Food Logististcs July 2020 by Supply+Demand Chain/Food Logistics

AUTOMATION BOOSTS F&B SUPPLY CHAIN EFFICIENCIES

3PLS BRING TECHNOLOGY TO INFRASTRUCTURE

REGULATORY UPDATE IN COLD FOOD TRANSPORTATION

3PL 4PL 5PL VS. VS.

Hereâ&#x20AC;&#x2122;s why these partnerships matter, especially in a time of crisis.

SPECIAL PULL-OUT INSIDE

Issue No. 218 July 2020

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FoodLogistics.com

THE POWER OF PROPANE 7/22/2020 3:06:15 PM

Delays not only hurt your reputation, they also damage your bottom line. It’s why we’re dedicated to getting perishable products to market quickly and efficiently. All so you can keep your promises and your profits. It’s how we deliver confidence. Learn more at gopenske.com.

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ON THE MENU

July 2020 ISSUE NO. 218 COOL INSIGHTS

As Big Brands Optimize SKUs, Opportunity Abounds for Smaller Competitors

Whole Brain Consulting says the pressure is on to have products that people want and need on the shelf.

COVER STORY

3PL vs. 4PL vs. 5PL—Here’s the Difference Food Logistics breaks down the difference and why these partnerships matter, especially in a time of crisis.

3PL & REFRIGERATED 24

How 3PLs Bring Technology to Infrastructure

Discover some of the pitfalls that come with modernizing 3PLs.

SECTOR REPORTS WAREHOUSING

Using Automation to Boost Food & Beverage Supply Chain Efficiencies

Esker details how to prevent bottlenecks at the store and distribution center levels. TRANSPORTATION

How COVID-19 Accelerated Needed Transportation Policy Change

Consumer Brands Association uncovers how safety, efficiency, traceability and visibility will play a key role in the future of supply chain regulation.

SOFTWARE & TECHNOLOGY

Interoperability Begins with Temperature Monitoring Systems

As the demand for online groceries grows, companies look for the right technology to help ensure safety. OCEAN PORTS & CARRIERS

The Importance of Carrier Relationships

North Carolina Ports stresses the importance of open communication with ocean carriers.

A Pest Control Providers’ Role in Food Safety Systems During COVID-19

Fine Tune details a pest control provider’s role in a food safety system. FOOD (AND MORE) FOR THOUGHT

Pandemic Highlights Weak Links in the Supply Chain

Decernis takes a closer look at what’s interrupting normal food chain logistics.

Improving Demand Forecast Accuracy During and After COVID-19

Established demand forecasting technology platforms allow companies to more readily pivot in a time of crisis, according to Crisp.

DEPARTMENTS 06

Supply Scan

Food on the Move

Ad Index

COLUMNS FOR STARTERS

Supply Chain Technology for the Win

Editor-in-chief Marina Mayer says new technologies, features and functionalities are what enable companies to manage their operations anywhere, at any time.

WEB EXCLUSIVES Supply Chain Network Summit foodlogistics.com/scn-summit

Learn. Innovate. News. Knowledge. The L.I.N.K. to Global Supply Chain Intelligence foodlogistics.com/podcasts

CORRECTION: In Food Logistics’ June 2020 issue, Blue Ridge Global was unintentionally omitted from the additional listings in the Top Green Providers award. Also, in the Top Green Providers award, Trimble Transportation’s correct web address is transportation.trimble.com. We apologize for the confusion.

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Published and copyrighted 2020 by AC Business Media. 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 10 times per year in January/February, March, April, May, June, July, August, September, October and November/December by AC Business Media, 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, P.O. Box 3605, Northbrook, IL 60065-3605. Subscriptions: U.S., 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 from a U.S. bank. Printed in the USA.

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FOR STARTERS

FROM THE EDITOR’S DESK

DETAILS

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

S Marina Mayer Editor-In-Chief

ocial distancing in meetings and employees working from home—this is the New Normal for many in the supply chain and logistics industry. But, thanks to technology, it’s business as usual, regardless of a pandemic, natural disaster or even a sick day. When COVID-19 hit the United States, everything sort of paused. Just for a moment. And, then the supply chain and logistics industry started back up again. That pause was long enough to allow companies to innovate, pivot, create, band together and get new technologies on the market, but short enough where the industry didn’t miss a beat. That’s because these new technologies, features and functionalities are what enable companies to manage their operations anywhere, at any time. It’s the technology that provides visibility, traceability, credibility and sustainability from farm to fork. It’s the technology that promotes worker safety, food safety and supply chain resiliency. And, it’s the technology that allows me to “see” the beautiful faces of my team every Wednesday at 11 a.m. CST for our Facebook Livestreams. (Go to facebook.

WWW.FOODLOGISTICS.COM

com/FoodLogistics to learn more). Technology also manages fleet operations, temperature control and rules and regulations. It maintains customer/vendor relationships, produces data that “tells a story” about a products’ journey and mitigates risk. Without technology, the supply chains of today would’ve definitely crumbled. Go to foodlogistics.com/technology to check out all of the new software and technologies new to the market. Also, submit nominations here at foodlogistics.com/21136485 for our FL100+ award, which honors leading software and technology providers that ensure a safe, efficient and reliable global food and beverage supply chain. And, be sure to register for our next SCN Summit series on Navigating Supply Chain Operations Amid COVID-19, scheduled for July 28. at https://bit.ly/2VR9FNj I don’t think anyone really knows what the future holds, but it’s safe to say that technology will continue to bring home a win for the supply chain industry.

PRINT AND DIGITAL STAFF Group Publisher Jason DeSarle Sales Associate Brian Hines Editor-in-Chief Marina Mayer mmayer@ACBusinessMedia.com Associate Editor Brielle Jaekel bjaekel@ACBusinessMedia.com Web Editor Mackenna Moralez mmoralez@ACBusinessMedia.com Senior Production Manager Cindy Rusch crusch@ACBusinessMedia.com Art Director Willard Kill Audience Development Manager Angela Franks ADVERTISING SALES (800) 538-5544 Group Publisher Jason DeSarle (440) 476-9526, jdesarle@ACBusinessMedia.com Sales Associate Brian Hines (647) 296-5014 bhines@ACBusinessMedia.com CIRCULATION & SUBSCRIPTIONS P.O. Box 3605, Northbrook, IL 60065-3605 (877) 201-3915, Fax: (847)-291-4816 circ.FoodLogistics@omeda.com LIST RENTAL Jeff Moriarty, InfoGroup (518) 339-4511 jeff.moriarty@infogroup.com REPRINT SERVICES Brian Hines (647) 296-5014 bhines@ACBusinessMedia.com AC BUSINESS MEDIA Chief Executive Officer Barry Lovette Chief Financial Officer JoAnn Breuchel Chief Digital Officer Kris Heineman Chief Revenue Officer Amy Schwandt VP Audience Development Ronda Hughes Director of Digital Operations & IT Nick Raether Director of Digital Strategy Joel Franke Group Content Director Jon Minnick Published and copyrighted 2020 by AC Business Media. 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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BUILT TO SUPPORT THOSE WHO SUPPORT OUR WORLD. WHEN THE NEED HA S NE VER BEEN BIG GER, FORD IS PROUD TO HELP GE T THE JOB DONE. JUST AS WE HAVE BEEN FOR OVER 100 YEARS.

Aftermarket equipment shown. Cargo and load capacity limited by weight and weight distribution.

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SUPPLY SCAN

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

KENCO ANNOUNCES SUPPLY CHAIN INNOVATION LAB EXPANSION

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DEMATIC TO AUTOMATE TWO AMERICOLD TEMPERATURECONTROLLED WAREHOUSES

Dematic has been awarded an automation project for two temperature-controlled warehouses with Americold. “At Americold, we have a unique lens into the temperature-controlled supply chain. To help us offer world-class service to our customers, we were seeking an automation partner to facilitate the future hyper-connected, enabled supply chain in retail fulfillment,” says David Stuver, executive vice president of supply chain solutions at Americold. “With large-scale global capabilities and innovative automation solutions, Dematic is an ideal partner to help us create state-of-the-art facilities that will help Americold transform the supply chain.” The new facilities will be true four-wall automated solutions with automated mixed-case palletizing systems to ensure cube optimization improvements. Highly efficient packing will mean fewer trucks needed for delivery, and shelfready pallets will allow for the quickest possible stocking of store shelves.

Kenco Logistics announced plans to open a dedicated physical warehouse space to its supply chain Innovation Lab. The 10,000-square-foot space will serve as a true test facility for the Kenco team of innovation specialists to assess value-added technology and provide advanced visibility into these solutions. Testing potential supply chain management solutions and technological advances outside of a live operation will enhance accuracy, sustainability and improve implementation speeds for Kenco’s customers. “We are dedicated to leading the digital transformation of the supply chain,” says Denis Reilly, president and CEO, Kenco Logistic Services. “The Innovation Lab is one example of our commitment to providing well-vetted, cutting-edge technologies to our customers, allowing them to achieve improved performance and enhanced supply chain value.” A combination of technology experts and supply chain engineers will deliver full value insight on a wide range of logistics solutions, with the scale of the warehouse space allowing these technologies to be tested simultaneously.

VARCODE’S SMART BARCODE LABELS TRACK TIME AND TEMPERATURE OF PERISHABLE FOODS

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A new digital labeling technology from Varcode enables grocers and meal kit suppliers to track food temperatures throughout the cold chain, while ensuring compliance, increasing product sustainability and reducing costly waste. “Fifty four percent of consumers who have not ordered food online cite concerns about temperature freshness. Additionally, 27% of consumers say they’ve had temperature problems with food deliveries, and 8% say they or someone they know has become sick from eating perishables with temperature problems,” says Joseph Battoe, president and CEO of Varcode. “A primary concern for grocers and meal kit companies is sustaining the current growth pattern, and a major factor in that effort is their ability to ensure product safety and build customer confidence.” Varcode’s solution relies on digital “smart barcode” tags applied to each perishable food bag or box, which dynamically change based on customized time and temperature parameters. The labels use a combination of precisely tuned chemicals and a uniquely printed layer to capture temperature variances when and where they occur and create a permanent, irreversible digital record accessed by Varcode’s proprietary smartphone app. Varcode’s digital records are cloud-based and accessible by grocers and meal delivery companies from the point of processing through customer delivery.

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

RESEARCH REVEALS OMNICHANNEL GROCERY SHOPPERS SEE TRANSPARENCY AS ESSENTIAL ACROSS IN-STORE AND ONLINE SHOPPING

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SURVEY DETAILS TODAY’S GROCERY SHOPPING EXPERIENCE

Grocery shopping has evolved significantly over the last few months, with more people considering contactless delivery and pickup options. Shopping in-store for groceries remains the most common method, according to a DISQO survey. In total, 85.7% people report that they recently acquired groceries via in-store shopping, compared to 26.7% of people who used grocery delivery or grocery pickup options. Most people only use one method of shopping to acquire groceries. While some use multiple methods to acquire their groceries (13.6%), most shoppers (86.4%) acquire their groceries through a single channel, whether choosing only in-store shopping (73.3%), grocery pickup (7.4%) or delivery (5.7%). While 71% respondents report satisfaction with in-store grocery shopping, 81% and 80% report satisfaction with grocery pickup and delivery, respectively. Among people who have recently used all three grocery shopping methods (instore, pickup and delivery), online ordering for store pickup generated the highest level of shopper satisfaction. Among those who only shopped online for delivery and pickup, delivery provided a slightly higher level of shopper satisfaction (at 79.7% for delivery compared to 78.1% for pickup).

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Nearly 81% of shoppers say transparency is important or extremely important to them both online and in-store, according to “Transparency Trends: Omnichannel Grocery Shopping from the Consumer Perspective,” released by The FMI - The Food Industry Association and Label Insight which touts the rationale for how. The analysis offers the leading considerations among consumers for how they define transparency when grocery shopping. Key findings include: • Consumers evaluate core factors that make a brand transparent. Shoppers say a brand or manufacturer is transparent if they provide a complete list of ingredients (62%), the description of ingredients is in plain English (53%), provide certifications, such as USDA organic (48%) and provide in-depth nutritional information (47%). • Responsibility for transparency is met with distrust. 61% of omnichannel shoppers believe manufacturers, brands or government institutions are completely responsible for providing detailed product information; however, less than onehalf of shoppers completely trust product information from manufacturers and brands (41%) or from government institutions (46%). • Consumer needs have changed and transparency needs to evolve along with them. More shoppers are sticking to a diet or health-related eating program in 2020 (64%) than in 2018 (49%); and their shopping behaviors are impacted even more by food allergies, intolerances or sensitivities than two years ago, with 44% indicating this in 2018 and 55% in 2020.

NEARLY 70% OF GROCERY SHOPPERS CAN NOW FIND FOODS THEY WANT, WHILE SOME 30% STILL EXPERIENCE OUT OF STOCKS

The grocery cases and shelves that were left barren in the early days of the COVID-19 pandemic, for the most part, are back to their pre-COVID-19 states. In the week ending May 28, 68% of U.S. grocery shoppers reported to The NPD Group that they hadn’t encountered any out of stocks of the foods and beverages they were shopping for during the week. This wasn’t the case for 32% of shoppers who did experience out of stocks when they shopped for foods and beverages during the same week, according to the findings of NPD’s NET COVID-19 Pantry & Food Strategy Tracker. Although consumers have moved on from the panic grocery shopping they did in the early stage of COVID-19, they still maintain the same level of foods and beverages inventory. Across all categories, there has been only a 3% drop in the estimated number of food and beverage packages on hand in homes compared to early April, reports NPD. “With the majority of households still preparing all their meals and snacks in-home in May and the continuing supply chain challenges, limited or out of stock situations are inevitable,” says David Portalatin, NPD food industry advisor and author of Eating Patterns in America. “Considering the unprecedented situations the COVID-19 pandemic has presented over the last few months, the U.S. food supply chain has held up remarkably well.” Pexels

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SUPPLY SCAN

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

FOURKITES INTRODUCES NEW FEATURES TO IMPROVE SAFETY AND PRODUCTIVITY OF FRONTLINE SUPPLY CHAIN WORKERS

FourKites announced a string of new collaborative features to facilitate and simplify communication across the end-to-end supply chain, while also reducing human contact to decrease the risk of virus transmission to frontline workers. The new features extend the beneﬁts of real-time visibility data to various frontline workers—customer representatives, dispatchers, drivers, retail workers and warehouse managers—who previously lacked digital access to crucial information to facilitate their work. The new features also help ensure social distancing, minimizing human contact on FourKites the supply chain front line during the COVID-19 pandemic. “With FourKites’ direct-store-delivery and merchandiser solutions, we now have visibility into the last mile of our supply chain - from our warehouses to our retailers - instead of relying on a printed route plan that does not update as delivery sequences change,” says Brett Frankenberg, senior vice president, product supply planning and bottle sales at Coke Consolidated. “FourKites is creating visibility of the physical via digital and facilitating better frontline decisions. This enables our merchandisers to service their stores with conﬁdence, knowing the product in question has been delivered or is expected to be delivered based on real-time information. This reduces unproductive phone calls, texts and overall uncertainty.”

DOMINO’S PIZZA, DRAGONTAIL SYSTEMS PARTNER TO ENHANCE PIZZA SCANNER

Domino’s Pizza Enterprises and Dragontail Systems announced the continuation of their partnership, which has seen the development of world-ﬁrst technology, including the DOM Pizza Checker, which launched in May 2019. DOM Pizza Checker is a smart scanner that sits above the cut bench and uses advanced machine learning, artiﬁcial intelligence and sensor technology to check the quality of every pizza before it goes out the door. Since launch, DOM Pizza Checker has scanned more than 50 million pizzas, providing stores with an invaluable training tool and customers with more visibility over their meal. “In the current environment, where food safety and hygiene has never been more important, DOM Pizza Checker has played an instrumental role in providing customers with complete visibility over their meal,” says Domino’s group CEO and managing director Don Meij. “There is no quick-service restaurant in the world that can assure customers their order has passed a rigorous quality test and send them a real-time image of the meal they will receive. This way our customers can know with absolutely certainty that once their piping hot pizzas leave our oven, the only hands that touch them are theirs.” Dragontail managing director Ido Levanon said the company was pleased to collaborate with Domino’s on this innovative project. “These are challenging days, and we are pleased to provide Domino’s with an innovative technology solution that enables them to provide customers with the safest and most reliable food delivery service possible,” he adds.

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LiftMaster

LIFTMASTER INTRODUCES NEW FRONT-OFHOOD COMMERCIAL DOOR OPERATOR

LiftMaster is making it easier to motorize low headroom rolling steel doors and grilles with its new Front of Hood Mount Commercial Door Operator. Its unique split system design brings programming capabilities and control down to the ﬂoor level, simplifying installation and setup. The operator is built to retroﬁt existing rolling doors within manufacturing, warehousing, retail and parking applications for a complete UL safety-compliant system. Additionally, its variable frequency drive technology provides various commercial spaces with speed settings that can be adjusted up to 12 inches per second. The operator also includes smooth start/stop technology for minimized wear and tear on the door, thus reducing repair and maintenance costs and increasing operational productivity. www.foodlogistics.com

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SUPPLY SCAN

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

A M KING BREAKS GROUND ON LARGEST U.S. AVOCADO RIPENING AND PROCESSING FACILITY

A M King began construction of a 262,000-square-foot ripening and cold storage distribution center for Mission Produce avocados. The new mega-facility will be located in Laredo’s Pinnacle Industry Center on 32.6 acres adjacent to the Rio Grande River and the Mexican Border. It will allow the company to capitalize on the continued growth of its signature product in the nation’s busiest land port. Mission plans to initially hire 75 employees when the project is complete in May 2021. “We are happy to join Mission Produce in the design and construction of the largest avocado plant in the country,” says A M King vice president Dan Crist. “Our food industry expertise, coupled with our track record of successfully completed cold storage and distribution projects makes this an ideal partnership.” “The Laredo, Texas, facility will shorten our replenishment time to our network and A M King add flexibility in managing inventory,” says Mission Produce’s president and CEO Steve Barnard. “The City of Laredo is strategically positioned on the border of Texas and Mexico, making it an ideal location for the distribution of Mexican avocados into the United States. By investing in Laredo, we are redoubling our commitment to serving customers, providing value-added services, creating jobs and leading the avocado industry.” A M King provided Mission Produce with full-site consultancy services, which included analysis of the property currently needed by the business today, as well as for future planned expansions. A M King also worked in tandem with Mission Produce to determine adequate site infrastructure requirements for securing local economic development incentives. Additionally, A M King managed the complicated process of acquiring the site while meeting all zoning and municipal ordinances specific to site development of Greenfield land in Laredo. The scope of this project will include design and construction of ripening rooms; coolers; forced air cooler; cooler dock; dry goods storage; a bagging and production area; offices and dispatch; a border patrol office; and a USDA office.

ATLAS COPCO’S NEW REFRIGERANT DRYER DELIVERS 50% ENERGY SAVINGS

Atlas Copco introduced the FD VSD 100-300, a new refrigerant dryer with VSD technology, available in six sizes ranging from 212 to 636 cfm, offering customers up to 50% savings on indirect energy costs and up to 70% savings on direct energy costs. “The launch of the FD VSD 100-300 is in line with our engineering principles of continuing to bring improvements to our customers and take technology to the next level,” says Trey Ragsdale, vice president of industrial air for Atlas Copco Compressors USA. “Our customer and application-geared focus led to the development of this product, and the comprehensive nature of our complete range means we can be confident in having the right product for the right application with no need to compromise.” Atlas Copco’s new FD VSD 100-300 series is more compact than a typical thermal mass dryer, and does not require a thermal mass heat exchanger. In addition, the FD VSD 100-300’s high-efficiency heat exchanger was engineered specifically to reduce the pressure drop in the incoming air and eliminate any pre-cooling inefficiencies. The new FD VSD 100-300 comes with an Elektronikon Touch controller, an ethernet connection and SMARTLINK Atlast Copco remote monitoring. www.foodlogistics.com

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SURVEY REVEALS E-COMMERCE SHIFTS IN GROCERY MAY CONTINUE POST-PANDEMIC

A new survey from Inmar Intelligence identiﬁed a shift in shopper behavior as consumers adopt e-commerce for grocery purchases. The survey looked at the grocery shopping habits of more than 300 consumers from across the United States during the COVID-19 pandemic. Results show that since the onset of the pandemic, 56.7% shop for groceries online more often now compared to before the pandemic, indicating that a strong e-commerce presence is necessary in order to see continued growth and create brand loyalty as a grocery retailer. Of the consumers surveyed, 78.7% reported shopping online for groceries since the onset of the pandemic, a 39% increase. Additionally, survey results revealed that consumers were inclined to select a retailer based on availability and convenience. Nearly 51% of those surveyed preferred a grocery retailer that had the desired product type available for purchase, and 39% selected a store based on whether the grocery pick-up or delivery time was available in the preferred window. The survey also indicated a shift in where consumers are purchasing their groceries. Case in point: 51.4% of consumers purchased groceries from Amazon since the start of the pandemic, a 32% increase. Brand manufacturers and online grocery stores also saw increases in grocery sales, with a 117% increase in direct-to-consumer grocery sales and a 48% increase in grocery sales, respectfully. JULY 2020 | FOOD LOGISTICS

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FLEET ADVANTAGE’S SAFETY FIRST PROGRAM HELPS GROCERS UPGRADE INTO NEWER TRUCKS TO MITIGATE RISK

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Fleet Advantage announced the Fleet Advantage Safety First Program, helping grocers upgrade into newer trucks with advanced safety features. Under the program, Fleet Advantage purchases 2017 and older model tractors and leases them back for an interim period while the company transitions to new state-of-the-art trucks with the latest safety technology. The company’s speciﬁcation experts then work with the company to design new trucks for maximum safety, fuel efﬁciency, lowest maintenance cost and highest re-sale values. They include advanced safety features in each spec beyond the standard OEM features and work with the OEMs and vendors to achieve this at minimum cost. By focusing on safety, Fleet Advantage is ultimately advising companies about risk that they may otherwise not likely identify, as well as a solution that could save millions of dollars in cost reduction while avoiding damage to their corporate image and brand identity.

SENSITECH INTRODUCES NEW SENSIWATCH PLATFORM FOR END-TO-END, REAL-TIME, IN-TRANSIT VISIBILITY

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STUDY: RISING VEHICLE INSURANCE COSTS ARE MAIN BUSINESS ISSUE

CameraMatics asked over 600 small business owners in the UK, Ireland, and the United States about their main vehicle-related business challenge. Both in the UK/Ireland and United States, business executives overwhelmingly told CameraMatics that rising insurance costs came top of their list of vehicle challenges, with 53.3% of UK/Ireland and 33.7% of U.S.respondents reporting this as their primary concern. However, it is clear insurance is more of an issue for UK/Irish companies, as it grabbed over 50% of the vote, compared to the United States, where it was just one-third. Insurance providers are clear that robust risk management has a positive effect on premiums and that there are many simple and affordable vehicle solutions available to small business owners. “Small businesses everywhere rely on vehicles to run their operations. From one or two cars and vans to larger vehicles and bigger ﬂeets, vehicles keep businesses moving and serving their customers. This has never been more important than at present when many services need to be brought to customers’ doorsteps,” says Mervyn O’Callaghan, chief executive ofﬁcer of CameraMatics. CameraMatics

Sensitech announced a new state-of-the-art, end-toend, real-time, in-transit visibility solution called the SensiWatch Platform. The SensiWatch Platform, which leverages innovative IoT data-collection instruments and advanced data-management tools, will ensure a single end-toend view into customers’ supply chains. Leading with a user-centric design, the platform includes a data warehouse, Application Programming Interfaces (APIs) for integrating with existing customer applications and third-party data sources, multiple levels of reporting and real-time analytics. “This integrated approach will improve customer responsiveness through the continuous delivery of information via our cloud-based platform and its accompanying mobile support,” says Steve DiRubio, chief operating officer, Sensitech. “Further, the SensiWatch Platform is solution-focused and specifically designed to meet the needs of each segment of the supply chain.” The platform supports global in-transit inbound logistics (shipper to destination) and outbound logistics (multiple-stop distribution) shipments. In each case, the solutions are easy to implement and the cargo is monitored continuously, sending operational and actionable information to the cloud. Alerts and notifications provide users with updates on the product’s condition before it arrives at its destination, enabling early intervention for addressable issues.

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ONERAIL SELECTS PENSKE TO SUPPORT NEW NATIONAL TRUCK RENTAL ACCOUNT PROGRAM OneRail selected Penske Truck Leasing to launch a National Truck Rental Account Program for its logistics partners. The collaboration will reduce barriers to rapid growth as the demand for ﬁnal-mile delivery capacity, caused by COVID-19, has skyrocketed. “Due to stay-at-home orders, the industry has seen a dramatic increase in online orders, but nobody knows how long the lockdowns will last, causing uncertainties. That is why we have launched the National Truck Rental Account Program, so our logistics partners may expand and contract with ﬂuctuating demand in delivery capacity,” says Matt Schultz, vice president of logistics partnerships at OneRail. The program is designed to reduce overhead costs for OneRail logistics partners by enabling a wide range of rental options, from a panel van, to a box truck, to a freight trailer.

PORT HOUSTON RECEIVES NEARLY $80M INFRA GRANT

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VERIZON CONNECT HELPS MITIGATE RISK AND IMPROVE DRIVER SAFETY WITH NEW INTEGRATED VIDEO FOR FLEET To help mobile businesses gain additional visibility into the safety of their drivers on the road, Verizon Connect has launched an extension of its Integrated Video for Reveal product for fleet-based customers called Integrated Video for Fleet to help mitigate risk and improve safety and driver behavior. Integrated Video uses artificial intelligence and machine learning to help businesses improve driver behavior and understand details of specific driving events. The smart dash-cam solution intelligently captures and automatically classifies harsh driving events in near-real time, providing video analysis that can be used to help keep drivers keep safe on the road, protect against false claims in the event of an incident and coach and reward drivers. “Integrated Video provides businesses with increased visibility and context, enabling them to protect the bottom line and leverage video footage to reward and educate drivers for good driving behavior,” says Kevin Aries, head of global product success at Verizon Connect. “The user experience and video classifications are continuously improving, helping businesses make more informed decisions that can lead to improved safety, productivity and efficiency within their fleet of vehicles.”

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Port Houston was awarded nearly $80 million toward its efforts to restore and improve wharf and yard space at its Barbours Cut Container Terminal. The U.S. Department of Transportation (USDOT) awarded $79,472,000 from the Infrastructure for Rebuilding America (INFRA) program to Port Houston, which was the full amount requested for Port Houston’s total $198 million project, with a local cost share of 60% and the INFRA grant of 40% of the future construction costs. “This funding support will help bring significant economic benefits to the region and nation while maintaining an efficient and safe movement of commerce to the U.S.,” says Port Houston executive director Roger Guenther. The restoration and upgrades are needed to handle the current and future demand of cargo calling at Barbours Cut. The project also provides environmental benefits and emissions reduction.

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MSC MEDITERRANEAN SHIPPING INTRODUCES INSTANT QUOTE FUNCTION FOR ONLINE CARGO BOOKINGS

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ELITE TRANSIT SOLUTIONS INTRODUCES NEW BOOK IT FUNCTIONALITY

Elite Transit Solutions introduced Book It, an additional automation feature for its Freight Market product. Book It provides freight market users with a simple, automated one-step process to reserve loads without the need to directly contact the ELITE team. “With the addition of Book It, we have accomplished completion of a fully automated brokerage process. At ELITE, we are continuously evolving our Freight Market product to provide carriers with even more features and beneﬁts that make their lives easier,” says Michael Johnson, president and CEO of Elite Transit. “We are committed to providing carrier partners with the best technology and personal care to deliver excellence in freight management, and this latest feature gives them a new option for connecting with us to get the job done.”

DAT LAUNCHES ALL-IN-ONE MOBILE APP TO MAKE LIFE EASIER FOR TRUCK DRIVERS

DAT Solutions launched a new service that brings together the best trucking tools into one easy-to-use mobile app. DAT One is a free app created to help truck drivers ﬁnd, book and deliver loads. Not only does it provide access to loads on DAT’s load board within a 200-mile radius of the driver, but it also offers a multitude of discounted amenities to enable dock-to-dock support for drivers. The new app provides access to essential services while on the road, such as parking availability and truck stops, as well as detailed truck maps that enable drivers to plan their routes based on equipment and cargo. Key features include truck parking, detailed truck maps, favorite truck stops, fuel prices, weigh stations, rest areas, hotels for truckers, truck services and nearby loads and tracking. “We are thrilled to deliver this great new DAT experience to every truck driver at no cost,” says Nadya Duke Boone, DAT’s vice president of product. “This new app is designed to help drivers navigate the uncertainty of the freight market by giving them a single place to ﬁnd the tools they need most.” DAT

MSC Mediterranean Shipping upgraded its e-business platform myMSC with the addition of a new online Instant Quote function for real-time shipping rates for container bookings. Using instant quote, customers can generate an online quote in less than a minute, 24/7 online. They then have the option to instantly complete the booking with the generated quote on myMSC. Alternatively, they can save the quote or forward it to multiple contacts for booking at a later stage. The instant quote function is currently only available for shipping trade routes from North America to Europe and from Asia to Europe, with plans for the addition of more trades over the course of 2020. “The COVID-19 pandemic has accelerated the trend toward digitalization within the industry and the importance of engaging customers through multiple platforms, including through e-business. As such, this upgrade of myMSC is a clear illustration of our continuing efforts to invest in digital business transformation with the aim to improve efﬁciency and transparency and to give our customers more options,” says Andre Simha, chief digital and information ofﬁcer.

Elite Transit Solutions

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COOL INSIGHTS

AS BIG BRANDS OPTIMIZE SKUS, OPPORTUNITY ABOUNDS FOR SMALLER COMPETITORS T

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small sampling of consumers. Once they’ve phased out those obscure SKUs, it’s unlikely they will return. And, that means there’s going to be holes on grocery store shelves available for other brands to ﬁll when stores conduct shelf re-sets. This re-engineering will also allow big brands to see how much cannibalization there really was with their SKU proliferation over the years. This massive shift among consumers and manufacturers is likely to have a long-term effect on innovation and the introduction of new products, at least from major players. It can take a major brand up to two years to develop a new product or expand on an existing line. And, that’s when they have access to a wide range of tools—multiple iterations of a recipe, sampling, focus groups, at-home trials, concept testing—which have been curtailed by the stay-at-home regimens. Post-COVID-19, the big brands will be SKU-optimized to such a degree that there will be fewer of

those familiar name line extensions in the market, less new things for consumers to try and no store sampling or manufacturers’ coupons to stimulate trial. That’s where opportunity comes in for new players. For example, smaller brands can often take a product from concept to distribution in 3-4 months. During the shutdown, some smaller companies have undergone remote startups, remote line trials and overnight shipping of samples. It’s not ideal, but it works. Although it’s difficult for any manufacturer to introduce a new product during a global pandemic, smaller brands can lay the groundwork to respond to the lack of variety in the future. This window of opportunity for smaller brands however may be relatively short-lived. Those who can tap into what consumers are looking for right now can use the time when big brands are figuring out what to do next to establish firm footholds to hold their shelf space when major brands start innovating again.

Getty Images

he Coronavirus disease (COVID-19) pandemic has wreaked havoc on the global economy and supermarket experience, changing how Americans William Madden grocery shop and eat. Even before co-founder, COVID-19, many of the oldest and Whole Brain Consulting most familiar supermarket brands that have come close to the satuAs big brands ration point in terms of consumer have been penetration growth have tried to stimulate growth by developing optimizing unique flavors and new packaging production, formats that allow for more shelf they are also space and some excitement with discontinuing new customers. But, the crisis turned that stratthose products egy on its head, as volume has, for that only appeal lack of a better word, gone crazy. to a small However, factories weren’t ready to meet the 20-30% increase in sampling of demand, much less making drastic consumers. changes to their operations. Under normal circumstances, a facility might run a manufacturing line for eight hours and spend up to four hours before and up to 16 hours afterwards cleaning and prepping the line to change over to that incremental brand extension. But, for a brand that can’t keep up with demand for their primary product, it makes no sense to shut For a brand down production for pre- and that can’t keep post-production cleaning on line up with demand for their primary extensions that have unique flavors, product, it makes but not a big audience. Instead, no sense to shut manufacturers cut out products down producand flavors that only have limited tion for pre- and appeal to service their main line of post-production cleaning on line goods. extensions that As big brands optimize produchave unique flation, they also discontinue those vors, but not a big products that only appeal to a audience.

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COOL INSIGHTS

A PEST CONTROL PROVIDERS’

ROLE IN FOOD SAFETY SYSTEMS DURING COVID-19

A Keith Robinson, vice president, pest control service, Fine Tune

Here are some things to keep in mind regarding pest control services amid COVID-19.

s a food manufacturer or distributor in the age of the Coronavirus disease (COVID-19), you have likely made dramatic changes to processes in order to protect staff and safeguard products. In fact, the food industry had already made many changes over the last few years in an effort to comply with the Food Safety Modernization Act (FSMA). But, for today’s New Normal, food safety and quality control staff are likely already taking proactive steps to maintain compliance. . It is this proactive focus that has allowed the food industry to quickly adjust to the COVID-19 pandemic. FSMA already required a deep dive into operations, focusing on prevention, surveillance and rapid response and recovery. The lessons learned in these processes can help now, as the industry develops frameworks and processes to mitigate the risks associated with an airborne illness. That’s why pest control providers play a valuable role in a company’s food safety system. In fact, it has never been more critical that they align their service protocols to your company’s evolving processes than right now. As your team adjusts in response to COVID-19 and implements policies to prepare

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for any future pandemics, here are some things to keep in mind regarding pest control services. Service automation in the post-COVID-19 world is no longer just an “added bonus” offered by pest control providers. It must be a requirement. If your long-time local provider says that they simply cannot afford these more robust, modern systems, this may force some difficult decisions. In the past, you may have conceded in this area to retain a trusted local partner, but in a world where the goal is to limit opportunities to transfer viruses, it is time to revisit this issue. The good news is that software has entered this space, lowering automation costs for pest control providers. Several of these software platforms allow technicians to complete work orders on their phones and email finished reports directly to a member of your staff without any physical contact. By shifting to a 100% paperless system, you can limit unnecessary contact and potential exposure. Now is also a good time to revisit the necessity of all the devices placed in and around your facility, especially those located near staff. Standards have evolved to allow for placement flexibility based on trends and previous captures. If devices are being checked in areas that would require a technician to come near your staff, you should challenge whether that device is actually necessary. If a device is not needed, remove it. If it is, be sure the pest control provider checks it at a time when minimal staff is present. Even before COVID-19, remote monitoring devices with state-ofthe-art sensors were starting to catch on. These devices provide real-time data and don’t have to be manually checked. While your current equipment may require

some modification (and there are, of course, upfront costs to integrate the technology), the offsets in reductions in labor rates and opportunities for exposure in your facilities can’t be overlooked. Require your vendor to provide a service process flow, so you can attempt to reduce close contact with staff. This would also provide useful information to sanitation teams, as they attempt to focus their efforts on keeping contact surfaces cleaned and disinfected. If you have a large facility, your provider may be inspecting and/or treating different areas of the facility at different times. Require them to create zone maps to keep them in controlled areas on specific days. If problems arise in other areas, they should notify your team, so those surface areas can be addressed as needed. Communication was important before COVID-19, but it is absolutely critical now. The provider needs to report through all of the same control points as other members of your staff. It is also important that you know which other accounts your provider services. Did your technician just come from a processing facility with known positive cases of COVID-19? How are they sanitizing their equipment? Do they change uniforms and shoes between facilities? These questions should also be posed to other vendors that enter the facility. COVID-19 has made an impact on every industry in one form or another, perhaps none as profound as the food industry. The changes implemented in response to this pandemic are likely to remain in place for years to come. That’s why it’s vital to ensure updated processes are optimal from both a safety and efficiency standpoint, and still reduce pest control costs at the same time.

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COVER STORY

BY MARINA MAYER, EDITOR-IN-CHIEF

3PL VS. 4PL VS. 5PL —Here’s the Difference Food Logistics breaks down the difference between 3PLs, 4PLs and 5PLs and why these partnerships matter, especially in a time of crisis.

GlobalTranz’s COVID-19 truckloadrate-permile impact heat map illustrates the Top 20 rate hot spots in the United States.

t’s no secret that the Coronavirus disease (COVID-19) pandemic has placed a strain on several areas of the supply chain. Restaurants are closed, leaving foodservice distributors to pivot into direct-to-consumer (DTC). Grocery stores shifted to keep up with online shopping, and for some, implement DTC delivery. Even, cold food and beverage processors revamped the way they produce, store and ship product in order to keep up with the inﬂux of demand due to consumer stockpiling. According to a study by Gordon Haskett Research Advisors, 41% of online grocery shoppers were buying groceries online for the ﬁrst time as a result of COVID-19, which may result in a longer-term change in buying behavior. “E-commerce, online shopping, food delivery, grocery delivery and pretty much everything else will experience hyper growth as the economy opens back up,” says David Miller, general manager of platform services for 3PL Central. “This means that 3PLs and 4PLs

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that cater to these segments are going to continue to see sustained growth.” In a time like today, where COVID-19 has disrupted many links in the supply chain, it was the third-party logistics (3PL) providers who remained steadfast in keeping product moving from Point A to Point B. In fact, the 3PL market size exceeded $1 trillion in 2019 and is estimated to grow at a CAGR of 9% between 2020 and 2026, according to a study presented by Global Market Insights Inc. But, when it comes to deciphering between a 3PL, 4PL and even a 5PL, there are many things to consider. First off, neither a 3PL or 4PL is better or worse for the cold food and beverage industry; it just depends on a company’s core competency, resource needs and budget, says Darlene Wolf, senior vice president of strategic partners for Arrive Logistics. “The only downside to investing internally is losing ﬂexibility to

make timely changes effectively,” Wolf adds. “3PLs and 4PLs can and should be establishing best practices in the industry because they are working with a variety of companies with a variety of challenges, giving them more experience to navigate the unexpected.” A 3PL manages outsourced logistics and distribution activities for a speciﬁc customer, while a 4PL manages customer 3PLs and provides complete visibility within a one-stop shop, says Don Klug, vice president of sales distribution center management, Penske Logistics.

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“The main difference between a 3PL and 4PL is the control and accountability that the 4PL has over the customer’s supply chain,” he adds. “Not all 3PLs will transition into a 4PL, and the main reason is that they may not want to offer that specific service. Also, other companies may offer just the 4PL service, where they have a network of 3PLs to do the physical work; the 4PL then provides the complete visibility piece to offer overall accountability of the supply chain to the customer. There is such a thing as a 5PL, but it’s simply a 4PL

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that is managing multiple clients through multiple solutions and technologies.” 3PLs are also directly responsible for designing, implementing, operating or managing a solution for a specific part of a customer’s supply chain, whereas 4PLs provide an integrated logistics and supply chain ecosystem covering multiple different parties, including different 3PLs, carriers, warehouse services providers and other solution and service providers, according to Rajiv Saxena, senior vice president, supply chain solutions and innovation for Kenco Logistic Services. “A key difference from 3PLs is that 4PLs do not manage or have responsibility for performing or managing the day-to-day activities. 4PLs design the solution framework and 3PLs work as per the relevant part of the solution framework provided by 4PLs,” adds Saxena. “4PLs go beyond service providers. Like 3PLs, they provide full integration with different types of solution and service providers covering all aspects of a supply chain and have a deeper understanding of customer’s long-term vision and goals. Both 3PL and 4PL offerings can come from within the same company—it’s really based on the customer’s needs and provider’s capabilities.” 3PLs and 4PLs are also similar in that, “they both enable shippers to focus on their core competencies by managing supply chain and logistics needs,” says David Commiskey, vice president of customer solutions for GlobalTranz. “Now, in terms of how they’re different—a common misconception is that 3PLs are brokers, and while the two are similar, they’re not interchangeable. 3PLs act as a strategic partner for shippers as they move goods across the country, and have ‘skin in the game’ because they’re taking on pricing and risk commitments with each load. 4PLs manage a company’s entire supply chain, also taking on that consultative

role while managing other logistics providers,” he adds. Another difference between a 3PL and a 4PL is the shipper relationship and how it integrates into a more national or global strategy across all facets of the supply chain. “Typically, a 3PL provides the asset-based services to the 4PL and the 4PL integrates that data into a broader service and technological solution for the shipper. The value of the 4PL relationship is consistency across the shipper’s supply chain within the areas of communication, technology, reporting and integrated relationship management across key areas across the shipper’s supply chain,” says Marc Lebovitz, president of Romark Logistics. At the end of the day though, all third-party logistics companies are 3PLs. “A 3PL becomes a 4PL, also known as a lead logistics provider (LLP), when it engages and manages other logistics parties, resources or technologies to enhance its service offerings with increased capacity, expanded geographic reach or to provide additional capabilities as part of a total solution,” says Darin Cooprider, vice president consumer packaged goods for Ryder System, Inc. “For the food and beverage industry, which experiences seasonal peaks and troughs at different times of the year, the value in the 3PL/4PL transportation relationship is in having a single logistics provider that can oversee and manage all aspects of the supply chain. That includes executing transactional business in some geographies or lanes, leveraging capacity and resources of common carriers when available and cost-effective and then integrating the entire network under a single transaction-management and visibility toolset complete with business intelligence tools to inform decision-making.” Plus, 3PLs excel in providing multiple service offerings, leveraging technology and expertise to create value for shippers that want

 3PLs and 4PLs that come out of the COVID19 pandemic stronger than before have a great future.

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COVER STORY

 The vast majority— over 80% of goods in America— move by truck today and will continue to do so in the future.

continued

to focus on their core business, adds Matt Parry, senior vice president of logistics for Werner Enterprises Inc. “[3PLs] are able to leverage scale to create a nimble, technologically enabled supply chain supported by industry expertise, which many shippers just can’t do on their own,” he says. “Services range widely throughout the 3PL market, but always include core execution function of shipments and often add back-office and compliance functions. Typically, 4PLs are most prevalent in large, complex global supply chains. They create value by coordinating the best service providers (direct and via 3PLs) into a single technology platform with sophisticated information management and modeling capabilities. A 4PL often oversees more management functions for the customer, including back-office functions, product sourcing, budgeting and distribution services across a variety of channels. A 4PL can provide more sustainable cost savings over time with its diverse network of internal and external stakeholders, however, they are often less nimble creating risk in rapidly changing market conditions.” Meanwhile, 5PL is a newer concept that focuses on the management RK Logistics of supply chain networks, not just supply chains, says Jack Gerstner, vice president, collaborative transportation management for Coyote Logistics. “Often linked to e-commerce, 5PL solutions would incorporate

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the management of a network of logistics providers on behalf of one or more customers,” Gerstner says. However, others in the industry see no difference between a 3PL, 4PL and 5PL. “From a service provider perspective, there really is no difference. It just describes the relationship between the members and partners in your supply chain,” says Rock Magnan, president, RK Logistics Group. “A company can be a 3PL and a 4PL at the same time. Most companies consider themselves 3PLs. It’s just a hierarchy, a way to define where in the service mix the participant resides. I’m a warehouse operator filling orders for a customer and then selecting a transportation provider to deliver that order. In this case, I’m both—a 3PL providing warehousing services for the owner of the freight, and a 4PL subcontracting with an independent trucking company for transportation services to deliver the order.”

Making the transition While there are several similarities and differences between a 3PL and 4PL, there are some providers making the transition to become one over the other, even if it’s a short-term solution to a customer’s problem. “For a shipper, the transition from a 3PL to a 4PL normally comes from a desire to tie into an integrated national or global ecosystem. With this move comes a great degree of trust and mutual benefit, as the relationship becomes part of the shipper’s overall strategy to increase visibility and cost savings,” says Lebovitz. “From our experience, a 5PL relationship is often linked to a provider who manages multiple relationships with a strong competency in e-commerce logistics support. These providers are focused on a supply network whereas a 3PL/4PL are more focused on a supply chain.” A 3PL would also cross into 4PL

territory when it begins accepting business from a broker rather than working directly with a customer. “This could happen for a number of reasons, but is often predicated on helping other regional logistics businesses virtually expand their footprint, participating in a program that gives a the customer a national solution made up of regional service providers, managed by a primary 3PL or 5PL,” says Miller. “A 3PL may also transition to a 4PL on short notice to accommodate local overflow of competitive or collaborative warehouses. Having technology to support visibility across both the 3PL and 4PLs that they manage is critical for a seamless experience to producers, grocers, retailers and other parties in the supply chain.” When looking at your own supply chain and how to improve it, Wolf advises going back to the basics. “Suppliers, shippers, 3PLs—everyone should fulfill their commitments. If you are working with a partner who can’t deliver on their promises, why are you working with them?” she adds. “A 3PL can transition into a 4PL when a company outsources all supply chain responsibilities to their 3PL, and then that 3PL leverages others 3PLs to complement their service offerings. The original 3PL has essentially become a 4PL because it is still being held accountable to the company that originally outsourced supply chain responsibilities.” One is not necessarily better or worse, according to Geoff Kelley, president of Nolan Transportation Group. “It really depends on the complexity of the shipper and their needs,” he adds. “If the 3PL’s capabilities don’t address the full supply chain needs of the shipper, a 4PL can provide a more comprehensive solution to the customer with a portfolio of logistics providers.”

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Technology takes 3PLs to a new level It’s hard to have a discussion about 3PLs and 4PLs without talking about technology, says Abtin Hamidi, chief executive officer at Torch 3PL. “Initially, the pandemic exposed the strengths and weaknesses of the technology infrastructures. The ones with most modernized platforms were able to navigate the unexpected challenges with more ease. The ones with outdated platforms are not surviving. Surprisingly, we also learned about the importance of having a strong culture of trust both internally and with our clients,” he adds. “There’s been an important trend in which companies are narrowing their focus on the specific product they produce and outsourcing other non-core business functions. For example, several health beverage companies have relocated their resources to create a better product, and outsourced other functions of their business such as transportation and supply chain.” [Go to www. foodlogistics.com/21128755 to learn more about how 3PLs will remain an integral part of the distribution process for functional beverage brands]. One technology designed to improve the 3PL and 4PL experience are application programming interface (API) platforms. “API connectivity is a great way to share information across the entire supply chain in more or less real-time. It helps link point solutions and connects suppliers and their 3PLs to the complete supply chain,” says Miller. “Warehouses taking advantage of paperless warehousing and mobile scanning technology are able to not only validate activities, reducing mistakes, but also onboard new warehouse employees quickly and record user KPIs and productivity metrics. These metrics can

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then be layered into business intelligence tools that allow 3PLs and their customers to benchmark, iterate and improve their operations, inventory distribution, lane

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negotiations and more. Collecting and combining these metrics from systems across the supply chain allow for 3PLs and their customers to make better business decisions. Leveraging business intelligence to share highly visual performance dashboards can also help 3PLs monitor, achieve and exceed service level agreements.” Other solutions entail on-demand freight quoting and shipping, real-time load tracking and visibility, procurement solutions, network optimization and load consolidation technologies. “In the past, non-asset-based transportation capacity provided shippers the ability to be flexible in different economic environments. Now it applies to other services, as well. For example, the current climate shows how the inherent flexibility and transparency in a managed [transportation management system] model can create tremendous value—both in the ability to recalibrate processes and procurement strategies quickly as the market changes, as well as the variable-cost nature of many billing models. Contracts that are designed to flex with the

shippers’ needs in either direction work well in a recessionary environment, and can create a lot of competitive advantage for those that have chosen to outsource some portion of their TMS capabilities in this fashion. Furthermore, those that can promise rapid implementation and be fully self-funded in Year 1 tend to work the best,” says Gerstner. For its part, Ryder introduced RyderShare, a one-of-a-kind collaborative logistics platform that enables everyone involved in moving goods through supply chains, including shippers, receivers, carriers and service providers to work together in real-time to prevent costly delays and find efficiency gains. “Everyone talks about visibility, about being able to see where your goods are, but that’s just the beginning,” says Cooprider. “For visibility to be meaningful, it must be in real-time, not in 10- to 15-minute increments, so you know exactly when your goods will arrive, if there are potential delays and the ability to collaborate and take action in real-time. Without that, you’re just tracking a truck on a map.” Kenco opened a dedicated physical warehouse space, an

 Ryder’s new RyderShare logistics platform enables everyone involved in moving goods through supply chains to work together in real-time.

WMS, TMS, ERP and equipment suppliers are refreshing their capabilities to align with the ever-changing expectations set forth by shippers, their customers and warehouse, packaging and transportation providers.

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COVER STORY

 When it comes to relationships with partners, communication is key.

continued

expansion of the Supply Chain Innovation Lab, to serve as a true test facility for its team of innovation specialists to assess value-added technology and provide advanced visibility into these solutions. “From autonomous drones to advanced vision-picking goggles, there is a lot of new technologies being deployed and in development that will aid in maintaining and enhancing efficiency and safety in the supply chain,” says Saxena. “New technologies allow for quicker decisions to be made and the turnaround process to be virtually seamless. Artificial intelligence (AI) and machine learning (ML) are making waves in the industry by providing amplified data management capabilities allowing for increased visibility. Through advanced AI and ML data analytics solutions, logistics providers can collect, manage, analyze and utilize data to provide solutions and decision support. With these tools comes predictive analytics, as technology continues to develop data that can provide users with predictive and prescriptive analytics for areas like volume forecasting, inventory deployment, equipment maintenance and labor planning. For the food and beverage sector specifically, analytic technologies are also useful in meeting different regulations. Additionally, connected Internet of Things (IoT) solutions utilizing AI and ML allow for remote monitoring and control.” Meanwhile, warehouse management systems (WMS), trans-

portation management systems (TMS), enterprise resource planning (ERP) and equipment suppliers are refreshing their capabilities to better align with the ever-changing expectations of shippers, customers and warehouse, packaging and transportation providers. “These enhancements look to use analytics and data to drive efficiency and cost reductions throughout the supply chain,” says Lebovitz. “Material handling and production equipment manufacturers are implementing automation throughout their offerings to create a more efficient and safe approach to everyday tasks. This coupled with constraints and limitation within the labor market are creating stronger ROI evaluations, which enable these enhancements to be viewed in a positive light.” Advances in digital technology and automation are also arming logistics leaders with the tools needed to fortify supply chain strategies. “A growing array of remote sensors linked to the Industrial Internet of Things (IIoT) are available to monitor temperature, shipment location, transit time and other metrics during transportation to prevent spoilage or contamination,” says Commiskey. “Drones and sensors also are being used to inspect farms and warehouses to meet company and government standards. Robotic process automation (RPA) has made it possible for 3PLs and 4PLs to regularly pull critical industry information and statistics, which has become increasingly critical during the pandemic to share real-time updates with customers and inform strategy. Tech-enabled 3PLs and 4PLs are building these features into their TMS.” “All of these technologies have made it possible for food shippers to not only have visibility into every detail of their supply chain, but to also mine data that can optimize their networks and strategy in the

future. As the country collectively seeks to return to this New Normal, leveraging data on-hand and staying on top of new insights can make or break the success of a company’s supply chain strategy,” he adds. Likewise, electronic logging devices (ELD) help increase handsfree communication, while digital freight matching, dynamic route optimization and load stacking help reduce overall miles and empty miles, resulting in improved efficiency, sustainability and safety, says Kelley. “Much of this is facilitated by the adaption of IoT devices and improved tracking/visibility. IoT and geofencing also allow for participants to know when a truck has arrived on property, potentially reducing detention and dwell times,” he adds. The 3PL, 4PL and 5PL sector is also experiencing continued exploration of the use of blockchain across the logistics industry. “Blockchain was an emerging technology five years ago, but adoption was limited until recently when we’ve observed a resurgence of legitimate use cases where blockchain or similar technology can make a safety and optimization impact to the industry,” says Parry. “Some examples include the ability to manage cold chain and distribute vehicle, equipment or carrier data to interested parties safely and securely. The technology can ensure that logistics participants track and actively comply with existing and new laws and regulations and can safely report violations. Improved visibility of freight and its transportation across shippers, carriers and any third parties in between.”

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The future for 3PLs Partnering with a 3PL or 4PL is critical when market conditions are uncertain, says Commiskey, “because they are able to provide nimble solutions that align with business goals. It’s important to

Arrive Logistics

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consider factors like scale and technology when choosing a partner, but logistics remains a relationship-driven business—without the right relationships with carriers and other industry stakeholders, logistics leaders won’t see the results they’re seeking.” And, by nature, logistics providers are managers of multiple resources, adds Magnan. “Some they own, some they contract out. For the shipper, the desire is to have one responsible, overriding party—one ‘throat to choke,’ if you will. I may give that firm a contract to manage my logistics worldwide,” says Magnan. “That relationship could be either a 3PL or 4PL. Basically, I’m relying on my 3PL/4PL to be the expert in supply chain management, rather than having an inside team do that.” Plus, the COVID-19 pandemic came at a time when tariffs posed

additional complexity. “The global supply chain was out of sequence from both events happening together and different parts of the globe quarantining and being affected at different times with very different magnitudes of disruption,” says Lebovitz. “The global supply chain was able to deal with these interruptions skillfully, and thanks to some additional inventory measures many had in place, there was a good head start in overcoming major supply disruptions.” Harnessing the power of data will drive innovation and improvements in execution for both 3PLs and 4PLs. “COVID-19 has exposed many gaps in shippers’ supply chains,” says Joe Carlier, senior vice president of global sales, Penske Logistics. “Consumer behavior has shifted, and it is more critical than ever before to have the ability to

quickly adapt to the New Normal. With all the uncertainties that are in front of us, shippers will need strong partnerships with proven capabilities in engineering, technology as well as execution.” The challenge post-COVID-19

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 Harnessing the power of data will drive innovation and improvements in execution for both 3PLs and 4PLs.

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JULY 2020 | FOOD LOGISTICS

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2020 Educational Webinar Series STAY ON TOP OF THE LATEST TRENDS AND BEST PRACTICES IN THE GLOBAL FOOD AND BEVERAGE SUPPLY CHAIN.

October 14

Warehouse Automation

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Warehouse automation continues to transform the supply chain and logistics industry. From forecasting and inventory refill to visibility and end-to-end traceability, today’s warehouse solutions are designed to improve the way companies track and trace product. But, how else do these solutions optimize the warehouse? Discover how warehouse automation helps boost companies to the next level.

December 2

The Future of Food Supply Chains / Executive Outlook Automation, robotics and Internet of Things remain hot topics going into 2021. But, how do things like a global pandemic transform the way these trends are implemented? What are companies doing differently to mitigate risks and better protect their people, product and planet? This industry outlook details what the future supply chain looks like, and how cutting-edge technologies help companies better prepare for what’s to come.

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won’t be so much the way product moves through the supply chain as it will be keeping up with accelerated consumer demand. “The challenge for food and beverage shippers continues to be how to support e-commerce fulfillment and final-mile services cost-effectively, and it is unlikely that the future will be a one-size-fits-all strategy,” says Cooprider. “In fact, I believe that the future will belong to those shippers who can most effectively embrace complexity within their supply chains and manage that complexity seamlessly and cost-effectively.” It would be an understatement to say that the COVID-19 pandemic has disrupted supply chains for the foreseeable future, continues Commiskey. “The second quarter saw demand to transport goods plummet amid steep declines in business and world trade,” he adds. “For a supply chain strategy to remain resilient, especially amid unprecedented market conditions, it’s critical that 3PLs and

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4PLs have deep carrier and industry relationships in place. In crisis situations, constant communications are crucial, as they keep a partnership between a shipper and their 3PL strong while mitigating the impact of disruptions.” COVID-19 has also caused a fundamental disconnect in supply chains focused on moving food. “The traditional commercial, government and industrial food markets where these products would normally go have dried up. The normal supply chains and end-users who were the recipients of these goods are closed or operating at a fraction of previous capacity. It’s not that farmers have over-produced; it’s just that the supply chains [that] served traditional large consumers—government food programs, restaurants, industrial kitchen operations such as schools and college dorms, as well as large event venues like stadiums and ballparks—were disrupted. These markets went silent overnight,” says Magnan. “Exacerbating the problem

is how goods in these supply chains were labeled, branded, packaged and shipped. Most of these deliveries were in large bulk quantities or millions of small quantities, such as individual serving milk cartons for school lunch programs that could not be transitioned for retail grocery sale. The supply chains could not pivot , and still cannot. It’s not necessarily a problem of not enough food, or where food is sourced geographically. It’s more an issue of sector disruption and the inability to redirect and repackage those food consumables to flow through an alternate supply chain structure. That presents a real opportunity as we come out of the pandemic, for farmers and the firms to think about how to re-engineer supply chains to be more flexible and resilient, from farming methods to production to packaging, labeling, distribution and consumption. And, be prepared for when schools and other organizations that feed millions start to ramp back up.”

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3PL & REFRIGERATED LOGISTICS BY BRIELLE JAEKEL, ASSOCIATE EDITOR

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echnological solutions and data are now more apparent throughout the cold chain, especially within third-party logistics (3PL) organizations. Food Logistics’ June 2020 issue detailed the variety of new applications designed to modernize the 3PL experience. But more than just software goes into updating operations. Along with new apps and solutions, 3PLs are updating the very infrastructure that makes the transportation of cold food possible. Right now, sustainability and the need to streamline operations drives innovation in infrastructure, pushing automation, electric-powered equipment, new ways of refrigeration and data acquisition and implementation. Regulations for sustainability continue to grow, prompting 3PLs to turn their businesses toward more ecofriendly operations by implementing battery-powered or hybrid vehicles and heavy lifting equipment in addition to energy usage within facilities. “Infrastructure in the cold chain has continued to evolve over the years,” says Lowell Randel, vice president, government and legal affairs at Global Cold Chain Alliance (GCCA). “This applies to both facility

infrastructure and transportation infrastructure. In both cases, the need for increased efficiency, sustainability and data have driven innovation. Energy is one of the largest costs for warehouses, so the adoption of best practices and new technologies has become a high priority for many of our members. GCCA has recently developed an Energy Excellence Program to recognize facilities for their achievements in increasing energy efficiency. [Check out Food Logistics’ June 2020 issue to learn more]. “For transportation, we are seeing a move toward more use of electric hybrid transportation refrigeration units (TRUs). This is particularly true in California, where state regulators are moving to require hybrid units to reduce emissions. This is creating a shift in infrastructure among trucks and trailers, as well as requiring infrastructure changes at facilities that need to have the ability to accept plug-ins,” adds Randel. “We are also seeing the use of solar energy in both transportation and facilities. Some facilities have opted to install solar panels on their roofs to generate power either for the facility or for sale back into the grid. While costs of

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 Temperature control in the cold chain is an important factor of infrastructure.

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 Even warehouse infrastructure has updated with the growth of technology.

the technology are coming down, we see much of the application of this technology in states that offer strong incentives to adopt solar technology.” In addition to hybrids and the use of solar, cold chain 3PLs also use fuel cells, battery storage, battery technology like lithium-ion, lighting, variable frequency drives (VFDS) and ECM motors for sustainability. Some examples of sustainable practices in the 3PL space include Carrier Transicold’s new solar-power system for trailer refrigeration. Odyssey Logistics & Technology added natural gas tractors to its fleet. And, Port of Long Beach is testing zero-emissions equipment at two of its terminals. Associations also offer incentives to urge 3PLs to pivot to sustainable practices. For instance, the North American Sustainable Refrigeration Council released a new incentives program for natural refrigerants.

Automating the 3PL In addition to sustainability practices, 3PLs also look for ways to help drive efficiency to support their bottom line and satisfy customers. With so much technology to ease many tedious and tiresome

processes in the workplace, automation has become a major tool for 3PLs looking toward the future. “Automation technologies have evolved significantly in recent years, and more companies are finding automation as a viable option for their operations,” adds Randel. “We are beginning to see an increase in the construction of new, fully automated facilities in the United States (much like those that are more prevalent in Europe) as well as an increase in the integration of automation technologies into existing more ‘conventional’ facilities. GCCA published an Industry Trends Report in February that highlighted automation as a priority area for the industry. This was reinforced by a recent survey on the impacts of COVID-19 on the cold chain industry where 41% of respondents indicated that they were more likely to invest in automation as a result of the COVID-19 pandemic (58% indicated no change to current plans for automation).” Many of today’s technology providers create solutions and equipment that automate the warehouse and logistics process with artificial intelligence (AI)-enabled robots and robotics systems to take the burden off of human workers. For example, Vecna Robotics partnered with UniCarriers Americas (UCA) to develop a line of autonomous material handling vehicles for warehouses, distribution centers and manufacturing environments. Kyron created ConsoleX, a web-based management and monitoring dashboard that lets users config-

ure, schedule and manage virtual workforces comprised of its robots from any location in real time. Universal Robots released numerous new technologies, such as a Quick Deployment Kit to scale for parcel induction, case packing and goods-to-person tasks. The robotics company also revealed Cross Palletron, a solution that utilizes the UR10e cobot to create a collaborative and mobile palletizer and de-palletizer and its new RightPick2 platform featuring an intelligent gripper, a vision system, control software and a UR5e cobot. Also, Prime Robotics launched Auto Shelf, a warehouse robotics platform with a patented design that integrates the robot into every shelf. “The Auto Shelf will change how inventory is handled,” Eric Rongley, founder and CEO of Prime Robotics, said in a statement. “Prime Robotics has created a new robotics platform and patented all aspects of warehouse and other use cases. Large customers can deploy the system with confidence that not only do they have the most efficient warehouse robot system, but that the intellectual property of the robot is clean.” 3PLs leverage these systems to speed up their processes and make operations more efficient. These automated solutions also handle pallet loading, sorting, in-warehouse transportation and more. While autonomous driving solutions are often talked about, there is little evidence of driverless technology showing up in the infrastructure of 3PL fleets. However, it is likely that if driverless vehicles become more commonplace, they could drastically improve efficiency in 3PLs and assist if a driver shortage is to become prominent again.

The refrigeration factor 3PLs in all sectors invest in automation and sustainability, but the cold chain has to consider refrigeration.

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New technologies in refrigeration infrastructure push innovation in the transportation of fresh food in order to keep foods fresher for longer while reducing energy. “Industrial refrigeration systems are another area where we are seeing innovation,” says Randel. “The majority of refrigerated warehouses utilize large, central ammonia refrigeration systems to meet their temperature-control needs. However, over the last several years, we have seen the development of new refrigeration systems that are now being considered for new facilities that provide an alternative to large charge systems that are subject to certain regulatory requirements. These new technologies include small charge ammonia systems, transcritical CO2 systems, ammonia/CO2 cascade systems, all of which utilize natural refrigerants that do not contribute to ozone depletion or global warming potential.” New ways of refrigeration help reduce the threat of climate change, but other technologies in reefer units can help 3PLs better manage food delivery. In addition to oxygen level technology to keep food fresh, these units are often equipped with sophisticated sensors that take the guesswork out of monitoring temperature. While most companies in the 3PL sector have dealt with the driver shortage within the last decade, the refrigeration factor in the cold chain compounds this even more, as it requires advanced skills, training and knowledge to transport perishables. The more user-friendly technology is in this sector, the easier it

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others. Good brokers can filter through all the visibility tracking choices and partner with the best technologies that help their carriers and customers. When it comes to booking freight, only a few companies have effective platforms that make booking transactional freight easy and with minimal administrative burden for carriers. It’s important to think about your needs/goals when partnering with technology providers and brokers and ask lots of questions.” For its part, FourKites released a visibility solution the offers greater accuracy, from pre-pickup to delivery for lessthan-truckloads, UST Global partnered with Gravity Supply Chain Solutions to develop an integrated end-to-end supply chain visibility digital platform for their clients. And, Loadsmart launched Multimodal Services, bridging port drayage, transload and over-theroad truckload shipping, exhibiting full transparency across the entire lifecycle. Warehouse management system (WMS) and transportation management systems (TMS) have also adopted these features to provide a better source of data for 3PLs. “Information technology also plays a critical role in the success of cold chain facilities and transportation,” says Randel. “Warehouse management systems and transportation management systems are becoming stronger and more robust to provide cold chain companies with the data and information they need to optimize operations. The availability, quantity and quality of data is very important to our memArrive Logistics

 Trucks in the cold chain feature new technologies.

is to onboard new employees. “Driver shortages impact the cold chain to a greater extent because delivering refrigerated freight requires additional training and has greater liability and higher capital investment,” says Darlene Wolf, senior vice president of the strategic partners division at Arrive Logistics. “Refrigerated freight is more inclined to closer inspections. Therefore, thorough planning and communication between the shipper and 3PLs are critical to set each other up for success.”

Data moves freight along With these technologically advanced systems comes a heaping amount of data. This can help in a variety of ways such as visibility with partners as well as planning an effective strategy. “Overall, there is an increased demand for transparency and visibility in all aspects of the supply chain. but especially in the food and beverage industry,” Wolf continues. “There is a huge array of visibility technologies available, including mobile GPS, ELD, blockchain and

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bers. In addition to WMS and TMS services, the further development and application of blockchain technology can help strengthen supply chains in the future.”

COVID-19 adds another level Advanced visibility is always helpful with third-party cold chain logistics, but with the recent Coronavirus disease (COVID-19) pandemic, these solutions are even more important. Added regulations, restaurant closures, grocery restrictions and general lack of labor due to illnesses have caused great pains in the perishables supply chain. These products have a short span of time for delivery before spoilage, even with growing technologies to help prevent this and many dairy farmers dumping their milk supplies. This makes technological visibility solutions that are tied into infrastructure more important than ever. “Due to the shutdown of schools, restaurants and other large-scale foodservice customers, much of that product is now being diverted to other markets such as food banks, direct-to-consumer and grocery stores,” says Jon Samson, executive director of Agricultural and Food Transporters Conference at American Trucking Association. “However, the mass quantity packaging has hindered that effort. In addition to the foodservice industry, fresh products are also struggling to find a home. A great deal of produce that was bound for similar markets has now been left to find an alternative market. These products are particularly impacted due to their perishable nature. Products like milk and produce

that were meant for schools and restaurants are now being diverted to direct sales, food banks or are being dumped or tossed out because they simply can’t find that alternate market. “There are significant gaps in diverting products, specifically perishable, to a new market or consumer,” he continues. “We have run into two specific problems—the lack of connecting supply with demand quickly should something go wrong and having enough space and resources to break down large quantities into a more consumer-friendly package. Ultimately, we have found that we need more connectivity throughout the supply chain, practically making it a web. Understanding that the chain is usually sufficient, but if there is a hiccup then having the ability to branch off and reconnect in a timely manner is crucial during these time sensitive movements.” As the country begins to slowly re-open during pandemic, infrastructure in the 3PL space will be an extremely important part of the process. Those that have invested in modern, automated and sustainable equipment may have been and will be at an advantage to handle the “New Normal” that the supply chain has found itself in. Beyond COVID-19, new energy systems will help poise 3PL companies to be more compliant with sustainability regulations and incentives, while automation will grow efficiency and data can make decisions on what is best for the organization. 3PLs will continue to invest in advanced equipment, thus further driving the sector forward.

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SECTOR REPORTS

WAREHOUSING store and distribution center levels, efﬁciencies must be built upstream. Order management automation can streamline the entire supply chain to avoid costly mistakes and reduce expenses for suppliers as well as the retailers they service. Moreover, well-designed automated systems break open data silos for increased transparency that enables ﬂexibility and the ability to quickly identify and correct errors.

T Steve Smith U.S. COO, Esker

To prevent bottlenecks at the store and distribution center levels, efficiencies must be built upstream.

he rise of mobile technology, and its nearly universal adoption, have been instrumental to the development of the hyper-connected Internet of Things (IoT). As such, it has also changed consumer behaviors. Not only do shoppers demand greater convenience, but they also want to make better-informed buying decisions. Thus, they expect brands to be increasingly transparent about how they source, manufacture and otherwise bring their products to market. For example, consumers are increasingly sensitive to how food production and distribution affect the environment. Cross-country shipping, the use of plastics in packaging, the waste inherent in the desire for cosmetically “perfect” produce and the widespread use of chemicals to increase production has brought calls for a more humane and sustainable food supply chain. Yet, the demand for locally sourced or organic ingredients can present challenges for suppliers that rely heavily on manual processes. To prevent bottlenecks at the

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Using automation to avoid errors The perishable nature of products makes the food and beverage industry particularly sensitive to order processing errors. Leveraging technology to ensure accuracy, offering real-time order veriﬁcation and responding quickly to external factors such as recalls and weather-related surges in demand will reduce or eliminate the number of incorrect or lost shipments, delays and returns. Manual order entry is labor-intensive. Customer service representatives (CSRs) must manually enter orders received in multiple

forms (e.g., phone calls, faxes, emails, etc.). This tedious, repetitive work is prone to human error. Worse, mistakes may not become apparent until an order is ﬁlled, shipped or received.

Manual processes also perpetuate the less-than-optimal utilization of human resources. Personnel can offer more than typing and ﬁling skills to an organization. Automating order management relieves employees of menial clerical tasks and allows them to be reassigned to more valuable and fulﬁlling work.

Using automation for self-service Self-service is another value-added feature of most automated sales order processing systems. Buyers may submit orders via EDI, fax, email, online portal or mobile device and save everyone valuable time. They can then track their own orders, reducing the need to interact with a CSR. Utilizing types of artiﬁcial intelligence (AI) such as machine learning, these systems can also standardize order forms and formats to accommodate customer preferences. Perhaps ironically, automation can be the key to offering a more personalized user experience. However, whether you are a supplier or a grocery chain operator, no system is worth the investment unless it can scale. The most effective automated order management systems allow stores with multiple locations to view data for their entire enterprise from one central hub. Once orders are

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placed, they are routed to the appropriate workflow path. Incoming electronic data interchange (EDI) orders that have incorrect or incomplete information convert to a readable form and are tagged for CSR verification. Once verified, orders may be uploaded to the organization’s enterprise resource planning (ERP) system. The benefits of automation—or human augmentation—are hard to ignore. Eliminating manual data entry reduces both errors and the waste of both time and consumables associated with paper-based, manual ordering systems. Transparency allows for quicker identification and resolution of errors. Relieved of the need to perform time-consuming, low-value tasks, CSRs are able to provide improved service and build stronger relationships with customers. It is a win-win, as employees enjoy greater job satisfaction while creating a better experience for customers.

Using automation in practice The proof is in the numbers. Delicato Family Vineyards, for example, implemented automated order processing in order to provide more value-added services to its customers. Within a year of implementing an automated order management solution, 95% of Delicato’s orders were processed electronically. Automation also resulted in increased accuracy and orders being processed 60% faster But, order management is just one part of the order-to-cash (O2C) cycle. Companies that automate pro-

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cesses throughout the entire O2C entry jobs, but is unlikely to render cycle—credit management, order human employees obsolete. management, fulfillment, billing, Consumers expect convenience, collections, deductions and but they also want fresh, wholedispute management and some food that is locally and the way to cash applicasustainably produced. tion—usually see the In such a business climate, small biggest benefit from and mid-size regional suppliers are this technology. essential. However, they need to The goals of impleoperate efficiently to stay competmenting automation itive. tools across the cycle Technology that automates order should be increased opermanagement exists today and can ational efficiency, improved provide an immediate lift in this customer experience, greater regard. agility as a business and—ultimateWith its ability to streamline oply—higher profits. erations, ensure data accuracy (and The advanced functionality of security), expand profit margins these systems, coupled with excepand meet the demands of today’s tional UI/UX, play a significant role hyper-connected, socially conscious in surfacing the most relevant data shoppers, automation represents for suppliers and their buyers. the new table stakes in the food and Dashboards may be customized beverage industry. to meet the unique information needs of each department and can provide the data necessary for creating actionable reports to inform decision-making. WIRE Particularly robust systems offer real-time updates, thus empowering managers, executives and directors to track operations as internally CHROME implemented changes or Bright, external market forces exert attractive finish influence over processes and procedures.

Automation: The new table stakes Nevertheless, anxiety continues to surround the topic of automation, cast as the next big economic disruptor, akin to the Industrial Revolution. Yet a McKinsey Global Institute report concludes that increases in productivity driven by the new technology will boost economic growth. Automation will eliminate many repetitive data

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SECTOR REPORTS

TRANSPORTATION

HOW COVID-19 ACCELERATED TRANSPORTATION POLICY CHANGE

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M Thomas Madrecki V-P., supply chain and logistics, Consumer Brands Association

Safety, efficiency, traceability and visibility will play a key role in the future of supply chain regulation.

uch has been written about the impact of the Coronavirus disease (COVID-19) on global supply chains and the extent to which the pandemic stoked panic buying of essential products. Faced with huge swings in consumer demand, consumer packaged goods (CPG) manufacturers, carriers and retailers had to pivot overnight, all while adapting to the “New Normal” of health and safety precautions, new processes and shifting regulations. Predicting the future is never a sure thing, but some of the temporary policy measures during the COVID-19 crisis, together with recent innovations and technologies adopted by the industry, point toward areas ripe for regulatory reform and reﬁnement.

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The pandemic exposed new opportunities for safe, common-sense solutions that would safely and effectively strengthen America’s supply chain for years to come: In response to increased demand during the pandemic, the Federal Motor Carrier Safety Administration (FMCSA) rolled out a ﬁnalized rule for enhanced trucking hours-of-service ﬂexibilities and suspended hours-of-service rules for qualifying deliveries. Individual states also temporarily increased truck weight limits, effectively demonstrating those trucks’ ability to operate safely nationwide. Together, these changes greatly helped to moderate available trucking capacity and ensure the safe, timely movement of goods during a time of national need. If made permanent, these

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actions could bolster supply chain competitiveness and streamline operations across a myriad industries. Additionally, FMSCA listened to input from shippers, carriers and retailers about the need for added flexibilities for license renewals, vehicle registrations, drug and alcohol testing and many other day-to-day business issues that grew increasingly complicated as state DMVs shut down or suspended normal hours of operation. The

impact on the movement of goods and services. Potential changes, like a national truck weight limit increase, or even the creation of a data collection pilot, are essential to strengthening the supply chain. Pre-COVID-19, the Department of Transportation restarted its national freight strategic planning process, which has been in the works for years. It is imperative that this plan not only gets finished, but is also effective

practices. In prompting additional conversations around health and safety—and in encouraging shippers, carriers and retailers to rethink transportation processes with the aid of technology—COVID-19 seems likely to spur regulation and policymaking tied to information sharing, electronic transactions and chain of custody. Industry efforts, such as the Consumer Brands Association’s Contactless Delivery Task Force,

pandemic exposed the degree to which these activities could be made electronic and more uniform across states. Taken together with broader trends toward telework, there is opportunity both at the state and national level to simplify and standardize processes. While government transportation officials primarily sought to ensure access to capacity, industry efforts throughout the COVID-19 crisis emphasized the need for efficiency, safety and visibility throughout the supply chain. Legislation, especially a transportation reauthorization package, stands to have the most significant

and results in meaningful change. The CPG industry has and will continue to emphasize the importance of efficiency, safety and visibility within its supply chain. Progress continues to be made in response to other regulations like the FDA’s Food Safety Modernization Act and the European Union’s guidelines on Good Distribution Practice for medicinal products. Moving forward, technology and information-sharing will underpin safety and traceability regulation, thus impacting goods transportation practices and requirements. The shift from traditional retail to e-commerce during the pandemic poses additional regulatory and liability questions that remain unresolved, especially as it pertains to food safety and potential illness. It’s the last point that stands to perhaps most significantly shape future regulation and business

are rooted in evolving conversations about how to document each step in the supply chain. The interplay between blockchain/ distributed ledger, cold chain and delivery transaction technology will have significant implications in the years ahead, sometimes making it easier to do business, while in other cases requiring additional levels of compliance and risk mitigation. It’s clear that in a post-COVID-19 world, the need to monitor and record shipments is only going to grow more complex. The Coronavirus outbreak exposed supply chain shortcomings, but it also provided a roadmap for future policy-making and industry investment. These anticipated changes may be less surprising than the pandemic itself, but will have a similarly outsized impact on transportation and logistics in the years ahead.

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SECTOR REPORTS SOFTWARE & TECHNOLOGY BY MACKENNA MORALEZ, WEB EDITOR

Int is e the tec ad

INTEROPERABILITY BEGINS WITH

TEMPERATURE MONITORING SYSTEMS

As the demand for online groceries grows, companies look for the right technology to help ensure safety.

hen Amazon bought Whole Foods in 2017, it shook the entire grocery industry. Up until then, the “Amazon Effect” had yet to hit the cold food and beverage sector, leaving many to wonder how the acquisition would impact grocery stores as we know it. Since, companies have moved forward with a variety of online grocery services, such as curbside pickup and delivery. Meanwhile, others invested in micro-fulﬁllment centers and revamped their web presence, offering deals exclusive to shopping online through their app or website in preparation for an e-commerce boom. “This is really about digital transformation. Most grocers are not digital marketers, but developing an online grocery delivery tool will require gaining expertise in designing a digital experience for their customers. This requires design thinking to understand the full customer lifecycle and being selective about what the grocer will own vs. what will be the responsibility of

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Interoperability is expected in the future as technologies advance.

Real-time monitoring and alerts in the food cold chain gives humans better data faster, so they can make decisions in a supply chain.

the partner,” says Scott Fletcher, president and CEO at LocatorX. In a 2018 report by Statista, online grocery shopping in the United States was predicted to more than double to $30 billion by 2021. The expected growth was largely driven by younger consumers more comfortable with shopping online. However, the Coronavirus disease (COVID-19) pandemic has made demand for online grocery shopping skyrocket over the last four months. According to a survey by Brick Meets Click/Symphony RetailAI, online grocery sales for curbside pickup and delivery in April, totaled $5.3 billion—a 37% increase over March sales. The increased demand for groceries put an expanded focus on food monitoring systems, as companies and consumers want their food to arrive to the store safely and on time. “Temperature monitoring is always important to ensure that products have been maintained at the correct temperature during transport or storage. During the COVID-19 pandemic, supply chains became disrupted, so product shipments could be unexpectedly delayed,” says Angela Kerr, vice president of product portfolio, SpotSee. “COVID-19 test samples are a good example where temperature monitoring is extremely important. These test samples are supposed to be refrigerated or frozen, and yet as labs were ﬂooded with samples, there was no place to properly store the samples. Temperature is known to negatively impact the viability of the sample, so poor temperature management could result in false negatives when testing for COVID-19.” Prior to the pandemic, there was a growing demand for systems that provide both temperature and shipping tracking information, Terry Nagy, engineering manager of CAS Dataloggers explains. Previously, companies used

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OneThird

RFID tags that incorporated a temperature data logger, allowing some tracing information to begin. However, there were difﬁculties in implementing the technology, as it required extra steps during the shipping process and integration into the existing RFID system wasn’t always possible. “Like other electronic devices, temperature-monitoring systems have been subject to the same trends, improved performance and accuracy at a price [that] continue to decline every year. But, I think the most signiﬁcant trend is the move toward cloud-based systems where the data is automatically sent to [the] server managed by the manufacturer that provides real-time data and alarming email, SMS or voice,” says Nagy. “These systems are very easy for the user to install and allow access to the data from mobile devices via vendor-provided applications or using a standard web browser.” The increased urgency for home delivery has largely driven the need for simplicity within the monitoring systems. For example, SpotSee’s WarmMark time-temperature indicator is a single window (go/no-go) device that allows customers to fully understand whether or not the product should be used or not. “Track-and-trace technologies

are driving temperature monitoring innovations. The pharmaceutical industry is marching toward database interoperability; food and beverage will likely move in a similar direction. As this becomes a reality, temperature is a logical addition to the database,” says Kerr. “There is work to be done, but database interoperability can ultimately lead to having a complete temperature record of a product from the moment it leaves a manufacturing facility until it is delivered to a consumer.” However, many temperature tracking systems are still not connected across the entire supply chain. Marco Snikkers, CEO and founder of OneThird, believes that technologies will work together sooner rather than later. Combining temperature and humidity data with other data sources will allow for more accurate quality predictions as well. Interoperability allows humans to have better data in real-time, so they can make decisions in a situation

Spotsee

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SR: SOFTWARE & TECHNOLOGY continued Online tracking platforms can give real-time updates on where food is and what temperature it is being transported.

CAS Data Loggers

Temperature monitoring for perishable items is quickly moving toward the model of the Internet of Things where the measurement devices provide nearreal-time data for temperature, humidity and in some cases, location across the entire supply chain.

where every minute counts. “Quality ﬂuctuations will be better understood by linking the data collected from farm to fork. Once linked, this data can be used in smart algorithms that can show the exact effects of external conditions on fresh produce throughout their journey and enables automated logistics that require no human intervention,” says Snikkers. For technology to be interoperable, data

The Cydiance Lorca data logger provides nearly real-time location data along with temperature logs.

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CAS Data Loggers

must be secure, unalterable and from a trusted source. If not, that information could potentially be deemed unsafe and not useable to an organization. “Interoperability of data is one area that seems likely. The work that is being done to link pharmaceutical data back to its source seems a likely path for food manufacturers to adopt. Increased use of real-time data during transport will allow food supply chain participants to pinpoint where issues are occurring and put in place solutions that will minimize or eliminate those issues,” says Kerr. Nagy explains that temperature monitoring systems for perishable items are quickly moving toward an Internet of Things model. The cost of this technology has signiﬁcantly dropped to a price point that is attainable for most customers. The affordability comes with beneﬁts such as

improved product quality, reduced shipping costs, optimized delivery schedules and reduced waste. “In general, customers want the data to be secure and they want secure access to it. The technologies to enable this are all currently available, and it’s really up to manufactures to follow best practices when designing and building the systems that move and display the data. This includes making sure that the CAS Data Loggers data is properly encrypted while in transit and ensuring that any access is password protected and relies on secure protocols such as [transport layer security] in the case of browser access,” says Nagy. Temperature-monitoring systems are needed for the future, especially as the COVID-19 pandemic continues. As more companies begin implementing these systems, future innovations will be easier to integrate. Real-time sensors and self-learning algorithms, for example, will enable logistical processes to further automate, but require the right ﬂexibility for a supply chain to actually act on these. “Most issues that we face in this industry can be solved through actionable data, and there will soon be data analysis for any aspect of moving perishable goods. Seeking out new technologies and applications to continually improve accessibility, actionability and accuracy is critical to maximizing the utility of any solution,” says Snikkers.

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7/10/20 11:31 AM

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SECTOR REPORTS

OCEAN PORTS & CARRIERS

THE IMPORTANCE OF

CARRIER RELATIONSHIPS E

ven during good times, strong ocean carrier relationships are vital in managing supply chain risks, costs and performance. But, they become even more important when Hans Bean chief commercial ofﬁcer disruptions like the Coronavirus North Carolina Ports (COVID-19) pandemic begin to develop. The disruptions caused by COVID-19 have forced many busiMaintaining nesses across the maritime industry to evaluate how they build and active, regular maintain relationships throughout relationships the supply chain. The importance of good forewith ocean casting and frequent and open comcarriers on munication with ocean carriers is an ongoing key. Carriers make decisions based basis is a best on bookings and projected cargo approach and volumes, and the more information best practice they have, the better decisions they can make around planning, such as to ensure communicating blank sailsupply chain ings if carriers deem them performance necessary. Good forecastand integrity. ing assists the

FOOD LOGISTICS | JULY 2020

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ocean carriers with the repositioning of equipment, thus ensuring the availability of specialized refrigerated equipment. Throughout these unprecedented times, this is even more important, as a supporting link in the supply chain may be disrupted by the Coronavirus. Normal equipment flows cannot be expected or taken for granted due to rationalized approaches to vessel and ocean carrier fleet management. Importers and exporters do not want to wait until disruption clouds gather to develop carrier relationships; by that time it’s too late. Solid working relationships with carriers around forecasting and performance should be a normal part of conducting business. Having strong carrier and supply chain partner relationships also allows for better contingency planning and modeling. With the cold food supply chain, the importance of relationships is magnified given the cargo sensitivity, the multiple partners and stakehold-

ers involved and the transportation requirements.

A ports’ perspective The ability to have those intimate discussions with beneﬁcial cargo owners (BCOs), ocean carriers and truckers regarding planning and visibility is critical, especially during a pandemic. These partnerships allow ports to adapt and support the BCO supply chains as well as their transportation partners in an ever-changing environment. Great relationships with carriers, cargo owners and their transportation partners have helped North Carolina Ports, for instance, manage through a variety of disruptions, including hurricanes and COVID-19, where schedule and capacity irregularities presented potential challenges for cold chain customers. With proper advanced planning, North Carolina Ports has been able to help customers consider their best options and maximize Wilmington, Del.’s gateway

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7/10/20 10:44 AM

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Strong relationships between carriers are crucial in order to prevent supply chain disruptions like COVID-19.

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potential while navigating a dynamic supply chain landscape. Another key component of maintaining and building relationships is visibility. The importance of technology and connectivity to provide near-real-time visibilities with all parties in the supply chain cannot be understated. This allows for adjustment as needed to ensure communication and delivery are seamless to an end customer. The port is a small part of an overall supply chain, but many times, a port is the missing link regarding increased visibility. Maintaining active, regular relationships with ocean carriers on an ongoing basis is a best approach and best practice to ensure supply chain performance and integrity. Disruptions will continue to be a part of international trade. Hopefully, recovery from COVID-19 is not far off, but in the meantime, planning for the next disruption and strengthening carrier relationships along the way should be business as usual.

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JULY 2020 | FOOD LOGISTICS

7/10/20 10:44 AM

FOOD (AND MORE) FOR THOUGHT

PANDEMIC HIGHLIGHTS WEAK LINKS IN THE SUPPLY CHAIN

T Kevin Kenny COO, Decernis, a Foodchain ID company

Human nature will likely continue to put profits before people.

The industry needs to take a closer look at crisis mitigation plans should a disruption of this magnitude happen again.

here’s nothing like a global pandemic and empty store shelves to highlight weak links in the food supply chain. For many, the start of 2020 was business as usual. A classic case of, “Why fix something that’s not De ce rnis broken?” Yet the industry is still dealing with one of the greatest challenges experienced in decades. While it is normal to experience limited supply chain disruptions in certain markets throughout the world, having the entire global supply chain shuttered is a vastly different scenario. In order to learn from the Coronavirus disease (COVID-19) pandemic, let’s look at the various elements interrupting normal food chain logistics. Labor is a critical factor. Despite all of the technology and methods of transportation and tracking, human capital is at the heart of logistics. The COVID-19 virus has impacted workers finally recognized as “essential.” From farm to table, we now see the value of migrants who work the fields, truckers who transport the goods, customs and port officials, restaurant and foodservice workers, as well as the rank-and-file grocery worker.

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The working conditions and health of these vital employees will likely be a stronger consideration going forward, especially if one considers the dearth of unprocessed foods such as meats, eggs, milk, fruits and vegetables caused by their absence. A new form of nationalism also plays a pivotal role. Even before COVID-19, numerous countries began a subtle form of “me-first” nationalism. Now, in the wake of critical personal protective equipment (PPE) and food supply shortages, countries are locking down borders and shutting down exports in an effort to sustain their own people. Several countries, including Cambodia, India, Kazakhstan, Russia, Serbia, and Ukraine, have halted the export of “key” commodities. However, human nature will likely continue to put profits before people. There has been a clear rise in profiteering, as key supplies are often diverted to more developed

countries that outbid and pay higher prices. As a result, food insecurity has become prevalent in smaller and poorer markets. Local, regional and global transportation logistics have been upended. Whether it’s a truck driver in India that suddenly finds it impossible to transport from one state to another due to permit issues or the grounding of passenger aircraft that account for the majority of air cargo volume, there is an unprecedented shortage of cargo capacity—meaning delays and dramatic short-term air freight price increases. In the medium and long term, entire supply chains need to be re-thought. The low cost of doing business in developing nations like China, India, Vietnam, and Thailand will now be weighed against obvious threats to supply chain stability. Furthermore, the health and well-being of these essential workers should be a greater consideration for those that rely on them. Also, greater redundancies may need to be in place. The recent trend toward large multinationals partnering with fewer providers may be reversed once the dust settles. Yet in light of the global nature of this pandemic, no backup supplier has been spared. Finally, there is no doubt that the industry needs to take a closer look at crisis mitigation plans should a disruption of this magnitude happen again. After all, it’s not a question of if, but when. Decernis

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7/10/20 10:39 AM

FOOD (AND MORE) FOR THOUGHT

IMPROVING

DEMAND FORECAST ACCURACY

DURING AND AFTER COVID-19

T Are Traasdahl, co-founder and CEO, Crisp

An established demand forecasting technology platform enables companies to more readily pivot in time of need.

Effective teamwork requires transparency of demand forecasting assumptions, inputs, methodology, outputs, accuracy, inventory and supplier capacity.

he Coronavirus disease (COVID-19) rocked the food industry with unprecedented consumer demand surges and shifts in buying channels. One lesson that was quickly learned was that most forecasting models simply couldn’t adapt fast enough to keep up, leaving shelves empty, consumers fuming and sales dropping. In response, some food suppliers and retailers made judgement calls together in real time to streamline SKUs, redirect inventory, bypass distribution centers and deliver direct to stores, redirecting products from foodservice to retail and other actions in an effort to meet demand where it exists. But, some food suppliers fared better, taking advantage of opportunities to sell more products while competitors battled out-ofstocks. These companies had one thing in common—an established demand forecasting technology platform and sales and operations planning (S&OP) processes in place, allowing them to more readily pivot. Beyond that, these companies also had a culture that enabled agility. After all, effective demand forecasting isn’t just about technology and algorithms. It’s also about teamwork, transparency and trust. These factors are critical in helping organizations efficiently navigate disruptions and support success in “normal” (or “New Normal”) times. A quick look at these attributes gives insight into success factors that any company can adopt.

essential to building consensus and creating an agile demand forecast and plan, especially during times of crisis. The companies better able to pivot during COVID-19 created an S&OP (or “war room”) session starting with a statistically sound forecast supported by facts and proven estimating techniques, unbiased by manual overrides, functional goals and perceptions. This ability to collaboratively agree on a singular baseline was more efficient (and likely to be accurate) than working from multiple spreadsheets and opinions. The following collaboration best practices are critical to improve demand forecast accuracy. Include many perspectives— sales, marketing, product management, procurement, transportation, production, human resources and finance, as well as external supply chain and trading partners. Clarify roles and responsibilities, define each step in the process and ensure all participants know their input is valuable and that the process itself is open to continuous

improvement. Clearly defined roles and responsibilities within a structured process and shared goals across departments encourages teamwork. Leverage each participant’s expertise and create a central archive (demand signal repository) to house relevant research and data. In addition to consumer demand signals, continually source, share and collectively learn from new demand data sources, especially during times of disruption. Feed market intelligence back into advanced statistical forecasting tools to improve their algorithms. Machines quickly learn from patterns, relationships and anomalies found in data. These everimproving models can rapidly create robust “what-if scenarios,” allowing the team to proactively consider multiple disruptions or risks to make decisions related to production schedules, inventory diversions, customer allocation strategies, alternative suppliers, etc. Human experience and judgement are still needed to set strategic direction, make decisions,

Teamwork Cross-functional dialogue is

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Crisp

JULY 2020 | FOOD LOGISTICS

7/10/20 11:34 AM

FOOD (AND MORE) FOR THOUGHT

develop action plans and ensure implementation. Combining artiﬁcial intelligence/machine learning (AI/ ML) advanced analytics with crossfunctional internal and external market expertise is extraordinarily powerful.

Transparency Effective teamwork requires transparency of demand forecasting assumptions, inputs, methodology, outputs, accuracy, inventory and supplier capacity. Without transparency, it is difﬁcult, if not impossible, to achieve alignment behind a single forecast. Without alignment, each upstream process generates its own forecast. Biases, errors and “safety stocks” are compounded along the way. This creates what is known as the “Bullwhip Effect,” where a +/-5% change in actual consumer demand impacts upstream suppliers by as much as +/- 40%. Empty store shelves resulting from today’s unprecedented shifts in consumer demand (which far exceed 5% in many categories) clearly demonstrate this theory. In situations like COVID-19, where true shortages exist and short-term consumer demand is difﬁcult to predict, product allocation comes into play. A triaging process that prioritizes customers by strategic importance, margin and revenue will help safeguard commercial relationship continuity. Supply chain information sharing of demand forecasts, capacity, inventory and alloca-

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tion methodology helps alleviate customer anxiety and strengthens partnerships. Transparency also applies to the forecasting algorithms themselves. Be explicit about assumptions, variables, weights and calculations. If the S&OP team understands the forecast logic, they can analyze, challenge, improve and execute against it more effectively. Eliminating the “black box syndrome” helps eliminate blaming “the system” when actuals don’t align perfectly with the forecast. Accuracy transparency is also essential. Automate back-testing of each forecast to regularly measure and report accuracy and help quickly react to inaccuracies. Conduct deep dives into any signiﬁcant forecast misses. Compare actual results against assumptions to learn, validate or improve. Use a secure technology platform to facilitate seamless, real-time collaboration and communication. Leverage simple self-service and data visualization tools to make forecasting output and the data signal repository, accessible and easily understood by everyone, including external supply chain and customer partners.

Trust Teamwork and transparency build trust—in each other, data, predictive analytics, process, and ultimately, in the results. Data sharing and access are foundational to demand forecasting and trust can be built in several key areas of the process.

All parties need to trust that the data they contribute will be kept secure and used only for agreed-upon purposes. Clearly articulating each party’s data stewardship responsibilities provides a foundation for mutual trust. Trust in the data itself is also important. Data quality must be validated, and deﬁnitions must be clear. Finally, trust in the science of predictive analytics is essential. Currently, organizational comfort level with predictive analytics varies. Understanding how AI systems reach their conclusions and the ability to identify and articulate the key factors used by a model to produce a forecast is essential to building trust in the AI/ML outputs and to transparency. Over the past several months, new business models, partnerships and channels have emerged to help ensure access to safe, healthy food. The most resilient food brands were unafraid to throw their playbook out the window and re-set expectations. Demand forecasting technology, especially advanced algorithm-based AI and ML systems, can create a foundation for agility. But, teamwork, transparency and trust will bring to light the strengths and weaknesses in existing demand forecasting processes in order to help food supply chains navigate through the pandemic and beyond.

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