Strategic Savings Initiatives
Although supply chain costs must sometimes take a back seat to other priorities, produce professionals continue to pursue savings agendas. They’ve harvested most of the low hanging fruit and it is now necessary to address the more difficult issues to uncover hidden opportunities. “When I think of all the ways in the last three years we’ve cut costs, there’s not much more that can easily be done,” ob-serves Hayes. “It forces you to think outside of the box to maximize the efforts of all involved.”
Collaboration
Cross-chain collaboration is a strategy that offers significant savings opportunities and performance benefits. Each of the experts discussed the importance of respectful relationships, information sharing, and a long-range perspective. Chasing one-sided benefits and quick wins jeopardize relationships and drive future costs higher.
Nowhere is this more true than in transportation. Overly aggressive rate negotiations destroy goodwill and impede future access to cost-efficient capacity. Klein cautions against such tactics: “Many shippers beat carriers down in loose markets. When the market tightens, the gains from beating the carriers turn 180-degrees very quickly—the hero-to-zero concept becomes very real and these shippers end up paying more for less.”
Instead, produce companies would be wise to concentrate their freight with core carriers and brokers to promote mutual success. “When we have loads moving on a year-round basis, we get favored rates from trucking companies,” Hayes explains. “We parlay our volume into cost savings, not only for us—we also pass savings onto our grower base.”
Visibility
Visibility enhancement is another strategy for uncovering hidden savings pros-pects. Information sharing in near real time enhances understanding of what is happening outside of one’s immediate purview. This opens a world of possibilities for supply chain productivity improvement, product waste reduction, and disruption management.
“Let’s get visibility through the entire supply chain,” Treacy advocates. “It helps with identifying bottlenecks, challenges, deficiencies, and opportunities. Deal with these issues as they’re happening and work together to finetune the process to make it work more efficiently and reduce costs.”
Greater visibility of harvest schedules will also support procurement processes. In-transit updates on freight location and load arrival times enable distribution center labor planning. And, timely point of sale information facilitates accurate de-mand forecasting. Each supports better resource utilization and drives availability of fresher product.
Technology
Technology deployment is another strategy mentioned by the experts. Technology facilitates visibility, rapid information sharing, and decision support. The most effective tools extract data from multiple systems to provide temperature tracking, inventory location, and support-related requirements.
