Protecting Your Inventory from Unwanted “Consumers”

Pest control. It’s a topic you simply can’t ignore when selecting a warehouse or 3PL partner. Whether it flies, crawls, or burrows, pests are a constant threat, especially to facilities storing food-grade products. Without the proper procedures in place, this can mean big problems for your stored product.

Before trusting your inventory to a warehousing provider, ask the questions below to ensure that your products are in good hands.

• What inspections take place around pest control? It is important to work with a facility that goes beyond regular checks on interior and exterior traps. Make sure the actual product is being examined, as well as the tops and sides of pallets, for any pest activity. Some facilities will take extra measures, such as using pheromone traps, to make sure nothing was missed during regular inspections.
• How often are the inspections conducted? A reputable warehouse will have a pest control professional visit at least once a week. Additionally, the warehouse itself should have staff perform detailed inspections during inbound, outbound, and storage processes to ensure product is pest-free at all stages.
• What is the audit process to ensure their pest control vendor is doing their job? Make sure that your warehousing provider does random checks on traps, pallets, etc. directly following an inspection by their vendor. This will reveal if the vendor is doing a thorough job.
• What is the corrective action when pests or pest evidence is found?  Corrective actions are all dependent on the situation. Give a potential warehousing provider a pest related scenario and confirm they can provide a suitable plan of action. 
• How are live insects handled when found? In the event that live insects are found, your warehousing provider should have their pest management company come in to do fumigation or fogging upon your approval. 

Time is Now to Check FSMA Readiness

We know the Food Safety Modernization Act (FSMA) will produce a significant impact within not only the food processing industry, but also all who provide services to processors. While FSMA will change how many do business, there are questions left unanswered.

Knowing non-compliance is not an option, perhaps it’s time to turn a few of those questions into action. Companies that store product or ingredients off-site with third-party warehouses can gauge the safety of their product by posing a few simple questions to their warehouse provider.

Ask to see their Hazard Analysis & Critical Control Points (HACCP) plan. The cornerstone of FSMA is identification of possible hazards to the safety of food products, and creation of controls/procedures to significantly minimize or prevent their occurrence. For facilities storing food products, a robust, written HACCP plan is a must-have for every product type. Absent this document, the facility will be at a severe disadvantage in terms of meeting FSMA standards for protecting your product.

What is their recall/traceability plan? Another of FSMA’s cornerstones is the ability to track and trace food products to prevent a widespread outbreak. Does the warehouse facility have a detailed plan? How often do they perform recall/traceability drills? If recalls and traceability exercises utilize paper instead of computers, it’s probably a red flag of their readiness for FSMA.

How is the facility audited? There are a variety of auditors and levels that facilities can be reviewed at – warehouse, food processor, etc. If the facility is not going through an audit process, it may be another FSMA readiness red flag. Regular audits are a key component of FSMA.

Gone are the days of selecting warehousing based solely on lowest price. With the introduction of FSMA, and its increased level of accountability, food processors must now choose a “partner” rather than a “service provider.” A partner will ensure the quality of the product as if it was their own, as well as comply with FSMA standards.

What Is The Value Of In-The-Box Engineering?

A successful building project goes way beyond just creating a structure. Many decisions must be made throughout the process – some of which could make or break the overall efficiency of an operation.

The weight of these decisions can be eased by enlisting the help of an engineer who truly understands warehousing. An engineer can ensure your new facility operates at maximum efficiency by offering insight on the subjects listed below. 

• Warehouse design. Design is the single most important phase of any construction project. Engineers can focus on long-term efficiency to produce a warehouse design that meets your current needs, while planning for future growth.
• Defining operational needs.  An engineer can start by identifying your most basic requirements, such as ideal pallet sizes, and assist you in identifying issues with your current facility. They can then gain an understanding of how your product moves throughout your facility, and determine where specific items should be placed to deliver the highest level of productivity.
• Selecting the right racking. Every operation has unique requirements, and making the wrong racking decisions can hinder efficiency. An engineer can help you choose the right rack height and layout to optimize your warehouse flow and safety – while maximizing storage capacity. 
• Choosing MHE. Choosing material handling equipment may seem like a simple task; however, it is just the opposite. An engineer will understand the importance of this and will guide you in selecting the proper number and type of equipment, as well as the correct attachments for your facility and products.

Five Mistakes to Avoid When Selecting Material Handling Equipment

Selecting the right material handling equipment (MHE) is often overshadowed by the hundreds of other decisions that come with opening a new warehousing facility. However, selecting the wrong number or type of equipment for the operation can be costly for companies.

Before selecting MHE, companies should do a thorough investigation of their current and future business needs, while avoiding the five mistakes outlined below.

1. Not properly thinking through specs. Do a deep dive of your operational requirements to ensure you are covered for all handling types, especially the infrequent ones. For example, you might miss the fact that a small portion of loads come in shipping containers, and require MHE with a shorter mast to safely enter and exit the container. 
2. Not foreseeing business changes. Study possible developments in your company’s future to ensure proper MHE selection. You might choose to structure a 60-month lease for 20 pieces of equipment, and then find out the next year that volumes are dropping and you only need 15 pieces of equipment.
3. Not building flexibility into a fleet. MHE selections sometimes are based on a company’s current handling needs, but what if next year you take on new business or add new products that the MHE you selected can’t handle? Now you are stuck buying more equipment, resulting in a fleet of underutilized equipment.
4. Not planning properly for battery charging. Companies often focus on the trucks themselves and overlook other requirements to support MHE. For example, companies that select electric equipment must think about proper sizing and setup of a battery charging area. They also need a water source nearby for eye wash and battery watering needs, and it’s imperative that the building has adequate electrical service to handle the quantity and type of battery chargers. 
5. Not negotiating a preventative maintenance agreement. Understanding what is and isn’t included in your maintenance agreement is essential. Companies opting for a fixed maintenance package may overlook expenses that go beyond the fixed monthly rates, such as tires and other wearable items. Having a good understanding of all maintenance expenses enables managers to better predict total operating costs.

Not All Warehouse Management Systems Are Equal

The best third-party logistics (3PL) providers have standardized, repeatable processes that can deliver consistent reliability and efficiency. However, supply chain management is an ever-changing landscape. Only through advanced technology can you get the flexibility to efficiently meet new requirements.

This is why choosing a logistics partner with a tier 1 Warehouse Management System (WMS) is essential. Such systems bring a variety of advantages, such as:

• Flexibility. A tier 1 WMS is versatile enough to meet almost any request a customer has.
• Better labor management. On the surface, this doesn't seem like a customer advantage. However, when a 3PL has access to greater detail on operations, it can allocate staff time more efficiently. As a result, it is able to price its services more competitively. 
• Real-time visibility. This feature simplifies management. Tier 1 systems often have an online portal, where clients can view inventory levels/reports, and schedule receipts and shipments.
• Service reliability and accuracy. A tier 1 WMS enables a 3PL to more consistently and reliably deliver services customers need every day.
• Product safety. Advanced systems not only allow 3PLs to mitigate the occurrence of lost inventory, but they enhance traceability. This is especially important with food and/or serial number tracked products. 

Partnering with a 3PL that has a tier 1 WMS ensures the flexibility to manage your supply chain's constant evolution. It also brings access to features that aid safety and efficiency, while helping to reduce expenses. 

What is the Value of a HACCP Certified 3PL?

The Food Safety Modernization Act (FSMA) is changing how the supply chain functions. Moving forward, companies will need to be more aware of the safety and integrity of their products after they leave the production facility. Partnering with a 3PL company that is trained in Hazard Analysis & Critical Control Points (HACCP), and has a documented HACCP plan is the answer to FSMA standards.

HACCP is a systematic approach to the identification, evaluation, and control of food safety hazards. A plan must be crafted for each food-grade commodity the 3PL handles to ensure specific procedures are being followed. When choosing a 3PL, ask to see their HACCP plan for your commodity. Superior facilities will be able to produce this plan and walk you through their SOPs.

To acquire HACCP certification, facilities must complete a three-day course administered by companies such as ASI Food Safety Consultants. Sessions cover everything from why a HACCP plan is required, to building your own plan. Though retraining is not required, the best 3PLs will take this course every few years to ensure they remain best in class. 

Benefits of working with this type of 3PL include:

• Product safety. Companies gain peace of mind knowing their product's integrity is being protected while outside of their control. Product safety throughout the supply chain is critical. 

• Cost savings. HACCP certified 3PLs have such robust inspection processes that damage or pest issues are identified quickly at the time of receipt. This enables companies to quickly track the issue back to the carrier or porduction facility, making it easier to recoup incurred expenses while preventing future damaged product. 

• Avoid cross-contamination. HACCP certified 3PLs have thorough inspection processes, which help staff identify and deny entry of any contaminated (pest or other contamination) product. This eliminates the risk of cross-contamination with already stored food grade products. 

Know Your Transportation Terms

Transportation seems like a simple concept. It’s about moving products and supplies from Point A to Point B. But there many options to get the job done and knowing the key terms will help you better understand each offering and the industry as a whole.

Take for instance “Transportation Brokerage” and “Managed Transportation.” The two often are used interchangeably, but they are radically different services. Brokerage involves a third party acting as a conduit for a company and the motor carrier to move loads – a very tactical assignment.

Managed Transportation is far more strategic and involves a company outsourcing all transportation functions to a third party. The provider uses detailed analysis and technology to determine the most efficient way of meeting supply chain goals. Managed Transportation is much broader in its scope, looking at a variety of modes as well as warehouse locations.

Other important terms to know include:

• Freight Forwarder. An expert in supply chain management that moves cargo for companies, often utilizing multiple carrier types for a single shipment. Shipments typically travel internationally.

• OTR. Over The Road. Also referred to as TL (Truck Load), these shipments typically travel greater than 350 miles. 

• Shuttle. These are short runs (less than 100 miles) of raw material from a warehouse to a production facility, or finished goods to a warehouse. 

• Regional. Truck loads that travel less than 350 miles within a geographical region. 

• LTL. Less-Than-Truckload. Refers to a shipment that is less than a full truckload. 

• Intermodal. A method of moving freight through multiple modes of transportation, such as rail, ship, and truck. Freight itself is not handled; the shipping container is transferred between the modes. 

• CTB Certified. The Certified Transportation Broker (CTB) program was developed by the Transportation Intermediaries Association. A CTB designation signifies that the professional has undergone rigorous training and testing to ensure they are an expert in the transportation industry. 

Avoid These Costly Warehouse Construction Mistakes

Construction projects are all about decisions...lots of them. It doesn't matter if you're constructing a house or a warehouse, each choice can impact the "livability" of the structure as well as its resale value. 

Companies approaching a new warehouse or distribution center construction project should weigh their options and decisions carefully to avoid some of the common mistakes and consequences listed below. 

• Building too small. Companies not planning for future growth or expansion can end up running out of space sooner than expected. Careful study of current volumes as well as future projections will help avoid this mistake, ensuring a site plan that addresses storage, parking, and other future considerations.
• Building in the wrong locations. Minimizing transportation and handling of products is integral to efficient supply chain management. While a good price on available land or building on company owned property may appear to make sense, it actually may be more costly in the end. Inefficiencies of building in a poor location will quickly deteriorate any upfront savings. Performing a network analysis will help identify the best site for the facility, taking into account all business requirements, options, and constraints. 
• Building the height of the structure too low. Constructing a warehouse that's too low can negatively impact the flexibility of operations and storage space, as well as hurt its resale value. Building taller will reduce the facility's footprint and can accommodate taller racking, which can reduce travel time for Material Handling Equipment (MHE).
• Selecting the wrong racking and layout. Implementing a poor layout and storage system will directly impact your worker safety, labor efficiencies, asset utilization, and can even impact your product. For example, if you are constructing a cooler warehouse, choosing racking that is too tall could restrict airflow and create inconsistent product temperatures. Selecting the right layout will maximize the value per square within the facility. 

Partnering with a builder that has experience in warehouse operations will help companies avoid these mistakes, which can have long-lasting impacts on operational efficiency and flexibility. 

How Will FSMA Impact Carriers and Food Transportation?

While the Food Safety Modernization Act (FSMA) continues to be a work in progress, one thing is for certain – it will generate greater accountability. That accountability will extend through the supply chain to include carriers transporting food products for humans and animals.

The Food and Drug Administration’s (FDA) goal is to develop standards to ensure the safety and integrity of food products. Building off the Sanitary Food Transportation Act, FSMA will test carriers’ documentation skills. In addition, the new rules will bring equal accountability to shippers, carriers, and receivers of food products.

Setting standard operating procedures for tasks such as cleaning trailers, locking and sealing loads, and properly refrigerating products isn't particularly challenging. However, developing a process of collecting, organizing, and storing this information for easy retrieval at a later date is where carriers may face an obstacle.

New standards will make technology almost a prerequisite for carriers.

For instance, document management systems likely will be the norm for linking inspection paperwork to bills of lading. Likewise, the industry could see GPS systems in trucks become standard for carriers, as regulations demand tighter tracking and traceability of food products while they are on the road.

As FSMA approaches, it’s important that food manufacturers review the standard operating procedures of their logistics providers. Questions to ask are:

• Do they have established criteria for inspecting trailers before loading?
• How are these records maintained?
• How quickly can they be produced for review?
• Do they have standards for inspecting products upon arrival?
• How do they ensure trailers maintain the proper temperature for products?
• Do they have real time/GPS tracking and tracing capabilities with their equipment? 

What is a Network Analysis?

Supply chains aren’t just created in one day and then operate unchanged forever. Like all elements of a business, they grow organically, over time. Through the years, customers change, and along with them come new distribution needs. Those alterations no doubt impact delivery requirements…and this is just on the outbound (feeding customer demand) side of the equation. Inbound transportation (feeding production) adds further management complexity.

Along with this organic growth come additional expenses. So how do you know if your supply chain is efficient? Could costs be reduced? Could performance be improved? These are the questions that plague in-house transportation departments. Answers are difficult to arrive at.

It’s been said that one cannot objectively examine a system they are a part of. That’s the reason many companies turn to a 3PL with expertise in transportation management to perform a network analysis. In this objective review, a 3PL company will look at:

• Customer requirements. How do you balance inventories against customer service needs and distribution costs?
• Shipping locations. Where should distribution centers (DC) be located? How many DCs should the company have? Which customers should be served by each DC?
• Storage needs. Are there gains from plant-direct shipping? Should the company contract for warehousing services or operate its own DCs?
• Volume. Which product lines should be produced at each plant and how much? Which suppliers should be used?
• Transportation Modes. Can intermodal or rail be used to reduce costs? Does a pool distribution model make sense? What combination of LTL and TL is most efficient while still meeting transit and volume requirements?
• Data and processes. Are you utilizing industry best practice? Do you have the right talent systems, and processes for performance? Do you have models? Should you be refreshing models with new data?

The goal of a network analysis is to eliminate unneeded movement, which will deliver long-term cost savings. This is done through reducing touches and paid transportation mileage. Uncovering these opportunities requires a 3PL that possesses not only many years of experience, but also the tools to compile and evaluate data.

However, by choosing an experienced 3PL to provide this service, companies can see significant benefits. Logistics savings often range from 8 to 12 percent.

To learn more about this topic and supply chain management, read a column written by WOW Logistics President and CEO Howard Kamerer for the April 18 issue of Cheese Market News. The column can be found here.

How Managed Logistics Can Improve Performance

Imagine if, when building a house, owners went out in search of each specialist alone – finding an electrician, plumber, painter, etc. The sheer time and effort required to do this would be astronomical and easily double the time necessary to complete a project. A general contractor makes much more sense.

Yet many companies choose to design and manage their logistics “house” internally. They pick this carrier for a specific line, another carrier for that line, and task an internal resource or department to manage it all.  Like the building example above, it accomplishes the same job, but not efficiently.

This is the thought behind why companies turn to managed logistics. One major advantage is a much more complete approach. Instead of parceling out tasks, businesses gain an expert who can simplify logistics by providing a total solution.

Other advantages include:

• One point of contact. Instead of managing multiple carriers, sources, and schedules, one company now takes care of all of logistics, and the substantial paperwork that comes with it.

• Improved efficiency. Often a logistics network develops organically through the years. As a result, nobody takes a wider view of the system as a whole. By outsourcing the function, an expert can provide an independent view.  Using their experience and network analysis tools, a logistics provider will develop an overall strategy, identifying efficiencies to yield the best performance. 

• Better allocation of resources. Companies no longer are tasked with recruiting and managing logistics staff. Time can be focused on managing talent in more key areas of the business. 

• Savings. Volume discounts a logistics provider can leverage from carriers, combined with better overall efficiency, should net a cost savings for companies.

No Substitute For Experience When Building A Warehouse

Building a warehouse seems like a pretty basic undertaking, right? At its core, a warehouse is four walls, a roof, and some dock doors. However, there are a variety of “little” things that can have a huge impact on how the facility operates.

That’s why choosing a designer/builder experienced in warehousing is so important when embarking on a new project. A builder with knowledge gained only by completing millions of square feet of work, will be best qualified to make recommendations on where to get the maximum benefit for dollars spent. There is no substitute for this experience.

A skilled builder of warehouses will discuss a variety of elements that can keep operating costs down, such as:

• Selection and placement of racking. This is the single biggest component governing the efficiency of a warehouse or distribution center. A company will never overcome an inefficient in-the-box design, which underlines the importance of selecting a builder/designer who can provide this valuable engineering support. Few builders can.
• Motion-sensor lighting. Reduces energy consumption by lighting only the spaces that are in use.
• HVLS fans. High Volume Low Speed (HVLS) fans move a great deal of air over a wide area, which helps reduce heating and cooling costs.
• Steel reinforced trailer pads. Constant dropping of trailers in the same spot tends to break up concrete over time. Steel reinforced pads help prevent such costly repairs.
• Super flat floors. This specialized concrete work is a prerequisite for taller racking. The benefit comes in being able to utilize the full cube space of the structure. 

There’s nothing basic about building a warehouse or distribution center. Since the efficiency of the facility is determined long before product arrives, it’s important to select a builder/designer who is highly experienced in such projects. They will be able to present further ideas to streamline operations, reduce overtime costs, and trim utility expenses.

What Is Contract Operations And What Value Does It Bring?

Business is all about focusing on your core competencies to deliver value to customers. Savvy owners know this, and can quickly determine what functions to keep in-house and which ones to outsource to an expert. This is why companies choose contract operations.

Contract operations basically means turning over warehouse or distribution center operations to a third party — someone skilled in such activities. This distribution expert will take on recruitment and management of staff; purchase of MHE and racking; implementing warehouse management systems; and is responsible for all storage, handling, and shipping. Contract operations could be provided at a company’s own facility or delivered at an off-site warehouse.

Advantages of such an arrangement include:

• A lower, more predictable cost structure. Capital expenditures (MHE, racking, etc.) are built into a fixed rate schedule that simplifies budgeting.
• Improved warehouse performance. An expert approach, well-defined and implemented SOPs, and advanced technology in warehouse management systems combine to yield better efficiency and greater productivity.
• Location assistance. Often, providers can assist in identifying the optimum location for a warehouse to help reduce transportation costs. Such a service is valuable as transportation is the biggest supply chain expense, at five times the cost of storage.
• Better allocation of resources. By not having to manage warehouse operations, companies are able to focus on their core competencies that deliver value to customers.

For many companies, contract operations is a good fit. However, they must select a service provider who understands their unique needs. This is particularly important if the stored items are food products, which require specialized knowledge and SOPs.

When Bad Weather Hits, Quality Carriers Shine

Sub-zero temperatures are not kind to diesel fuel; they push it toward an unstable gel, which impedes its flow. Not coincidentally, the freezing temperatures and the widespread nasty winter weather impacting most of the country can similarly impede the flow of cargo over the nation’s highways.

Generally speaking, loads are moving a little slower, and missed appointments may have become more frequent this winter.

These conditions can offer a glimpse into the quality of your carrier. When bad weather hits, delays are almost a certainty, but how they are dealt with separates high quality providers from the pack. The service aspect of the relationship becomes critical. Here’s what comes with quality:

• Proactive planning. Quality carriers will plan as much as possible for the impact of bad weather. They will anticipate customers’ scheduled shipments and collaborate to move them up or back to ensure the best result. They understand their customers’ unique needs – whether it’s making certain raw materials arrive to keep production rolling or ensuring on-time delivery to a key partner.

• Communication…lots of it. The best in the business will have an established line of communication (emails, website notices, hotline, etc.) for customers to receive updates on any developments, such as weather delays or equipment breakdowns.

• The pivot. Sometimes even the best hatched plans require a course correction. Carriers with quality systems in place and skilled staff will have the experience and flexibility to deftly pivot in adapting to changing situations.

The quality of your carrier should shine in the worst of conditions. How has yours measured up this winter?