Excellence in Execution

The third logistics challenge is cross-chain visibility. Real-time insight regarding inventory availability, order requirements, pricing dynamics, storage conditions, and trailer temperatures are essential for making informed logistics decisions. Produce companies with the technological capability to remotely monitor events and respond rapidly with logistics solutions are at a distinct advantage over their less agile competitors.

“From an operational point of view, shipment visibility is key to managing dynamic conditions,” Langley states. “An average customer order changes five times before the product is delivered. Quantities, destinations, prices, and sources can jump around. You have to be able to deal with the changes through process flexibility and good connectivity with your drivers.”

A final logistics challenge is achieving operational excellence in storage and distribution facilities. These operations must minimize product handling, correctly rotate inventory, and fulfill orders accurately to achieve cost efficiency goals. A logical approach to operational excellence is to adopt ‘lean’ logistics principles, focusing on the continuous improvement of value to the customer and the continuous elimination of waste in logistics operations. (The theory and practice of lean manufacturing was pioneered by Toyota in Japan, gaining widespread recognition in the 1980s and 1990s.)

“We started using lean principles in our warehouse in 2010,” notes Comito. “It takes a lot of work and commitment from the top level. We’re seeing greater efficiencies and it really improves operations.” Capital City Fruit applies the ‘5S’ methodology (translated from Japanese as sort, set, shine, standardize, and sustain) to remove clutter, improve safety, and avoid wasted time. Value stream mapping simplifies or eliminates activities that generate no benefit for the customer, while ‘work cells’ have been redesigned to an L- or U-shape to quickly move people to where they are most needed and minimize product travel distance.

Collectively, these strategic responses help companies manage the constant barrage of logistics issues. Likewise, investing in dynamic logistics capabilities help a produce company build sustainable advantages over competitors who plan poorly and operate in a strictly reactive manner.

Facilitating Relationships
Not every participant in the fresh produce supply chain has the expertise or financial wherewithal to establish superior logistics capabilities. This should not be a deterrent from making logistics excellence a priority—those needing assistance should reach out to supply chain partners that do have the necessary skills and capacity.

Twin Garden Sales established a truck brokerage to provide fresh produce to customers on a delivered basis. “Customers may not have an in-house logistics or transportation group,” explains Hayes. “When you can walk in and take on part of those responsibilities as a shipper, it is more favorable to customers. You do have to earn their trust in your service and pricing. They will test you to make sure your rates are as good as somebody else they might call.”

Another option is to use logistics service providers (LSPs) for inventory management, order fulfillment, and transportation requirements. Logistics service providers “own” the fulfillment process and are responsible for timely, economical order completion. The customer’s role is to define requirements and monitor execution to ensure the relationship is achieving the desired outcomes.