Margin pressures are a major issue for food manufacturers due to increases in transportation expenses, wages, and tariffs. Companies absorbed unanticipated costs in 2018 and costs in 2019 will trickle down to retailers. Unemployment is at a record low and has reduced the supply of available truck drivers, plant, and warehouse employees. The increase in production costs have added to distribution challenges such as inventory planning and on-time deliveries. As a result of the tight labor market and rising wages, companies are investing in robotics, process automation, and enterprise resource planning.
Food and beverage companies were active in 2018 acquiring other companies to revitalize their portfolios to better reflect growing consumer interest in snacking, consumption of healthy foods, and growing markets. Companies in 2019 will look to simplify and refocus their portfolios, and divest of brands no longer part of their objectives. This will require an analysis of their current warehousing and distribution operations to deliver on service levels needed to meet consumer demands and reduce costs.
Food and beverage companies realize grocers are moving swiftly to eCommerce. This may require a shift in thinking on how products are packaged and require food manufacturers to evaluate packaging and look to lighter weights, without sacrificing product sustainability.
Why is Tompkins Unique?
We provide a full spectrum of supply chain services including analysis, design, implementation support, and turn-key solutions. Our end-to-end supply chain knowledge means we view all projects in the context of how the solution will impact the overall supply chain performance.
We take a holistic view of the processes and technologies to identify gaps and opportunities to determine the right solution(s) to meet all clients’ unique circumstance. We provide specific recommendations to Do Now, Do Next, and Do Later.
Meeting the Challenges and Opportunities of Today and Tomorrow
Our goal is to ensure your supply chain can meet the operational requirements needed to achieve your business objectives. These objectives can involve a wide range of traditional and non-traditional supply chain challenges such as:
- Channel Diversity: As the number of alternative channels and eCommerce channels grow, service performance becomes more complex. “Connected Customers” shop when they want and where they want. The supplier must be ready to deliver excellent service to customers anywhere. Food and beverage companies can no longer count on economies of scale achieved through a one-size-fits-all approach to their customers. This impacts distribution networks, picking requirements, inventory, transportation and system capabilities, the entire end-to-end supply chain.
- Today’s Inventory: As food retailers are keeping less inventory per item but more variety of goods, they require faster delivery, greater selection, optimal deployment of inventory and visibility, which are just some of the issues food and beverage companies are focused on today. A network that responds to this ever-changing deployment of inventory is required. Through network analysis understanding the service levels, delivery times, costs and risks, achieves optimal inventory levels that can respond to the ever-changing environment.
- Transportation Optimization: Logistics costs are the number one driver for food and beverage manufacturers, with retailers putting more pressure on delivery accuracy these costs need to be controlled. Additionally, with the disruption of the traditional transportation lanes, many manufactures are going to have to become more nimble in their network and transportation options to optimize and remain relevant in the coming decade. Modernization of the transportation management systems is a requirement to achieve a strategic advantage.
- The Modern Warehouse: As each channel has its own requirements in terms of service, order type, and order size; the ability to meet the demands for speed of delivery, improved productivity, and changing product picking profiles is largely a function of MHE and WMS capabilities. Understanding the correct equipment and functionality is a complex issue that will have to be solved.
Tompkins International: Whether it is in your existing network or ours, execution from design through implementation, as well as maintenance requires proven experience. We deliver innovative and cost-effective solutions that meet the capabilities required today and the flexibility to adapt to the needs of tomorrow.