Putting an emphasis on distribution
April 2, 2012
by Shane Whitaker
Bakers and snack manufacturers generally pride themselves on the quality products they make. Yet while a bakery can create the greatest sourdough breads in the world, if its loaves are not delivered accurately and on time, then the business has failed.
Ensuring products efficiently reach customers depends on logistics, or supply chain, management. Distribution plays a major role in the baking business, but it is an activity where many companies fail to stay on top of the latest technologies that are available. Many have not changed or adapted their distribution systems as they’ve moved into the 21st century.
Correctly managing the supply chain saves costs as businesses become more effective in moving and loading orders as well as ensuring properly fulfilled deliveries. Fewer customer complaints result. Logistics management can yield cost savings in administration as well by eliminating the large amount of paperwork generated by paper-based logistics programs. Sales also benefits because these team members are no longer tied up trying to correct orders that were not properly delivered.
“A lot of hidden costs in distribution are taken as business as usual,” said Marc Braun, president of Pcdata, Inc., East Granby, CT. “If you have a good logistics solution, all those costs go away, and the bottom line impact is enormous. In fact, it may be larger than what you would think at first or even second glance. We’ve had customers say, ‘We thought this would help organize our shipments a bit, but we were amazed at what it did for the business.’ ”
Often when orders are shorted, the bakery corrects this, but such activity adds miles. With increasing fuel costs, this can have a major impact on the bottom line.
“If your salespeople are tied up with unhappy customers and missed shipments every day, they have less time for selling. There is a pretty big trickle-down effect when you have less and less accuracy and accountability in your entire order process or in warehouse management processes,” said Frank Mochak, vice-president of business development, Pcdata.
According to Ralf Ulmer, president, ToolBox Software North America, Inc., St. Paul, MN, this part of a bakery represents “one of the last undetected areas where there has hardly been any improvement over the years.”
ToolBox’s warehouse management system (WMS) for paperless dispatching, dispoTool, generally generates in a 30% labor costs savings for bakeries in warehousing, according to Mr. Ulmer.
Although bakers don’t generally view staffing as a logistics issue, Mr. Braun said he finds bakeries often have too many people in the warehouse fulfilling orders. “When we put in our systems, we typically see a 30% reduction in labor,” he added.
Double handling product is fairly common in shipping. “This inefficient handling practice makes product tracking much more difficult as well as provides more opportunity for lost, misplaced or damaged product,” said Ken Mentch, sales manager, Workhorse Automation, Oxford, PA.
Logistics management deals with the finished product from the end of production until the customers receive it.
Although software represents the most vital part of dispoTool, Mr. Ulmer said, ToolBox considers itself more than a typical software company. “We work with the people on the floor filling orders, so we see ourselves mostly as a consultant working out concepts to make distribution work,” he added. “Every bakery is different, so we customize our solutions for each bakery.”
While hardware plays an essential role in its logistics management solutions, Mr. Braun lauded Pcdata’s customized software for giving bakeries the needed flexibility for efficiently and effectively managing their supply chains. “Our software allows the user to very flexibly deal with adds and cuts and to prioritize orders for the production that it has in hand, which is something that you don’t find in common software systems,” he said.
Mr. Mochak added, “If you don’t have good, easy-to-use, flexible, powerful software, you can put any kind of hardware you want out there, and it won’t be effective.”
Designed for fast-moving consumer goods, Pcdata’s Distrib software is at the heart of its WMS solutions. During the past decade, however, the company introduced multiple modules for Distrib to help make it a complete logistics management solution. For example, Distrib Production Count, located at the end of the production line, provides distribution with an accurate count of exactly what has been produced. Distrib will recalculate orders based on this real-time information to optimize order fulfillment and maximize customer satisfaction.
The company developed its Distrib Put-to-Light module specifically to assist bakeries with paperless dispatching. The module uses LED displays installed above load-out areas to help direct workers to the right place to accumulate products for a given customer’s order. The company offers Pick-to-Light and Put-to-Voice modules as well.
ToolBox also manufactures put-to-light and pick-to-light systems that employ multicolored displays to assist staging of orders. But many bakeries have less floor space than they would prefer for this task. As bakeries add new products or lines, production and/or packaging may encroach into its distribution footprint, but a WMS assists the bakery to use its existing space most effectively, according to Mr. Ulmer.
Both ToolBox and Pcdata stated that their dispatching solutions are easy to learn and use. “It is absolutely critical that you can hire anyone off the street, and in 10 minutes, they could work with our system,” Mr. Braun said. “We focus on making if foolproof and simple.”
To this end, Mr. Ulmer noted that ToolBox’s paperless dispatching system is multilingual and can even use different languages at the same time.
Introducing more modules
Another of the modules from Pcdata automatically scans each stack of product as it is loaded onto a delivery truck. With Distrib Dock Manager, wide-range bar code scanners located at the dock doors automatically read bar codes attached to stacks. If a warehouse worker or driver attempts to put the wrong stack on a truck, an audio-visual feedback occurs. This stops everything in its tracks with a loud noise. “Somebody has to then use the software to open the door again to begin loading that truck,” Mr. Braun added.
Once the truck is loaded and full, the system automatically creates a load manifest. “There are no more handmade load manifests, no more assumptions about what did or didn’t go on the truck, or what might have gone on the truck,” Mr. Braun said. “It’s a complete confirmation of what got loaded.”
To ensure baked foods reach their proper destination, the company offers Distrib Proof of Delivery. Delivery drivers scan a bar code at drop-off locations to confirm delivery, and once they have completed this, they place the handheld scanner into a dock and the information reconciles.
Often distribution and production function as separate entities within a bakery; however, with a logistic management system, these two groups can start working together to better meet the needs of customers. “When we come on board, we will work with production and let them know that to optimize shipping we need this, and the people start talking and working together and not on their own plants,” Mr. Ulmer said.
Food safety programs work better when bakeries employ logistics systems to track, trace and recall items, if necessary. Because they can collect information about exactly what batches are delivered to which customer, bakeries can be more precise with their recalls.
In many cases, Mr. Ulmer said bakeries attempt to retrieve more product than necessary in the event of a recall because they do not have a system that sufficiently tracks and traces the exact products affected.
Many bakeries have long overlooked making changes to their logistics and supply chain management systems, but today, more options are available to ensure accurate deliveries while reducing paperwork and cutting labor in warehouse and distribution.