Successful management of the perishables supply chain is challenging in the best of times. Add conditions of extreme weather, increasing food safety requirements, shrinking transportation capacity, and more stringent retailer requirements and the challenge grows exponentially. Supply chain professionals must overcome these obstacles daily to ensure fruits and vegetables reach store shelves safely, and at peak freshness.
So how do key participants in the fresh produce supply chain consistently achieve this goal in a cost-efficient manner? We explored this question and more with three industry experts during a rousing roundtable discussion.
Our participants were Mason Brady, director of finance and supply chain at Homegrown Organic Farms in Porterville, CA, which grows and markets certified organic blueberries, citrus, stone fruit, and grapes; Gene Gallant, director of supply chain for Chelsea, MA-based State Garden, Inc., which packs and supplies organic and conventional leafy greens, spinach, and celery hearts; and Doug Grant, executive vice president and chief operations officer for the Oppenheimer Group, headquartered in Vancouver, British Columbia. Oppy partners with 250 growers worldwide to manage marketing, sales, and logistics from farms to retail locations.
The conversation covered a wide variety of topics, including industry change and challenges, supply chain strategy, and talent requirements needed to support the fresh produce demands of foodservice distributors, retailers, and consumers. We also talked about enabling technologies which will be featured as Part Two of this roundtable in the October 2018 issue of Blueprints.
Change and Challenges
The fresh produce industry has been in a continuous state of change for decades. Growers, packers, and shippers are being challenged to provide year-round access to a wider variety of product amid obstacles from field to retail shelf.
How does managing the perishables supply chain differ from 10 or 15 years ago? Grant: I’ve been in the industry for 23 odd-years and each year is more complex than the last. Every customer seems to have unique requirements now, whether it’s program, business, or logistics requirements. Everyone has stiffer food safety and traceability requirements, and we’ve seen quite an increase in sustainability and social responsibility requests. Add in the wider assortment of pack styles, value-added items, and new product varieties, and we’re dealing with much greater complexity today.
Successful management of the perishables supply chain is challenging in the best of times. Add conditions of extreme weather, increasing food safety requirements, shrinking transportation capacity, and more stringent retailer requirements and the challenge grows exponentially. Supply chain professionals must overcome these obstacles daily to ensure fruits and vegetables reach store shelves safely, and at peak freshness.
So how do key participants in the fresh produce supply chain consistently achieve this goal in a cost-efficient manner? We explored this question and more with three industry experts during a rousing roundtable discussion.
Our participants were Mason Brady, director of finance and supply chain at Homegrown Organic Farms in Porterville, CA, which grows and markets certified organic blueberries, citrus, stone fruit, and grapes; Gene Gallant, director of supply chain for Chelsea, MA-based State Garden, Inc., which packs and supplies organic and conventional leafy greens, spinach, and celery hearts; and Doug Grant, executive vice president and chief operations officer for the Oppenheimer Group, headquartered in Vancouver, British Columbia. Oppy partners with 250 growers worldwide to manage marketing, sales, and logistics from farms to retail locations.
The conversation covered a wide variety of topics, including industry change and challenges, supply chain strategy, and talent requirements needed to support the fresh produce demands of foodservice distributors, retailers, and consumers. We also talked about enabling technologies which will be featured as Part Two of this roundtable in the October 2018 issue of Blueprints.
Change and Challenges
The fresh produce industry has been in a continuous state of change for decades. Growers, packers, and shippers are being challenged to provide year-round access to a wider variety of product amid obstacles from field to retail shelf.
How does managing the perishables supply chain differ from 10 or 15 years ago? Grant: I’ve been in the industry for 23 odd-years and each year is more complex than the last. Every customer seems to have unique requirements now, whether it’s program, business, or logistics requirements. Everyone has stiffer food safety and traceability requirements, and we’ve seen quite an increase in sustainability and social responsibility requests. Add in the wider assortment of pack styles, value-added items, and new product varieties, and we’re dealing with much greater complexity today.
Gallant: I’ve seen an increase in food safety regulation over the past 10 years. In terms of managing the cold chain, we now must be able to document cradle-to-grave flows, the carrier networks being used, and those types of things. We also have less transportation capacity than in the past. It’s becoming more difficult to find the right carrier partners to get our product from the West Coast to the East Coast. And certainly, our customers are much more sophisticated today in terms of their quality assurance requirements.
Brady: To follow up on the food safety issue, it’s no longer just a department or function in an organization. It needs to be everybody’s mindset. When making a decision, you have to ensure that it supports your food safety standards and complies with what each customer wants. There’s also a lot of activity in data collection and usage, but it seems as if every customer has particular desires and a different platform or portal where you upload data. The fact that they’re not very consistent makes it a big challenge—you end up creating roles in your organization just to actively manage supply chain data and ensure it consistently fits each customer’s needs.
Any other supply chain issues you’re having to manage now versus the past? Gallant: Trying to get people on the same communication spectrum is difficult; it’s more manual than we’d like it to be, it’s harder to find qualified carriers, and many of them are not well linked. We have to communicate manually about when and where loads will be picked up because the climate impacts what we can cut and process to ship. You’re constantly moving trucks around.
Brady: We have a legitimate concern about sustainability of operations with the lack of water in California. You have to diversify your supply whether that be Mexico, the East Coast, or up north, meaning you’re collecting information from and communicating with folks in very different locations. This creates forecasting and planning challenges. You don’t want to throw people at the planning problem; you have to create really intuitive, easy-to-use applications and technology to help people input clean data into the system. Clean data allows you to accurately forecast and make correct decisions.
Grant: We have grower partners throughout North America and from 26 countries around the world. About half is imported, half is domestic. You really need to control your supply chain and have full visibility of where everything is located to make good decisions that meet customer requirements. The biggest thing for us has been integrating ecommerce capabilities with our suppliers.
Supply Chain Strategy
Balancing customer service and operational cost in an increasingly diverse marketplace is a major focal point for supply chain professionals. Produce companies must embrace logical strategies to drive revenue and bottom line profitability.
What types of tactics and strategies are you using to improve your supply chains? Brady: Lean is really big for us and we’re adopting it throughout the organization. Stripping out the wasteful nonvalue-adding activities from what you do is really important. The key is to specifically define what you’re trying to improve and find ways to do it in a value-adding way.
It’s something that’s really helpful in this environment of information overload—having too much data that doesn’t really help people is just as bad as not having the data. Narrow it down to about three to five simple points you’re trying to get out of the data.
Gallant: I agree that people are getting a lot of information today but their
schedules are still no less complicated. It’s easy to create data, but it generates extra work to consume the data and figure out what’s important. The more you can drill down with relevant dashboards and reports, the more efficient you’ll become at analyzing and getting to the heart of process improvement.
Grant: We’re developing mobile apps to help with transportation and to continuously improve the work everyone’s doing—it’s the only way to try and stay ahead of things. Also, whatever strategy you’re working toward, you must have complete support starting at the top of the organization. The strategy has to be conveyed and constantly worked on to make it happen—you need champions in each area of the supply chain to push the agenda forward.
Talent Needs
Supply chain leaders and functional champions don’t grow on trees. Building the right team with the capability to create excellence requires time and effort. Hence, produce companies must invest in the re-cruitment, development, and retention of high potential talent.
What are the top challenges of finding talented produce professionals? Gallant: We’re a 7-day per week, 20-hour operation. I find that younger people want a 9-to-5 job Monday through Friday, but that’s just not available in our industry. There are too many things going on and too many moving parts, which means responding to email from suppliers and customers at any time of the day about things that aren’t just going quite the way they were planned.
Grant: We face the same issue, finding people who have a real passion for the produce business and are willing to go those extra steps and do more than the 9-to-5 job. The growing work-to-live rather than live-to-work mentality is a challenge for our industry.
Brady: I feel like a lot of folks in the industry, except within bigger firms, don’t quite understand what the supply chain really encompasses. Some people just think there’s logistics, inventory management, procurement, and materials in different departments. They mentally separate all those little pieces rather than bring them all together.
Gallant: Many people are not technologically sophisticated, and yet, they’re good produce people and have been doing it for 25 to 30 years. They’re good buyers. They’re good people who do quality and all those types of things, but they’re not tech savvy. A lot of those folks are going to be retiring, so now you’re looking for the next generation to come in and be innovative and tech savvy.
Grant: The biggest challenge is your really good people become targets for competitors. It’s a relatively small industry in terms of the real experts, and your competitors are looking for qualified people. They don’t want to go through three to five years of talent development efforts, and you can lose key people who are pretty hard to replace. We have to bring people up faster and bring in new recruits all the time.
How do you overcome these challenges to build a competitive team? Brady: Our company culture means everything to us in terms of recruiting and retention abilities. We have to build a culture that people enjoy because nobody here works 9-to-5. It’s a family type of organization: we celebrate birthdays, weddings, and births—you feel like you’re part of a family. We believe this culture helps retain folks who aren’t interested in grabbing a few years of experience and then jumping ship.
Grant: We’re keeping Baby Boomers on as long as possible, that’s for sure. And we look for young people who are willing to learn and stick with us—the key is showing them progressive advancement in the company, cross-training them in other departments, and building their technical skills. Make the culture and working environment really desirable; that’s the only way as I see it.
Gallant: We’re doing the same thing; we look internally for promotable people who might start out on the manufacturing floor, then go into inspection, and on to a management role. There’s a progression and our people go through a lot of training by the time they get to upper management.
Brady: For folks to have full supply chain knowledge, you have to build them inside your organization or you need to source them from a bigger company so their knowledge is not concentrated in one particular area. Expose them to a variety of supply chain functions and goals so they get the bigger picture and truly understand how things are interrelated.
Grant: Everyone has to work cohesively to have a good handle on supply chain. We’ve adopted lean methodologies around collaboration, work groups, morning huddles, category huddles, and automated dashboards to ensure people from different departments are working with the same information. Then we make sure people have a chance to visit locations, so whether it’s a visit to a farm, greenhouse, or ship unloading, they gain a good feel of what the whole business does. Going forward, I think the employee of the future can’t be segmented into some narrow function; he or she needs to really see that there’s much more to supply chain. That’s how we can get the passion back into the produce business by having much wider opportunities for people.
Wrap-Up
The fresh produce industry presents many supply chain challenges that must be addressed. Our experts identified lean strategies and engaging talent with a broad perspective in this half of the roundtable and will discuss enabling technology in the second part as another key to building a successful enterprise.
Further, our participants recommend cohesively managing every link along the cold chain to simultaneously achieve food safety, in-stock availability, and customer satisfaction. Stay tuned!
