and preparing for ongoing challenges that arise from customer preference, regulatory requirements, labor costs, and sustainability initiatives. Through automation, companies can solve these challenges in a number of ways. First, warehouse automation has the capability to increase storage capacity by 50 to 100 percent. This provides companies with options to reduce offsite storage and transportation costs. In addition, by reducing the amount of space required for storage, a company can increase their production or packaging capabilities within their existing facilities. Second, warehouse automation can increase the throughput of a facility while minimizing labor costs with the use of robotics. Storage and retrieval systems, along with robotic picking systems, can support on-demand fulfillment and faster inventory turns. Finally, inherent to any warehouse automation solution is better control and tracking. Any company can benefit from the use of WMS or WCS software systems that manage, monitor, and direct all inventories activities.

Tom Oâ&#x20AC;&#x2122;Dette, director of engineering, Retrotech, Inc. (www.retrotech.com)

A main goal in warehouse automation is gaining efficiencies. Companies need to review their processes, identify workflow inefficiencies, safety concerns, and opportunities to improve with either modernization, expansion, or greenfield options. Self-evaluation is difficult because companies are engaged in multiple fast-moving, need-driven initiatives ranging from operations to market analysis. Their concern is often that automation systems restrict their ability to adapt on the fly. In fact, automation provides the flexibility to adapt quickly and seamlessly with minimal manual retraining. Centralization of production and distribution centers is a trend that aims to increase efficiency and decrease supply chain costs. Upfront costs and logistics of that transition can be tough to navigate, but with sufficient planning and technical support, returns on investment can be substantial. SKU proliferation can create production, storage, distribution, and financial challenges. We are working closely with our customers to perform complex data analyses to provide predictive analytics for system design, planning and reliability. Our customers are embracing SKU proliferation as an opportunity to grow business and to maintain efficiency. Cultivating and maintaining a skilled workforce can be difficult. Improved automation services can bridge the gap between talent and task while also decreasing the amount of time spent training.

Brian C. Neuwirth, vice president, sales and marketing, UNEX Manufacturing (www.unex.com)

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COVER STORY continued

new buyers that are willing to embrace new distribution and sales channels with faster fulfillment.

John Clark, marketing manager, viastore (www.viastore.com)

• Automation, like this multiaisle AS/RS from viastore, offers increased inventory accuracy to address factors like SKU proliferation, but automation alone isn’t the complete answer. Adding intelligent software to the automation allows food companies and their partners to adhere to FSMA and other tracking and food safety requirements.

The trend of online ordering of food continues to grow. For food producers used to working with stores, selling to the end-consumer via e-commerce is different for them as online ordering tends to be much more case- and each-picking orientated. It also comes with greatly increased packaging requirements (consider the ramifications of shipping temperature-controlled items cross country without a refrigerated truck). This “larger volume of smaller orders” requirement may cause some to look into outsourcing, which could be an opportunity for food-related 3PLs to ramp down from pallet and case picking to case and each picking, or for e-commerce fulfillment companies used to each picking to enter the temperature-controlled distribution world. There are also start-up companies offering not just completed meals, but the entire meal package (all the ingredients) so that the customer can prepare the meal at home. Order fulfillment for this will become more difficult as that business model ramps up, and those companies might look to the 3PLs for help. When it comes to SKU proliferation, faster inventory turns, and addressing the requirements of the Food Safety Modernization Act (FSMA), it requires more than

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AUTOMATION WILL PLAY CENTRAL ROLE IN FOOD PROCESSING PLANTS OF THE FUTURE In a white paper, “Recipe for Change: The Flexible Food Processing Plant of the Future,” commissioned by the Industrial Asset Management Council (IAMC) and the Society of Industrial and Office Realtors (SIOR), a team of researchers explored how new approaches, including design innovations, emerging technologies, policy prescriptions, and changes in mindset could increase flexibility, adaptability and reuse for future food processing plants. More It is an important effort considering today’s new food processing plants have a lifecycle of 20 to 30 years on average, due intelligent to fast-changing business cycles, along with new and quickly robots will evolving consumer preferences and technology advancements. make their This is dramatically shorter than food processing plants of way into the previous generations, many of which operated for decades before becoming obsolete. industrial According to the white paper, automation is integral to the sector. design and operation of the food processing plants of the future. “The prototype facility features fully automated meat processing, powered by next generation robotic arms with guided systems for precision cuts every time, humanoid robots with artificial intelligence, and driverless vehicles for warehousing and loading. The use of automation embedded in the skid modules, as well as the fleet of humanoid robots and vehicles, results in a safer work environment and a more efficient and productive facility, able to run 24 hours, seven days a week, if needed,” the paper states. Pork and lamb processors are among those who are leading the adoption of automation. “With the introduction of technologies such as x-ray, ultrasound and enhanced vision systems to identify optimal spots for cutting, automation solutions are becoming more sophisticated, capable of handling more diverse carcass shapes,” notes the paper. Meanwhile, “The ability to reduce waste and improve yield through more precise carcass slicing could yield hundreds of thousands of dollars in savings—a major win for companies in a notoriously tight margin business,” adds John Patelski, executive vice president, Ghafari Associates LLC. Furthermore, evolving technology and increased use of new equipment will help drive prices down while fueling the aftermarket for used machinery, which will yield improved affordability, even for smaller manufacturers. More intelligent robots will make their way into the industrial sector, explain the white paper’s authors: “The use of robots also will gain traction, as humanoid robots with artificial intelligence, cognitive language and fine motor skills—currently in the developmental phase—are commercialized and made available for industrial settings.” Yiannis Aloimonos, a professor of computer science at the University of Maryland, notes that, “The commercialization of humanoid robots that can react and respond to verbal commands requires a synergy between engineering and computer science that is probably about four generations of technological improvements away.” He adds that, “While that sounds like a long time, generational cycles in technology are exceedingly short, so four generations is only about 15 years from now.” Food safety in the food processing plants of the future will also be greatly improved. “Smart technologies such as embedded sensors, molecular diagnostics, and biometric monitors can detect pathogens, reduce the risk of contamination, and help ensure quality control and food safety. These tools, networked to cloud applications, also reduce the need for human inspectors and manual form completion, making it easier and less expensive to comply with ever more stringent food safety regulations—even if such regulations change. Already, the cost of such technology is on the decrease, making it a more affordable option for food processors,” the white paper concludes.

warehouse automation. Specifically, it is the combination of automation with the software that makes the difference. Automation can speed up inventory turns and increase accuracy as it reduces the amount of product touches. The less you have people

in the facility handling product, the less likelihood there is for error and also damage. The software combined with the automation allows for the proper tracking functionality for FSMA, and when a recall occurs, the software allows for a faster and www.foodlogistics.com

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COVER STORY continued

more pinpointed response, which ultimately saves money.

Staci Cretu, marketing communications manager, Westfalia Technologies, Inc. (www.westfaliausa.com)

• An operator uses Westfalia’s warehouse execution system (WES), Savanna.NET, to track and trace inventory throughout the warehouse.

With the FDA’s stringent standards and regulations, food and beverage manufacturers and distributors are facing challenges associated with mitigating recalls and their detrimental effects. We are seeing an increased emphasis on automation and associated technology

in an effort to reduce, if not prevent, recalls through sophisticated trackand-trace capabilities. Over the last several years, the industry has become more aware of the abilities and advantages of automated storage and retrieval systems (AS/RS). As AS/RS becomes more widespread, it brings the natural progression of applying a warehouse execution system (WES). A WES combines the functionality of a warehouse control system (WCS) and a warehouse management system (WMS) to help direct, control and optimize internal material flow and order picking. As a result, warehouses are able to better meet growing demand, raise productivity, lower risks, boost throughput, increase inventory accuracy and enhance customer satisfaction. These systems provide warehouses with a new level of automated data visibility. When combined, an AS/RS and WES offer a business process maturity that many companies seek. Across the food and beverage industry, we continue to see increased demand for software solutions,

like a WES, that control the entire warehouse process to reduce the complexity of using several different “function-specific” applications.

Karl Hoegen, CEO of WITRON North America (www.witron.com)

Challenges: The traditional paradigms of distribution logistics are replaced by new developments such as Big Data, predictive analytics or by mostly self-guiding systems. Opportunities: Horizontal and vertical data transparency create the basis to make the right decisions in the short- and long-run. This leads to faster reactions towards requirements and demands and new capabilities to predict potential developments in time. With more than 2,000 realized projects, WITRON knows the horizontal process chain in the retail industry down to every little detail. In our automated warehouses, data is collected and processed from ERP systems, WMS, WCS, PLC, mechanical compartments, steering and powering, down to sensors and actuators.

R.O.I. (Retrofit. Optimize. Improve.) With increased demands on warehousing, such as SKU proliferation, shorter delivery times and traceability, it’s tempting to replace your legacy automation system. But there’s no need. Retrotech can help. • Retrofit. As the pioneer in live retrofits, we can upgrade your system without disrupting operations. • Optimize. Based on equipment analysis and system modeling, we will use our WCS/Enhanced WCS to maximize the potential of your existing automation systems. • Improve. Our team can upgrade all OEMs’ automation equipment to increase flexibility, capacity and efficiency. Increased ROI and zero downtime. Sweet. It does pay to make the most of what you already have. To learn more, visit www.retrotech.com/ROI or call 866-915-ASRS (2777).

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Automation gets strategic: Among the greatest challenges facing the food and beverage industry is determining exactly which logistics processes to automate. Major shifts in buyer preferences, online buying, and increased M&A activity are adding complexity that requires operating capability well beyond traditional

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manual methods. And, there is no shortage of innovative technology available to meet that need all across the value chain, including pallet optimization, robotics and automated truck loading to name just a few. But whether the required automation can pay for itself within the three- to five-year periods that many food and beverage companies need for profitability is another question. Rather than investing upwards of $25 million in automating everything in the warehouse and waiting 10 years for payback, most companies are implementing hybrid approaches, prioritizing labor intensive automation segments such as palletizing now, and rolling the return into additional segments later on. As market dynamics continue to present new

logistics challenges, decisions about what to automate can become as strategic as decisions on pricing, delivery time, quality or other competitive fronts. For automation vendors, the challenge is to work more closely with logistics teams to understand their business objectives and assist them in finding the right automation solutions mix that will address them.

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â&#x20AC;˘ Pallets of beverages are stored in a Wynright unitload ASRS system.

| FOOD LOGISTICS

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FLEET MANAGERS’ 2016 FORECAST

2016 RAISES THE BAR The ELD mandate weighs heavily while safety regs and carrier capacity issues loom.

•

wo thousand sixteen promises to be an exciting year for food haulers. No matter what role a company plays on the fleet landscape – carrier, shipper or freight broker – there are opportunities and challenges on several fronts. One challenge in particular, the nation’s driver shortage, will accelerate as more drivers retire. But 2016 is also a year for some major regulatory changes that call on every player to be up-to-speed on what they have to do. The electronic logging device (ELD) mandate marks one of the biggest regulatory changes in the fleet industry’s history, requiring many drivers to electronically comply with hours of service (HOS) rules that instruct a driver to take a 30-minute break with every eight hours. As more fleets begin adding the

BY ELLIOT MARAS

FOR REGULATIONS, DRIVER SHORTAGES AND MORE

electronic devices in 2016, some observers think more drivers will exit the business, further exacerbating the driver shortage. In addition to ELDs, some aspects of the government’s carrier safety ratings program could change. (See sidebar on page 23.) One set of regulations specific to the food industry that remain uncertain is the Food Safety Modernization Act (FSMA) sanitary transport rules for food (final rules are expected on Mar. 31, 2016). As currently written, they would require more recordkeeping and more extensive temperature monitoring, presenting new burdens for food haulers. Other food industry specific challenges in 2016 include a continuing expansion of foodservice at the expense of food retail, as well as expanding e-commerce. Both of these

trends bring a greater need for more LTL deliveries and local shipments.

ELD mandate challenges the industry The ELD mandate, while controversial within the transportation industry, will drive adoption of vehicle technologies such as GPS and telematics. The rule requires the use of electronic logbooks for all interstate commerce for trucks that are model year 2000 and newer. With certain exceptions, drivers must use ELDs to track their compliance with HOS regulations. While adding a new cost to fleets, the technology also brings some benefits. It will give new tools to fleet managers for supervising drivers and it will enable shippers, carriers and brokers to better manage contract rates and access lane availability.

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S S

L t d a

FMSCA TO OVERHAUL CARRIER SAFETY COMPLIANCE RATINGS The Federal Motor Carrier Safety Administration (FMSCA) has proposed a new system to update carrier safety compliance by integrating data from on-road inspections in addition to crash reports. The ratings will be updated monthly. The proposed rule will replace the three-tier “satisfactory-conditional-unsatisfactory” rating system for commercial carriers that has existed since 1982 with one “unfit” determination. This rating would reqire the carrier to improve or discontinue operations. The FMCSA would determine the safety fitness of 750,000 companies the current three-tier rating system monthly. By comparison, the agency (i.e., satisfactory-conditional-unsatisfactory) can currently only investigate 15,000 for determining safety fitness in favor of carriers annually, whereby only half a single determination of unfit. the companies receive a safety rating. The rule incorporates data sufficient standards. It would require that a pattern of non-compliance be documented for a carrier to fail one of the agency’s five behavior analysis and safety improvement categories. The current process does not permit the agency to use all of the on-road safety data in the Motor Carriers Management Information System (MCMIS) in making each determination. Integrating this information would improve the assessment of motor carriers, and has long been a recommendation of the National Transportation Safety Board (NTSB). Under this proposal, unfit determination could be based on a carrier’s on-road safety data alone, according to a summary prepared by the Transportation Intermediaries Association. The agency has invited comments on the proposed rule. For information, visit www.regulations.gov.

FMCSA proposes to eliminate

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FM: 2016 FORECAST continued Greg Sikes, vice president of products at Beaverton, Ore.-based DAT Solutions, which operates the DAT network of load boards and RateView rate analysis tool, says the ELD mandate will bring mobile

communication to a large number of trucks, enhancing performance for both drivers and fleets. Drivers will have access to engine diagnostics while fleet managers will be able to supervise trucks in real time and also be able to better schedule preventive maintenance. “They (drivers and fleet managers)

can be proactive instead of reactive,” Sikes says about the ELD mandate. The electronic logging will also serve to equalize the technology advantage that larger fleets have had over smaller competitors, adds Ken Harper, DAT marketing director. The benefits of the ELD cited by Harper are among the reasons

FLEETS FACE STRICTER STATE REQUIREMENTS Transportation companies cannot assume that the federal motor carrier safety regulation preempts state laws for driver rest periods and meal time requirements. The U.S. District Court of Appeals for the Ninth Circuit ruled in 2014 that California’s meal and rest break laws are not preempted by federal law. The federal motor carrier safety regulations generally require states to adopt regulations pertaining to commercial motor vehicle safety in interstate commerce that are compatible with federal requirements, says Megan Bush, manager of safety policy at the American Trucking Associations (ATA). Bush also says states can impose more stringent requirements if the regulations do not create an undue burden on interstate commerce, provide safety benefits, and are otherwise compatible with federal safety requirements. She says this can create concerns for carriers since a

INTRASTATE TRANSPORTATION

COMPLIANCE

commercial vehicle can be subject to different requirements when it crosses a state line. California rest break rules fall under the state’s employment law, not motor carrier highway safety law, adds Rich Pianka, ATA acting general counsel. California workers get a half hour break at the end of the fifth hour of work and a 10-minute break for every four hours worked. Tom Bray, a subject matter expert at Neenah, Wis.-based J.J. Keller & AssociEXAMPLE: ates, a source for safety and compliance 30-MINUTE BREAK solutions, says state break requirements AFTER 5 HOURS – are constantly evolving and there have CALIFORNIA STATE LAW been conflicting court decisions. “It’s kind of a mess at the moment,” Bray says in regard to driver break rules.

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that some of the largest trucking associations – such as the American Trucking Associations and the Truckload Carriers Association – have supported it. Mark Mullins, transportation manager at Ben E. Keith Foods Co. in Fort Worth, Texas, told a session during the International Foodservice Distribution Association (IFDA) Solutions Conference in Phoenix, Ariz., that ELDs have proven to be a useful driving education tool. Mullins believes there is a widespread misconception that drivers in general are familiar with government transportation laws. Mike Hummel, a driver and trainer at Martin Brothers Co., a Cedar Falls, Iowa-based distributor, said ELDs are easier than paper logs for drivers to use. He said drivers realize that the electronic log creates a reliable record of how they are spending their time. DAT’s Harper, however, acknowledges why the Owner-Operator Independent Drivers Association (OOIDA) has sued to halt the mandate’s enforcement. Drivers will run

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into trouble if they run out of hours before finishing a route. They will need to plan work schedules more carefully. This can become especially problematic if a driver misses a delivery and has to wait for a warehouse dock to open up. “You may have to wait 24 hours for a dock appointment,” says Mark Montague, a DAT industry rate analyst.

ELD has detractors One carrier that implemented ELDs found an 8 percent decline in productivity in their first year, Sikes says. Some of this was due to the dispatchers not being used to the new procedures while some was due to poor planning by drivers. “This rule has the potential to have the single largest, most negative impact on the industry than anything else done by FMCSA,” says Jim Johnston, OOIDA president and CEO. “We intend to fight it with everything we have available.” East Coast Warehouse & Distribution, an asset-based 3PL

in Elizabeth, N.J., that specializes in port deliveries, says the mandate will bring a cost to the supply chain and could impact productivity, which is the company’s most important goal. “It is a concern to all of us with a reduction in productivity,” says Jamie Overley, CEO. Some observers say the mandate’s problem is not the technology, which in itself can offer some benefits, but the HOS rules that it is intended to enforce. “The tightening of the hours-ofservice limits due to the creation of the 30-minute break requirement and the restrictions on the 34-hour restart, which may be returning, has reduced driver productivity,” says Tom Bray, a subject marketing expert at Neenah, Wis.-based J.J. Keller & Associates, a source for safety and compliance solutions. “Any more changes in this area are also likely to impact productivity.” However, the electronic logging system will only affect productivity negatively if the carrier is allowing drivers to submit false logs to be able

Cost is such “ a tremendous driver in our business.

If we can eliminate overtime, that is a plus.” John Kilpatrick, East Coast regional operations manager, Dawn Foods

JANUARY/FEBRUARY 2016 | FOOD LOGISTICS

Fleets invest to meet the mandate

FM: 2016 FORECAST continued

• A. Duie Pyle has found PeopleNet electronic logging devices have reduced accidents.

to exceed the hours-of-service limits, Bray says. In addition to HOS, there are also state requirements that fleets need to observe. Marc Rogers, president and CEO at Interstate Distributor Co. in Tacoma, Wash., sent customers a letter late last year advising them that a recent court ruling held that federal law does not preempt state laws, which in California are more restrictive (See sidebar on page 24.) Rogers wrote that there will be a loss of productivity on account of drivers having to pull over at times prescribed by the law in order to comply. He estimated drivers will spend up to 15 percent or more of their productive time complying with these rules.

Fleets that have already deployed onboard computers will have less of a problem complying with ELD. In many cases, the fleets invested in onboard computers to improve their oversight of drivers in real time. Such was the case for Sherwood Foods, a Detroit, Mich.-based foodservice distributor that serves 15 states with 280 vehicles. For Jim Gell, executive vice president of operations, the number one concern has always been customer service, and the mobile communication has been an important tool. The Geotab telematics-based solution makes it easier for drivers to immediately improve their driving behavior. The audible alerts notify drivers of unsafe or potentially risky driving events. “In addition, we are able to monitor our service locations and deliveries in real time,” Gell says. Dawn Foods, a Portage, Wis.-

based foodservice distributor, welcomes any technology that enforces HOS, says John Kilpatrick, East Coast regional operations manager. The company is deploying the Greenmile cloud-based route management system to automatically update information regarding estimated arrival and departure times at customer locations for web-accessible track-and-trace capability. This has been a useful planning tool. “We have a pretty reliable idea what time we’re going to be at the customer,” Kilpatrick says. “Cost is such a tremendous driver in our business. If we can eliminate overtime, that is a plus.” Driver safety is of equal concern to Kilpatrick. “We’re able to track the speed of the vehicle on the road and we can go back to the driver and see what was the issue, why they were driving fast on the road.” A.Duie Pyle Inc., the West Chester, Pa.-based LTL carrier, views ELDs as part of the company’s safety arsenal, which pays off in fewer accidents and injuries. Half of the fleet now has forward-looking, collison-control software, is testing in-cab cameras, and has a mandatory driver safety vest requirement, says Randy Swart, chief operating officer. This past year has been the safest year for the fleet ever in terms of accidents and injuries. “It’s just making them safety conscious,” Swart says. ELDs are an important tool for Reading, Pa.-based Penske Logistics to supervise drivers, says Tom Scollard, vice president of dedicated

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contract carriage. “We can manage our work force properly,” he says. “The drivers appreciate the ease of electronic logs versus filling out the paper work. They don’t have to worry about being up to date. The computer is taking care of that for them.” Penske Logistics has also equipped its vehicles with cameras that alert the driver if the truck moves out of its lane. Ryder System Inc., based in Miami, Fla., already has a proprietary RydeSmart GPS system for its rental vehicles and a similar system for its logistics fleet. The system tracks fuel efficiency and allows the fleet manager to schedule preventive maintenance effectively. Ben Cubitt, senior vice president, consulting and engineering for Transplace, a non-asset-based 3PL in Dallas, Texas, that manages 2,800 carriers, observes that regulatory concerns have surpassed fleet optimization as the leading carrier concern.

Technology to play a bigger role Technology will also play a bigger role in future delivery contracts, observes DAT’s Montague. Shippers, brokers and carriers, including smaller carriers, will have continuously updated lane-by-lane benchmarks available. The increasing technology options and costs in and of itself has consumed many fleet managers’ minds. Kevin West, vice president of transportation at Shippers Express Truck Lines, Inc., a Dallas, Texas-based 3PL, says his company recently underwent a lengthy analysis before deciding to switch to a new TMS because they wanted a better load optimization tool for consolidating shippers.

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“Technology is top of mind,” West says. “It’s one of the biggest things I’m spending my time on.”

Fleet capacity remains a concern One question all parties pay close attention to is fleet capacity, as it

impacts carrier rates. This is difficult to predict since there are various factors, such as weather, that change unexpectedly. The biggest impact on costs, most agree, is the driver shortage, which is expected to get worse as baby boomers retire.

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FM: 2016 FORECAST continued

The biggest impact on costs,

most agree, is the driver shortage, which is expected to get worse as baby boomers retire.

The driver shortage will continue to squeeze capacity, depending on the success of industry measures to counteract this trend. An improving economy in 2016, delivering more orders, could also hammer carrier capacity. “It looks like the balance of pricing power could shift back again to the carrier side,” says DAT Solutions’ Sikes. “Private fleets face tremendous uncertainty as it relates to regulation and the subsequent costs that arise from it,” says Tom Nightingale, vice president of transportation logistics at GENCO, a FedEx company and a Pittsburgh, Pa.-based 3PL. As EOBRs and drug testing pile up on top of the already tenuous HOS rules, those operating fleets are faced with an extremely complex operating environment. Secondly, most fleets will build

their networks to “the valley” and not to “the peak,” Nightingale says. When the surge season hits a fleet, they must go to the common carrier marketplace. “And, that marketplace is headed for tremendously tight capacity toward the end of 2016, continuing a trend we’ve seen in recent years. The capacity situation will likely become as dire as we experienced during the polar vortex in 2014, meaning costs will be impossible to predict and quite shocking compared to the costs of running your own fleet.” The potential capacity shortage has caused some shippers to consider private and/or dedicated fleets to guarantee capacity and help control cost increases, Transplace’s Cubitt notes. But this is certainly not a new issue for shippers.

Sanitation requirements weigh in

Not every fleet struggles with the same issues. Henry’s Foods Inc., a broadline foodservice distributor based in Alexandria, Minn., serving the the Dakotas, Minnesota and parts of Iowa, has no problem with driver retention for its 42 tractor trailers, notes Jim Whipkey, transportation manager. The company has been in compliance with the ELD mandate for several years. Whipkey’s big concern is temperature monitoring requirements under FSMA. Based on solutions he is familiar with, the monitoring will cost between $400 and $800 per truck. But the biggest concern is not the cost; it’s the hurdles the mandate will bring and how to correctly handle them. “That’s the biggest hurdle Find out more at we’re going to have to get over,” he says. bit.ly/FoodCommerce Based on the FSMA sanitary transport proposal, all members in the supply chain would be required to use Unified Commerce Platform vehicles that are designed

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DRIVER QUALIFICATION RULES GET STRICTER The U.S. Department of Transportation (DOT) has mandated physical exams for drivers be done only by trained and registered medical examiners. To meet DOT compliance, employers need to have a certificate of violations, updated medical exam reports, drug and alcohol testing and a driver qualification file. The driver can only use registered medical examiners. There are also plans for a drug and alcohol clearinghouse. “Taken individually, these new qualification requirements will not lead to a significant loss of drivers, but cumulatively they could lead to a fleet either losing several drivers or being unable to hire and qualify some driver applicants,” says Tom Bray, a subject matter expert at J.J. Keller. As driver qualification requirements have increased, services have been developed to assist fleets with qualifying drivers. First Advantage, an Indianapolis, Ind.based fleet management consultancy, has developed a driver screening process designed to make hiring a driver easier for both the applicant and the employer. First Advantage uses electronic processing to make the experience faster and easier, notes Mark Carlson, senior director of fleet sales. It is possible to get drivers’ records delivered via the Internet through web-based screening platforms, saving the company time. Fleets are Fleets are utilizing background screenutilizing ing partnerships and background systems to streamline screening screening required partnerships for DOT-regulated drivers. By utilizing and systems a web-enabled to streamline DOT employment screening application, First Adrequired vantage clients can systematically start for DOTthe screening process regulated and maintain visibility drivers. to the status of candidate test results. The faster a company can expedite the screening process, the more likely they will have a high quality employee. All drivers operating trucks over 10,000 pounds are regulated by the DOT, and drivers operating vehicles over 26,000 pounds are subject to additional DOT drug and alcohol testing requirements.

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FLEETS FIND WAYS TO ALLEVIATE THE DRIVER SHORTAGE Fleet managers agree the driver shortage is now going into its third year, with no end in sight. While everyone hopes for a better economy, fleet managers realize that more business activity will add to the demand for drivers. Penske Logistics is training drivers to be customer service oriented, says Tom Scollard, vice president of dedicated contract carriage. This involves training in face-to-face communications, which includes patience. Drivers are also expected to load and unload at customer locations if needed. “Predictable work is important to a driver because it determines what his income is,” says Jeff Stoicheff, Penske pays bonuses to senior vice president of human resources. employees for referrals, Penske pays bonuses to employees for referrals, which account for 12 percent of its drivers. They get $500 which account for for the first referral and can earn as much as $1,500. There are also non-cash bonuses like helmets signed by 12 PERCENT OF Penske race car drivers. ITS DRIVERS. Penske seeks the following driver traits: 1) skilled driver, 2) physically able to use roll-off carts and pallet jacks; 3) customer facing skills. The company tries to find out how a potential driver will deal with different situations, such as someone parking in a loading area or someone asking them to return freight. The company regularly evaluates its training and its pay. They are currently exploring an enhanced employee recognition program. For the driver shortage to abate, Stoicheff says pay must improve and the position must be seen as a better job opportunity. “The driver occupation has to be seen as a desirable occupation for blue collar employees,” he says. A.Duie Pyle Inc., makes a practice of moving dock operators to the driver role through their truck driving academy, says Randy Swart, chief operating officer. The company is also exploring using smaller trucks (under 2,600 pounds) for local deliveries that don’t require commercial driver licenses. The smaller trucks would be used as a training ground for holding a commercial driver license. East Coast Warehouse, the Elizabeth, N.J.-based 3PL that specializes in port deliveries, focuses on setting schedules to allow drivers to be home by the end of the day, says Ed Cole, vice president of the company’s Safeway Logistics division.

and maintained to transport food safely and to take steps to ensure that food is not contaminated during transport, says Bray of J.J. Keller & Associates. These rules include adequate temperature control, (i.e., segregated from non-food items that could lead to contamination); sharing information (prior cargoes, clean outs, and temperature control data); training personnel on safe and sanitary transportation practices; and maintaining records of policies and procedures, equipment cleaning, prior cargoes, and temperature control. “We believe in the long run, all these (food safety) regulations will be fully enacted,” says John Deris, senior vice president of national sales Ryder System Inc. Ryder has been working with some of its customers on continuous temperature monitoring. The company is looking at different solutions. While the rule has not been finalized, Swart of A.Duie Pyle says some of these requirements are already included in food transportation contracts. Penske, for its part, is experimenting with telematics devices in its refrigerated trailers to record temperatures, Scollard says.

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Equipment costs rise

“Finding a good, consistent supplier to fulfill our needs is my biggest Transplace’s Cubitt also observes concern right now,” he says. “They that a lot of fleets are investing in (the national repair shops) are only newer vehicles, some of which get as good as the local shop.” better mileage thanks to fuel-saving technologies like aerodynamics. However, he also notes that the cost of investing in equipment keeps rising, as do maintenance costs. “Buying equipment used to be a simpler task than it is today,” he says. Brian Tabel, executive director of marketing at Isuzu Commercial Truck of America Inc., based in Anaheim, Calif., agrees there will be an increase in new vehicle purchases in the near term as fleets retire older models. He says many companies held off on purchases during the recent recession. In addition, vehicles have been built to last longer. “Trucks are older today SERVICES INCLUDE: than they ever have been,” • POOL DISTRIBUTION he says. • INBOUND / OUTBOUND SERVICES Maintenance and repair • OPERATIONAL SUPPORT costs are the top concern for John Friel, distribution CONTACT US: director at Atlanta, Ga.www.americanlumperservices.com based Republic National 866-786-8899 | info@americanlumper.com Distributing Co. (RNDC).

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SECTOR REPORTS WAREHOUSE

BY ELLIOT MARAS

HOW DATA METRICS

REVOLUTIONIZES LIFT TRUCK MANAGEMENT Improved management driven by telemetry enables fleet right sizing.

s warehouse technology improves, managers are finding new ways to boost productivity. One aspect of warehouse operations that has witnessed major innovation in recent years is lift truck management, propelled by lift truck telematics and wireless networks. Real-time and near-real-time data is unleashing a variety of management reports for all aspects of managing the warehouse, of which lift trucks are one. The technologies that are expected to have the greatest competitive impact on material handling according to the Material Handling Institute’s 2015 Annual Industry Report are all applicable to lift trucks. The four material handling technologies expected to deliver the greatest competitive impact are: 1) optimization tools, 2) sensors and automatic identification, 3) robotics and automation, and 4) predictive analytics. The 2015 Business Trends Survey of the Washington, D.C.-based Industrial Truck Association (ITA) found that 70 percent of lift truck manufacturers believe fleet sizes will decline. Asked to name the leading of lift truck factors contributing manufacturers believe fleet sizes to this decline, the will decline first factor named was improved truck productivity. Lift trucks represent one of the biggest capital outlays for food and beverage (f&b) warehous-

70%

•

es. And as technology brings new efficiencies to lift trucks, it also adds cost. Hence, warehouse managers have to weigh the benefits of improved productivity against the higher investment. In the case of lift truck fleets, improved productivity can reduce the number of lift trucks required and the amount of attendant labor. Southern Wine and Spirits, a Miami, Fla.-based distributor with 37 warehouses, has deployed lift truck management software to 350 units (35 percent of its fleet) after conducting a six-month test on 50 units at its Illinois warehouse. The company deployed Raymond Corp.’s iWAREHOUSE GATEWAY to 200 units and the Crown Equipment Infolink to 150 units, says Mark Booth, vice president of distribution and technology for the beverage distributor. The company focused on its largest warehouses, where they believe the software will bring the most benefit. Both the Raymond and Crown software solutions are manufacturer agnostic, meaning the distributor has been able to deploy the software to any OEM’s equipment. The company has 400 lift trucks along with reach trucks, turret trucks and order pickers. OEMs include Raymond, Crown, Toyota, Yale and Landoll Corp. “We had no visibility to a huge pool of assets,” Booth says. For the test, the company retrofitted 50 units with the iWAREHOUSE GATEWAY solution, including 24 lift trucks, 26 order pickers and six

reach trucks. “It (the test) was very eye opening,” Booth says. The most significant result was a reduction in impacts. “Damage costs money. Now every impact is recorded, and the trend is downward,” Booth says. Another benefit is that OSHA compliance is more thorough since each driver has a checklist on the dashboard. An important long-term benefit will be asset utilization. Booth anticipates being able to adjust the number of trucks based on the level of use. “The equipment costs money whether it’s being used or not,” he says. The company plans to integrate the fleet management software with its Manhattan Associates 2010 1-Series WMS, Booth says. United States Cold Storage, the Voorhees, N.J.-based provider of temperature-controlled warehousing and transportation, deployed an automated inventory tracking system in its Bethlehem, Pa., warehouse three years ago to save its lift truck operators from having to scan pallet bar codes. The company was using RF scanners to track hourly averages for cases picked, bulk partial picks, full pallet picks, putaway pallets and replenishment replacement, says Tim Herm, general manager. The software for the automated inventory tracking system worked fine, Herm says, but there were issues with some of the hardware they were using, such as the camera and sensors mounted on the lift truck. The company opted to focus on other areas.

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Making trucks smart Total Trax Inc., a lift truck fleet management software provider, focuses on transforming lift trucks into “smart” trucks. A graphical interface mounted on the truck can display the current location, orientation and speed of lift trucks, load identity and status, task type (i.e., putaway), and elapsed task time. The system can track daily average time per move, outstanding and completed putaways and retrievals, average moves per operator per hour, and labor utilization per hour. One management report lists operators by name, number of loads, driving time and exceptions, and allowed managers to see trucks moving throughout the warehouse in real-time or to “rewind” and see specific events in the past. It also provides managers the ability to use “breadcrumbs” a.k.a. “spaghetti diagrams” to see which areas of the warehouse are most heavily trafficked.

Swisslog offers an aftermarket lift truck management solution that interfaces with WMS systems and with ERPs. The SmartLift provides indoor GPS and key performance indicators (KPIs), the most important being the amount of time the truck is moving versus stationary and the amount of time the truck is loaded, says TJ Fanning, director of customer support, sales and

account management for the Buchs, Switzerland-based material handling equipment manufacturer. The SmartLift solution, if deployed to the entire lift truck fleet, can eliminate the need for bar codes in a warehouse loading and unloading operation, Fanning says. “The next extension on a WMS platform is to go labelless,” he says. The benefits of such metrics are

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focused on performance, safety and maintenance. This can make it easier to not only measure productivity but to make improvements based on real-time data. East Coast Warehouse & Distribution, a provider of temperature-controlled logistics on the Port of New York/New Jersey, has been testing a labor management system (LMS) provided by its lift truck supplier in its warehouse. The LMS will provide real-time feedback on the forklift operator’s specific activity, time in motion and at rest, as well as other KPIs. In similar operations, the provider has seen significant productivity gains through imple• SmartLift top-of-mind for most lift truck mentation. from Swisslog manufacturers since the efficiencies Lift truck manufacturers interprovides can allow customers to reduce viewed for this article did not wish location, load their fleets. to provide benchmark metrics status, task type Wireless communication techsince customer needs vary. Most and instructions. nology can control equipment usage manufacturers said each customer through an authorized PIN code needs to develop their own benchor other identifier, which allows marks based on warehouse layout, the data to serve as the basis for case and pallet weight, aisle length, continuous improvement programs distance traveled, lift truck features (such as lift height), etc. “Forklifts equipped with fleet and operator management systems provide information for warehouse managers to BENEFITS review truck activity by operator, analyze productivity across facilities, n Inch-accurate FOOD SERVICE vehicle and departments and shifts, inventory tracking ESSENTIALS and make sure the right equipment is being used INGREDIENT for the task,” says Jim n Hands-free / voice-free barcode BINS Gaskell, director of global scanning technology business development at Crown Equipment Corp.. n Bread crumb visualization of Through operator logforklift fleet movement ins, productivity metrics — including average travel ORDER BY 6 PM FOR time, average lift time, n SAME DAY and SHIPPING Live reporting business SCOOPS actual travel times, actual intelligence tools lift times, time stopped and time stopped with no operator — can measure n Easy to integrate into existing and benchmark individubuildings and forklifts COMPLETE CATALOG als and groups. Additional information tracked, such 1-800-295-5510 SERVICE CARTS uline.com as number of impacts n Turn-by-turn forklift navigation and truck maintenance

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reports, makes it possible for warehouse managers to make informed decisions across all facilities, departments and shifts. For customers that are just getting into analytics, Gaskell sees the greatest interest in impact reports (which correlate directly with safety) and forklift operator productivity reports. “Information gathered by the forklift, including equipment status (logged on, logged off or in service), hours by operator based on status (idle, hydraulic and travel), battery/ fuel status, fuel consumption and impact events, helps managers to gain a fleet-level view of operations that can be used to reduce damage and truck wear,” he says. A warehouse manager can determine specific benchmarks for a lift truck that unloads pallets from a trailer and takes them to a narrow aisle for putaway, says Ed Campbell, sales manager at the forklift division at Marysville, Kan.-based Landoll Corp. Benchmarks often include the number of unit loads per hour.

Telematics bring major change Telematics have generated a new level of management insight for fleet managers, says John Rosenberger, manager of iWAREHOUSE GATEWAY and global telematics at Raymond Corp., the Greene, N.Y.based material handling solutions provider. One of a fleet manager’s goals is to know how productive each lift truck is; how much is it being used versus unused. A key measure is the number of times a truck moves without carrying any product. A warehouse manager wants to reduce the number of times a truck is not carrying product. The travel-to-lift ratio is important, Rosenberger says. Within some warehousing applications, the fleet manager wants these two amounts to be as close to each other as possible. Within these applications, if the travel time number vastly exceeds the lift number, the equipment is not being well utilized. “More expensive reach or order picker lift trucks are being used as a glorified pallet trucks

Low investment through

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for the basic horizontal transport within some warehouses,” he says. Productivity reports can help determine if a warehouse has the right number of lift trucks. In warehouses where the work load varies a lot, this can be hard to identify. With good data, a manager will know if the trucks are working to capacity or if there is “dead time.” If there are only two months out of the year that all the lift trucks are working at full capacity, it might make sense to eliminate some trucks and rent extra trucks for the two busy months, Rosenberger says. Some managers worry that drivers can be intimidated by the graphic interfaces that track their activity. Rosenberger says it is important to recognize these concerns, but managers should use the tracking tools as an incentive to be more efficient. One strategy to address driver concerns is to position the use of telematics as a “self-funding bonus program,” he says. “The more efficient a warehouse becomes, the higher the percentage of money available to pay out performance incentives.” “In the future, fleet managers will be The lift truck able to collectively analyze and leverage management operator and equipment and maintenance software can data together in order to more accurately track both predict what parts will need to be replaced on a truck, and when,” says Jewel Brown, the truck national manager, fleet manager/telematics and labor at Columbus, Ind.-based Toyota Material activity. Handling. “For example, one driver may routinely wear out tires faster than another, maybe due to dock plates, terrain (outdoor), or even behavior. Data collected in our fleet management system, for that specific operation, may prompt tire replacements earlier than the average expected replacement time.” “A telemetry system offers the ability to evaluate utilization and maintenance information alongside expected demand and specific truck applications, so fleet managers can make quick and informed decisions about fleet size and composition,” says Steven LaFevers, director of aftermarket solutions at Greenville, N.C.-based Yale Materials Handling Corp. “This allows them to continuously improve operations and maintain a right-sized fleet composed of equipment tailored to meet their specific operational challenges and eliminate the cost of running excess trucks.” Telemetry-based data can also help refine preventive maintenance schedules to ensure sufficient support while avoiding overspending. In-dash displays provide drivers with self-management capabilities through speed and impact information to incentivize proper operator behavior, Lafevers says. These displays can facilitate direct communication between drivers and management to keep supervisors connected with activity on the floor. Metrics are important for improving productivity, but they don’t always enhance safety, notes Bruce Buscher, vice president of sales at Daifuku, the Tokyo-based material handling solutions provider. A lift truck operator who knows he’s behind schedule might drive too fast in order to make up for lost time, compromising safety. To gain fully benefits of lift truck management software, managers must educate drivers on all performance goals, including safety. For an extended version of this article, visit foodlogistics.com/ 12164137

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SECTOR REPORTS TRANSPORTATION

FREIGHTWATCH INTERNATIONAL

ELECTRONIC FREIGHT SECURITY (EFS) — WHAT TO EXPECT BY

A primer for the setup and implementation of an EFS program.

Editor’s Note: This article was prepared by FreightWatch International, the logistics security division of Sensitech Inc.

s cargo criminals become more sophisticated and daring, global manufacturers, logistics companies, and supply chain stakeholders continually look for ways to securely protect their supply chains and cargo. For many, Electronic Freight Security (EFS) programs are the answer, as they provide real-time, end-to-end monitoring of cargo shipments through embedded tracking technology. This document will inform stakeholders of the evolving risks of cargo theft, the benefits of an EFS program, and what such a program encompasses.

Why implement an EFS program? Cargo theft is on the rise. Since 2008, FreightWatch International Supply Chain Intelligence Center (SCIC) has documented increases in both the volume and the value of cargo theft yearover-year with no known slowdown on the horizon. New threats require new actions. As cargo criminals become more sophisticated, new kinds of threats arise. For instance, fictitious pickups (FPUs) are on the rise. In these events, cargo thieves arm drivers with fake IDs or devise fictitious businesses to pick up cargo as a way to divert and steal goods. These criminals know how to navigate load boards and effectively target high-value loads. GPS jamming, which is used by thieves to interfere with telematics systems and tracking devices, is on the rise in high-risk areas such as Brazil, South Africa and Mexico. Jamming devices are illegal to operate, sell, or market in the United States, yet the

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technology is still available. While jamming technology could affect the performance of telematics systems and some tracking devices used in EFS programs, there are countermeasures available that dramatically reduce the impact of a jammer. Effective EFS programs use a combination of technology countermeasures and operational procedures to mitigate the risk of effective jamming events. High-risk products. Any commodity that has value on the black or grey market is a target today. Within sophisticated, organized-crime networks, these highly targeted products can easily be resold locally, regionally and internationally. Dangerous routes and hot spots. Companies that ship through known “hot spots” or via dangerous routes are more prone to cargo theft. If these high-risk areas cannot be avoided, companies should employ the best security option that will not only protect cargo, but also assist in the rapid recovery of stolen shipments. Insurance compliance. Depending on the nature of the cargo, some insurance policies require that EFS practices be utilized on high-value products to better protect cargo. The high cost of stolen products. For an industry like food, there are many costs associated with the theft of product, such as replacement costs, higher security, and public relations efforts to control a damaged brand. These are just a few of the reasons that manufacturers are increasingly turning to EFS programs to secure their cargo. EFS programs are consid-

ered to be not only industry best practice, but they are now also common practice among companies that want to drive a competitive advantage, reduce risk, and increase visibility and security within their supply chains.

Considering an EFS program? Use this self-assessment questionnaire to determine if your company is at risk and could benefit from an EFS program:

If you… • Ship cargo that is desirable to cargo thieves. • Ship cargo that is valued at more than $100,000. • Have highly publicized new product introductions where cargo theft would be detrimental to your public image. • Ship to destinations that are high risk, or via routes that are in highrisk areas. • Ship cargo on Fridays or holidays and stage it before delivering. • Ship internationally from your site. • Broker loads to third parties. • Maintain a “just-in-time” supply chain that cannot handle disruption. • Have suffered from a cargo theft in the past and are concerned it will happen again.

And if you don’t... • Have a large, experienced security team dedicated 24 hours per day, seven days per week to logistics security. • Use team drivers for high-value loads. • Have direct law enforcement relationships to assist with cargo security incidents. • Conduct frequent background checks for regular, seasonal, and temporary workers. www.foodlogistics.com

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SR: TRANSPORTATION continued

• Implement cargo security protocols and write them into carrier contracts and service-level agreements. Then you may want to consider an EFS program.

How EFS works EFS technology is an integral part of global security programs aimed at maintaining supply chain integrity from one end of the chain to the other. This technology ensures that shippers, carriers, drivers, and distribution teams secure valuable goods using the latest in security best practices. While these EFS programs are comprehensive, they specifically focus on the highest risk areas of transportation, where the majority of full trailer load cargo theft occurs. The best-in-class programs provide covert cargo security that combines EFS technology, which is delivered through embedded

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devices in the cargo, with sophisticated real-time monitoring services. Real-time location, status, and condition data are transmitted via Internet-of-Things (IoT) and assisted-GPS devices, and enable critical activity alerts that protect the supply chain and mitigate the risk of cargo theft. These programs not only enable cargo monitoring, but also provide tracking, reporting, and recovery of high-value shipments in transit between manufacturing warehouses and delivery sites. All of this is delivered with the highest attention to security compliance and the management of pre-defined security protocols. The most effective EFS solutions use technology that works in impaired environments where other GPS devices cannot. For instance, aluminum containers and cargo holds are some of the most challenging environments for regular GPS devices, but not for sophisticated EFS solutions.

Who’s on an EFS security team? A key part of any EFS solution is the team behind the solution. Cargo security experts employed by logistics security companies work with product and shipping experts on the customer side to ensure the most robust, secure program. Here are a few of the roles involved in an EFS program and the associated responsibilities: Implementation. The initial stage of an EFS program involves the building of security best practices based on the type of cargo shipped and typical routes used. The logistics personnel at the security company capture all relevant data, apply best practices, and input key information into a web-based solution. They also develop pre-determined geo-routes designed to utilize low-risk lanes. Escalation protocols are developed to ensure maximum compliance and security of the driver and cargo.

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Security professionals scrutinize tactics, techniques, and procedures used by cargo thieves and make appropriate adjustments. For instance, risk management officers ensure that processes are in place to communicate security protocols to shipment operators, as well as to capture critical shipment information prior to departure. On the customer side, logistics personnel ensure that before a load leaves the dock, a tracking device is covertly embedded per security protocols. The device is then activated by the security company for monitoring from the point it leaves the dock to when it arrives at its desired destination. Training. Compliance with security protocols is critical, as immediate response and resolution to noncompliant incidents reduces opportunities for theft. Once the initial parameters of the program have been established, the logistics company will set up customer training. Typically, logistics, supply chain, security personnel, www.foodlogistics.com

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the perfect fit

and third-party suppliers attend the training. Monitoring and tracking. FreightWatch International Command & Control Center (C3) representatives provide point-to-point cargo monitoring according to pre-defined security, escalation, and communication procedures. These experts will initiate steps for the resolution of issues encountered with shipments requiring constant surveillance, such as a deviation from a pre-determined route, unauthorized stops, or failure to comply with transport and delivery protocols. Program oversight. Typically, there are program managers who provide operational and compliance metrics, such as motor carrier behavioral patterns related to risk, and weekly performance evaluation of shipments in transit. Program managers receive cargo theft intelligence and work with a company’s logistics team to assess data and maintain protocol expectations.

Emergency response. In the event of a suspected security breach, or theft incident, an EFS solution provides immediate escalation processes. If there is a violation of pre-defined security protocols, emergency response teams can immediately contact the driver to assess the situation. If escalation is required, these teams will engage with law enforcement to recover the stolen shipment. Logistics security companies have law enforcement liaisons on staff who are industry experts in cargo crime, transportation, and logistics security. Ongoing reporting. Many logistics security companies also have analysts who generate statistically rich reports, and provide insights for proactive cargo security and information for continuous improvement. These reports also help to optimize motor carrier ROI and ensure that carriers are adhering to shipping best-practice standards. JANUARY/FEBRUARY 2016

EFS IN ACTION: SEAFOOD RECOVERY Using tracking technology embedded in a load of seafood routed from Massachusetts to California, FreightWatch helped track the cargo after it was stolen in Jackson, Miss. Once Miami was identified as the location of the cargo, a FreightWatch risk management officer located the shipment in-route and kept the authorities up to date. Within two hours, the criminal was apprehended and the shipment recovered—and using data from the tracking device, an accomplice was identified. FreightWatch continued to monitor the shipment after it was impounded via temperature sensors to ensure that the product kept its integrity until it reached its final destination.

| FOOD LOGISTICS

2/11/16 10:10 AM

SECTOR REPORTS SOFTWARE & TECHNOLOGY

BY ELLIOT MARAS

WAREHOUSE SOFTWARE:

INNOVATION TRACKS CHANGING MARKET DEMANDS A

As single-order fulfillment explodes and new regulations arrive, users must scrutinize provider capabilities.

• H-E-B supermarkets use Fortna WCS software to manage Automotion pick-tobelt conveyors in a DC.

s the food and beverage (f&b) supply chain tasks itself with managing inventory with greater speed and accuracy for a host of reasons, warehouse managers need to use the management software that best suits their needs. Market changes such as growing safety concerns, an SKU explosion, expanding regulations and the rise of e-commerce all make the warehouse more critical to f&b supply chain performance. The right software enables a company to deploy structural changes in the warehouse operation as the business grows or if it wants to change its strategy. Such changes can include introducing warehouse automation, adding new services (such as refrigerated inventory handling) or consolidating facilities. Warehouse management software includes warehouse management systems (WMS), warehouse control systems (WCS) and warehouse execution systems (WES).

A comprehensive view makes sense

A recent review of current warehouse software features and how users are determining which systems best fit their needs indicates there is significant innovation taking place to meet an increasingly diverse set of user needs. Omni-channel fulfillment, driven by e-commerce, is one of the latest and most challenging demands, even though it is expanding slower in the f&b industry than other industries. Omni-channel fulfillment requires a more robust warehouse since it brings a greater need for single-order fulfillment. The omni-channel also strengthens the case for automated material handling equipment, which creates yet another set of software needs.

Safety regulations weigh heavily For the f&b industry, a more pressing need is for greater visibility of inventory throughout the supply chain on account of food safety regulations, which are hardly keeping pace with public concerns about product contamination and recalls. WMS is imperative in order to provide this visibility and to reduce

delivery time in response to a more demanding customer. Hunt Brothers Pizza, a Nashville, Tenn.-based wholesale pizza distributor to 7,300 accounts in 30 states, deployed its first WMS system two years ago in one of its three master distributor DCs. The system has saved thousands of dollars per month in reduced shrinkage costs in its largest DC, says Randy Dunn, vice president of operations. The DC has over 99.9 percent inventory accuracy, turning the warehouse up to seven times a month with an inventory of $1.5 million to $2 million. “With the WMS, we balance the books very quickly and effectively,” Dunn says. But more importantly, the WMS from Minneapolis, Minn.-based HighJump Software has provided inventory visibility that will enable the company to respond to recalls should they occur at any point in the its six-step distribution process from its suppliers to its convenience store customers. This would not have been possible using the previous manual inventory management system, Dunn says. With HighJump’s WMS, the company has deployed bar code scanners to provide real-time traceability of inventory. Hunt Brothers Pizza looked at 18

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different WMS vendors. The top concern was real-time inventory control. Because the company had a significant investment in its ERP system, management wanted a WMS that would integrate with the Great Plains ERP. Hunt Brothers selected High Jump’s AccellosOne WMS. Had the company not already deployed an ERP system, Dunn says they would have considered an ERP with a WMS subset. ERP vendors have added WMS modules along with other modules, which has expanded the WMS market. Dunn sees the single-software-vendor approach as having some advantages from a maintenance and ease-ofuse perspective, although he can’t say for certain that they would have chosen this option.

proved labor efficiency, Wogan says. Organically Grown initially expected a two- to three-year ROI on the WMS. But after tripling the size of the 40,000-square-foot warehouse shortly after deploying the WMS, they have added one more year to the ROI, Wogan says. The company still uses the ERP’s WMS module in its smaller warehouse. Dot Foods, the Mt. Vernon, Ill.based redistributor, deployed a tier 1 WMS from Scottsdale, Ariz.-based

JDA Software at its DCs over the course of five years after launching a test at its Modesto, Calif., facility. The redistributor manages a huge number of SKUs which it consolidates into LTL shipments from nine DCs, including a three-warehouse campus. Because of the large number of SKUs and wide product assortments in limited quantities, the company uses a semi-automated, hybrid picking system, says Troy Schenk, Dot

Distributor improves inventory accuracy Organically Grown Co., a Eugene, Ore.-based organic produce distributor serving the Northwest, deployed a dedicated WMS system when it wanted more inventory accuracy than its ERP system provided, says Paul Wogan, chief information officer. The company deployed the WMS from Phoenix, Ariz.-based AFS Technologies three years ago in the largest of its two DCs. The WMS integrates well with Organically Grown’s ERP, which handles order, inventory and financial management. Like Hunt Brothers Pizza, Organically Grown found that a tier 1 WMS offered the depth of features it needed. This would not have been possible using the ERP’s WMS module. “We found that the depth of the (ERP’s) WMS was not comparable,” Wogan says. The AFS WMS provides inventory visibility and more granular data. The AFS WMS offers single-scan traceability with GS1, GTIN and Produce Tracking Initiative (PTI) SKU tracking schemes in addition to supporting processes for receiving goods, put-away/flow-through, inventory management, order processing, replenishment, pick/pack, loading and shipping. The granular data has also imwww.foodlogistics.com

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SR: SOFTWARE & TECHNOLOGY continued

• JDA Software’s WMS dashboard presents status reports for shipping issues, staging lanes, doors and appointments.

Foods’ warehouse systems manager. A hybrid picking system requires units to be sent to the staging area as they are picked, as opposed to the wave system that is more common in food distribution. “It’s not ‘pallet-in and-out,’” Shenk says. A hybrid system usually requires a more automated picking process. Dot Foods’ hybrid (semi-automated) picking system uses Vocollect voice technology.

Transfers loads from one pallet type to another

Dot Foods uses this picking system for dry, refrigerated and frozen food. The WMS also directs receiving, put-away, replenishment, shipping and packing. Dot Foods realized they needed an WMS in order to grow, Schenk says. The system is customizable, which is also important. The company has a “home-grown” ERP. Tom Kozenski, vice president of solutions strategy at JDA, says waveless picking, which releases work in a steady stream, is a relatively new WMS concept. This will support the unpredictability of omni-channel fulfillment. An optimum waveless environment is one that is often highly-automated and has a large number of pick zones, he says. Kozenski sees food safety regulatory compliance as a bigger driver for automation in the food industry than e-commerce. Automated material handling equipment and system-directed moves will allow warehouses to process inventory faster and reduce the time it takes to get it to the customer. “We (WMS) are the system of record for where inventory lot codes are stored and shipped,” Kozenski says. “We’ve got a real-time view of everything going on in the facility.”

Automation brings choices

Category 3 safety compliant Enhance safety for warehouse personnel Helps meet FSMA, HACCP and GMP compliance Prevents contamination from entering production areas Safer, cleaner & faster than other load transfer devices 1-800-628-4065 www.loadtransfer.net

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Automation has been slow to expand in the food industry compared to other industries. This is expected to change as e-commerce expands. The need for more visibility driven by safety regulations could also strengthen the case for warehouse automation. Norman Leonhardt, business development manager at WITRON Integrated Logistics, an Arlington Heights, Ill.-based logistics solutions provider, says

automation is increasing in all types of warehouses as the cost of labor rises. In the food industry, automation is most prevalent in larger retail DCs. Big retail warehouses and manufacturing warehouses are also adding automation, he says, with foodservice distributors investing at a slower rate. As automation increases, warehouses will have more need for WCS and WES systems in addition to WMS. WCS manages the movement of material in near real-time, says Gene Billings, director of software products at Intelligrated, a Cincinnati, Ohio-based manufacturer of material handling solutions. A WES takes the WMS functionality and moves it to near real-time while orchestrating outbound order management in the most efficient manner, also in near real-time. Additional WES advantages include the removal of multi-vendor integration silos, harmonized metrics and business analytics, efficient automation management through optimization, real-time labor management and tracking, as well as real-time adaptability to changing facility conditions. H-E-B, the San Antonio, Texas-based supermarket serving Texas and Mexico, has found WCS critical to managing its heavily-automated DCs, notes Paul Linkins, one of the company’s IT support managers. There are automated storage and retrieval systems, conveyors, carousels, cranes, palletizers and pick-tolight systems in one of the company’s 25 DCs. There are a variety of vendors’ systems in use, including Daifuku, Automotion and Hytrol. H-E-B uses WCS from Fortna, the Reading, Pa.-based distribution systems provider, to manage conveyor controls, machine controls and server support. During the deployment, Fortna subcontracted a second WCS system from Vargo Material Handling, the Hilliard, Ohio-based hardware and software provider for the pick-to-light system. The WCS interfaces with the company’s WMS, Linkins says. The WMS sends picking and shipping

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information to the WCS. In H-E-B’s case, expansion into e-commerce is not driving warehouse automation. H-E-B’s e-commerce fulfillment is handled separately from the in-store fulfillment.

Waveless picking brings new options One of the most important emerging features of WES systems is they support waveless picking, says Art Eldred, client executive for systems engineering at Vargo Material Handling, the Hilliard, Ohio-based material handling manufacturer. He looks for waveless picking to expand as companies become more active in e-commerce. He refers to WES as the “automation control cop.” Faster order fulfillment was a factor in Atlanta, Ga.-based Dematic’s recent decision to acquire Reddwerks Corp., an Austin, Texas-based WES provider. “The only way to effectively achieve responsive order fulfillment is through an automated supply chain, powered by comprehensive real-time software,” says Ulf Henriksson, Dematic’s president and CEO. “Traditional batch processing cannot sufficiently respond to either the operational variability or the speed required.” “There is going to be a blurring of the lines between WMS, WCS and WES,” adds Pete Devenyi, vice president of software research and development at Dematic. Faster order fulfillment demands that retailers replenish inventory more frequently and with less inventory on hand, he adds.

WMS, WES and WCS: all 3 needed? As automation expands and WES evolves, there are situations in which an WMS becomes less important, says Tom Rentschler, vice president of marketing and business development at Forte, the Mason, Ohiobased systems integrator. WMS helps manage people, and as automation grows, there may be fewer people. “It really depends on the degree of automation,” Rentschler says. “You are less dependent on WMS if you have a lot of automation, but you

can’t say you don’t need WMS. You simply don’t need it as much.” Eric Lanphier, senior director of product management at Manhattan Associates, the Atlanta, Ga.-based software provider, says that an efficient order fulfillment operation requires a broad view of all warehouse activity. This is especially important in making the best use of labor, which is the highest cost factor. H-E-B’s Linkins does not see automation completely replacing manual functions in food warehouses. “There are a lot of items that are not conveyable,” he says.

ERPs offer WMS modules None of the user cases presented in this article opted for an ERP WMS module. But as Randy Dunn of Hunts Brothers Pizza notes, the integrated approach of an ERP-WMS can have some advantages, even though his company did not opt for this choice. ERP providers point out that the integration of their WMS modules spare users from potential integration issues. In response to this argument, dedicated WMS vendors note that integrating with ERPs has become a focus that they have already mastered. “ERP isn’t concerned with where the different boxes are and why they are where they are” in the warehouse, says Dan Waters, U.S. sales director at MADE4NET, a Hackensack, N.J.-based WMS provider. WMS, unlike ERP, focuses on inventory details, which in food are highly complex. This is not to say that the integration will always be a snap. “I’ve been involved with WMS implementation for over 19 years, and no matter how robust the WMS is, there are always systemic constraints resulting from the integration challenges

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and limitations with the clients’ host systems that present challenges for the WMS to work as per its design,” says Frank Camean, president and CEO of 4SIGHT, an integrator that assisted Dot Foods with its WMS implementation. Non-complex operations that are running a tier 1 ERP can most certainly leverage the ERP’s WMS module to run their warehouse, Camean says. Ron Myers, executive vice president at Linkfresh, a U.S./U.K.-based ERP provider, says that as product data increases, the ERP plays a more important role as the information holder of record. Software silos have to refer to the ERP for information such as packing specs and country of origin. And as information management becomes increasingly mobile, the data residing in the ERP system becomes a more powerful management tool, he adds. “There’s something for everybody out there in the market,” Myers says.

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ECONOMIC DEVELOPMENT

The Midwest region still has its share of challenges recovering from the recession, but opportunity and availability for development exists.

BY ERIC SACHARSKI

READY FOR A REBOUND

he Midwest region was one of the hardest hit in the economy’s downturn, and it’s also been one of the slowest to recover. The same challenges that plague the logistics industry nationwide – container shortages, lack of rail capacity and truck driver shortages – continue to hurt the Midwest too. But while the coasts, big cities and population centers have seen recovery over the years, the rural areas of the Midwest region haven’t been as lucky. But the landscape is about to change. There’s little doubt the Midwest region will become a battleground in upcoming years as ports and logistics providers along all three coasts compete for customers transporting goods to these inland destinations. Anticipating these opportunities, many areas of the Midwest region have prepared for the potential increase in container traffic, from all directions, with infrastructure upgrades to highways, inland ports and railroads. But challenges remain.

many would expect the ag industry to be leading the region’s route back to prosperity. But to hear Richard Murphy, president and CEO of Minneapolis-based Murphy Warehouse tell it, the recent logistical challenges of rail capacity and export container shortages between the coastal ports and the Midwest region continue to hold the upper Midwest back. “Oil traffic coming from the Dakotas has been playing havoc with rail in the Midwest, especially with the BNSF Railway lines totally jammed with oil trains,” says Murphy. “We may see some relief on the rails from that soon, given the low price

for crude right now. But Midwest farmers in recent years have literally struggled to find containers or something to store and move their crops to export because of the container imbalance due to all of the transloading being done at the ports now.” At one time the upper Midwest with its available space, cheap prices and good labor pools was an attractive incentive to build new warehouse and logistics operations, but with availability rates for land down in the single digits, the market has dried up due to higher interest rates from banks. With less rail and ocean container capacity, coupled with a lack of available land for development, you’d expect the trucking industry to reap the rewards of all of these logistical challenges in these rural spaces. “In the Midwest before the recession hit, there were some manufacturers in some of the rural areas that still couldn’t get trucks to go to those outlying plants,” adds Murphy. “Right now the economy is good and most companies can get reasonable truck access, but I can see a time when it happens again because you still have a shortage of people driving the trucks.”

• One of the new bridges in downtown Louisville, the Abraham Lincoln Memorial Bridge (on right), opened up just before Christmas allowing traffic to use the new route while the existing John F. Kennedy Memorial Bridge undergoes its $22 million renovation.

Upper Midwest struggles with capacity It’s no secret that the Midwest is the agricultural heartland of the country, so with record harvests these past few growing seasons,

• 42

FOR MORE INFORMATION: Anacostia Rail Holdings, anacostia.com | Bi-State Development, bistatedev.org | BNSF Railway, bnsf.com | CSX Transportation, csx.com | East-West Gateway Council of Governments, ewgateway.org | Murphy Warehouse, murphywarehouse.com | Regional Growth Partnership, rgp.org | Toledo-Lucas County Port Authority, toledoportauthority.org | U.S. Department of Transportation, fhwa.dot.gov FOOD LOGISTICS | JANUARY/FEBRUARY 2016

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Indiana improves connections to the Southeast CSX has been busy upgrading and improving rail connections in southern Indiana, announcing plans back in June to collaborate with Jeffersonville, Ind.-based Anacostia Rail Holdings to spend $90 million on upgrades to the 106-mile rail corridor between Indianapolis and Louisville, Ky. for the Louisville & Indiana Railroad (L&I). When the joint project was announced in June 2015, CSX president and COO Oscar Munoz called it “a critical infrastructure improvement that includes the installation of new rail, upgrades to the rail bed structure, and bridge improvements to enhance safety and more efficient rail service to customers in the Midwest.” Louisville is also in the midst of major improvements to its highway system, using a $162 million loan from the U.S. Department of Transportation’s TIFIA fund to finance the East End Crossing and Louisville-Southern Indiana Ohio River Bridges Project. The project is designed to provide two new bridges across the Ohio River connecting Louisville to Indiana along I-65. Once complete, the seven-lane bridge will improve connections from Indianapolis to the Southeast region and ports in Savanah, Norfolk, Virginia, and Florida.

O’Hare gets a multibillion dollar facelift In Illinois, the $8.8 billion O’Hare Modernization Program will help logistics providers throughout the Midwest navigate the congested Chicago metro area. Although most of the modernization project involves improvements directly to the airport for everyday commercial airline commuters, like concourse, terminal and parking infrastructure improvements, transportation and logistics providers in the area will also gain benefits from the improved traffic flow around O’Hare. The Elgin O’Hare Western Access Project (EOWA) will add 17 miles of www.foodlogistics.com

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new roads and 15 new or improved interchanges designed to better connect Illinois’ northwest suburbs to the eastern edge of O’Hare along I-90, the Tri-state Tollway (I-294) and the Midwest region in general. Once completed, the project is estimated to save drivers $145 million in time and fuel savings by 2040. It will also decrease traffic by 16 percent during rush hour, reducing delays by seven minutes for the 11-mile trip between the west side of O’Hare and U.S. Route 20.

Ohio: the gateway from the East Many areas along the eastern part of the Midwest region, namely Ohio and Indiana, suffered right along with the decline in industrial manufacturing in the North America. Ohio took a proactive approach that may have been perceived as risky at the time, but one that positions it to be a prime benefactor when it rebounds. “Anytime the economy slows down it is a good time to reassess and

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invest in infrastructure so you can be ready when things get better,” says Joe Chappel, seaport director at Toledo-Lucas County Port Authority. “Like the (Panama) canal, ports on the Seaway/Great Lakes need to modernize and reinvest to be relevant and competitive. We have seen the Seaway, vessel lines and ports all step up to make significant improvement to make the system more efficient.” Located within a day’s drive of nearly half the U.S. and Canadian industrial markets, Northwest Ohio is ideally located for businesses to reach customers and suppliers. Three of the country’s most traveled interstates (I-75, I-80, I-90) cross through Northwest Ohio, and Toledo is also the largest general cargo ports on the Great Lakes and one of the top five rail centers in the country in terms of tonnage handled. Northwest Ohio has also benefitted from the National Gateway initiative to create a more efficient double-stack Class I railroad route between mid-Atlantic ports and the Midwest markets. The cornerstone of that double-stack corridor is CSX’s Northwest Ohio Terminal that opened in 2011 near North Baltimore, Ohio. The new 500-acre intermodal terminal facility in North Baltimore handles more than 30 trains per day and serves as a critical transportation hub that allows shippers to avoid congested areas like Chicago.

St. Louis…one-stop spot for freight In 2013, the East-West Gateway Council of Governments (EWG) in Missouri and southern Illinois published a freight study that anticipated a 60 percent increase in national freight volume through the region by the year 2040. In order to capitalize on the potential increase in

freight, the EWG recommended the creation of a regional freight district designed to promote the region’s capabilities, which came to fruition when St. Louis-based Bi-State Development named Mary Lamie as executive director of the new freight district back in July. One of Lamie’s first tasks as executive director was to tout the region’s competitive advantages against “peer cities” like Nashville, Memphis, Indianapolis and Kansas City, advantages like the fact that St. Louis is the farthest point north on the Mississippi River unobstructed by locks or dams for barge transportation. The area also includes six Class I railroads, four Interstate highways with national access and five airports for multi-modal transportation. “What’s really important (in regards) to our ports and multi-modal facilities potential is that we have a lot of available real estate opportunities strategically located within that freight network,” says Lamie. “We have two international airports in our region with available capacity, which makes us an ideal location for e-commerce too, because of the available capacity along the network and a significant presence of FedEx and UPS in the region.” Although the Bi-State region and St. Louis specifically are poised to capitalize on the potential freight increase through the Midwest, Lamie is quick to point out there is strength in numbers when it comes to getting federal support for infrastructure projects.

With economic development groups working together to improve the infrastructure and enhance the region’s image for freight and logistics operations, there’s plenty of optimism for everyone involved in the global food supply chain throughout the Midwest states.

• The Merchants Bridge in St. Louis, a railroad-only bridge constructed from 1889-1890 and still in heavy use today, is a renovation project on the fast track.

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FL100+ VENDOR SHOWCASE

2015

REDUCING IMPACTS AND MANAGING GROWTH MASTERS GALLERY FOODS REDUCES IMPACTS, MANAGES GROWTH WITH IN-DEPTH LIFT TRUCK DATA.

reduced “theWenumber of

alerts to five — a

reduction of 88 percent. The iWAREHOUSE system plays an integral role in our continuous pursuit of increased productivity. — Dan Murphy, Warehouse Manager Masters Gallery Foods

asters Gallery Foods, a full-line supplier of cheese products with headquarters in Plymouth, Wis., made it a top priority to address lift truck impacts and reduce damage. Simultaneously, the company increased its lift truck fleet from 12 lift trucks to 19 trucks, and more than doubled the size of its main warehouse from 40,000 square feet to 110,000 square feet. The expansion included adding new racking and hiring new personnel. The cheese supplier quickly determined it needed a fleet optimization system to help manage its lift trucks and operators. It installed the iWAREHOUSE fleet and warehouse optimization system from The Raymond Corporation.

First Priority: Reducing Impacts

1-800-235-7200 raymondcorp.com

Masters Gallery Foods’ warehouse managers wanted to reduce damage occurring to new racks, products and lift trucks. The company already worked with Raymond and Stoffel Equipment Company, Inc., a Raymond Sales and Service Center, for its fleet of Reach-Fork® and stand-up counterbalanced lift trucks. So, when Stoffel suggested utilizing the iWAREHOUSE system to monitor and assess lift truck impacts, Masters Gallery Foods was quickly intrigued. The iWAREHOUSE system draws

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The Raymond Corporation

real-time, accurate information from the onboard computers — the vehicle managers — of lift trucks. Data from the iWAREHOUSE system is accessible through an online web portal called the iWAREHOUSE GATEWAY. The iIMPACT module of iWAREHOUSE notifies warehouse and service managers if there is an impact or other significant event while the truck is in motion. It offers two levels of notification: a warning that triggers a horn, buzzer or light when there is an impact; and an alert that is immediately sent to a supervisor via e-mail or text message to indicate a higher level of impact. “In our first full month of using iWAREHOUSE, we experienced a total of 45 alerts,” says Dan Murphy, warehouse manager for Masters Gallery Foods. “We provided additional training for the operators involved. Five months later, we reduced the number of alerts to five — a reduction of 88 percent.”

Encouraging Productivity In addition to reducing impacts, Masters Gallery Foods uses the iMETRICS module to monitor the average uptime and productivity of its lift trucks. As a result of the operational data gathered, the company plans to expand its third-shift operations. It also can use the iWAREHOUSE system to aid in its training of any new lift truck operators by setting operating parameters for those new personnel. With the iCONTROL module, Murphy can establish parameters by employee, setting maximum travel and lift speeds to keep new operators from moving too quickly until they have more experience.

FOOD LOGISTICS | JANUARY/FEBRUARY 201 6

Reporting Aids Sustainability Goals OSHA mandates operators complete a pre-operation checklist before using a lift truck. Prior to the installation of iWAREHOUSE, operators at Masters Gallery Foods filled out a paper form, which had to be filed and stored in compliance with OSHA’s requirements. Today, the iVERIFY module requires operators to complete the form on the iWAREHOUSE monitor mounted to the truck. The reports are electronically recorded and are accessible through the online web portal, helping Masters Gallery Foods to be more sustainable.

Maintenance Analysis When service technicians conduct maintenance, they record it in the iTRACK module. Over time, this allows evaluation of the costs of parts and labor, which helps in conducting root-cause analysis to determine what is contributing to maintenance needs, such as something in the operating environment, like an uneven floor or a concrete pole that could use some padding. “The iWAREHOUSE system plays an integral role in our continuous pursuit of increased productivity,” Murphy says. “It encourages proper lift truck operation, which helps reduce damage, maintenance, downtime and costs. It reduces time spent managing and storing paperwork because we can access real-time data electronically. It allows us the flexibility to manage our lift truck fleet anytime and from anywhere. At the end of the day, higher productivity is essential to our ability to grow.” www.foodlogistics.com

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NO MATTER THE MIX OR SIZE OF YOUR FLEET OR THE NUMBER OF FACILITIES… With iWAREHOUSE, you can utilize warehouse metrics, operator and fleet data to make strategic decisions—from right-sizing your fleet to labor management solutions to help optimize associates for maximum productivity and effectiveness. •

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FOOD (AND MORE) FOR THOUGHT

MAGED N. KAMEL BOULOS

ARE WE READY FOR THE

‘INTERNET OF FOOD’? F BOULOS

Such smart

“e-health” systems have the potential to reduce the pressures on health services and help people live healthier lives.

or many of us, the start of a new year is a time to set healthy eating goals after the excesses of the festive period. Knowing which foods to opt for and which to avoid or working out how much you should eat can be a complicated process. There is a range of food apps that can help you track the values of the food you eat, but a group of researchers argues that these apps have limited scope and varying degrees of accuracy. The academics have suggested there is potential to develop more powerful and comprehensive systems, which can help users make healthy choices tailored to their personal circumstances.

Scanner apps arrive A new breed of automated food scanner apps, devices and methods is emerging, which aim at identifying the nature of food and drinks in our diet. Methods include barcode scanning, near-infrared spectroscopy scanning with a mobile scanner, weighing with portable electronic scales, measurement of weight/portion size with smartphone photos and remote food and drink recognition by crowdsourced volunteers or dieticians. However, these methods are of limited value if we cannot reason with the identified food and drink items in the context of a user’s health conditions and preferences. Many of these methods work by connecting to databases, matching and identifying scanned items and reporting the results back to the user. The academics assert that ontologies, formal namings and mappings of sets of concepts and their complex relationships within a domain, could enable new “intelligent” functionalities that conventional

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databases alone cannot deliver. Our team has reviewed a number of food ontologies that could supplement these databases in an attempt to progress from mere automated identification of food and drinks to an application that can reason with identified items to better assist users. The ontologies we reviewed were: • FoodWiki: a mobile e-health system, which aims to help patients avoid unhealthy ingredients. • FOODS: A Food-Oriented Ontology-Driven System - Diabetes Edition: a food menu recommender system for people with diabetes. • Open Food Facts: A global food database based on contributions from individuals around the world that allows users to learn nutritional information and compare products. • AGROVOC: A large multilingual thesaurus covering all areas of interest to the Food and Agriculture of the United Nations. • Food Product Ontology: An ontology that describes food products with common representation, vocabulary and language to help manufacturers, retailers, governments and institutions publish their data. The ontologies are good examples to learn from and might also form a basis for future developments towards a universal comprehensive “smart diet recommendation” engine/application. These complementary types of knowledge and the corresponding ontologies are key to delivering a smart “Internet of Food” that, much like the wider concept of

the “Internet of Things,” would use devices with electronics, software, sensors and network connectivity to create opportunities for more direct integration between the physical world and computer-based systems to improve efficiency and accuracy.

‘Internet of Food’ An Internet of Food could provide context and user-specific diet insights and “intelligent” recommendations based on individual needs. An application like this could help with personalized menu planning, advising users on everything from nutrients they may be lacking, to foods containing ingredients they have intolerances to (e.g., peanut allergy). Such smart “e-health” systems could reduce the pressures on health services and help people to live healthier lives. But when would this technology become available and how much would it cost? This will be a huge undertaking involving multiple research centers, universities and industry. Based on the development of other technologies of similar scale, it will likely require several years and millions of euros of funding. Even if this kind of smart e-health technology is developed, decisions would still ultimately lie in the hands of individual users. For many it might prove easier to shut down a device than to switch off our cravings for the last of the Christmas chocolates! Professor Boulos is based at the Alexander Graham Bell Centre for Digital Health, University of the Highlands and Islands, Scotland, U.K. This article was developed from a paper published in Future Internet journal.

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