by Fronetics | Jun 24, 2014 | Blog, Logistics, Marketing, Social Media, Strategy
Many companies within the logistics and supply chain industries are stuck on the social media starting line. The reason – “they can’t get past the word ‘social’ and the perception it creates.” The reality is that social media is a tool that can be utilized to create value and grow your business.
This is the fifth in a series of articles that provides examples of companies within the logistics and supply chain industries who have moved beyond the social media starting line and have realized the business value of participating in social media.
Logistics industry start-ups leverage social media
Social media allows for instant connections and communication. Two start-ups, Trucker Path and Keychain Logistics, have created solutions for the logistics industry which leverage these characteristics of social media.
Trucker Path
Launched in February 2013, Trucker Path is a mobile platform for the trucking industry which connects shippers and carriers, and provides crowdsourced logistical assistance.
Specifically, the Trucker Path app (available via iOS, Andriod, and Web) enables carriers to find truckloads, shippers to move their cargo, and for truckers to get crowdsourced logistical information such as the locations of truck stops, rest areas, and information on weigh stations.
Keychain Logistics
Keychain Logistics uses technology to automate the marketplace and match shippers with carriers.
The Keychain Logistics app (available via iOS, Andriod, and Web) provides instant communication between shippers and carriers – eliminating the need for human powered brokerage.
Both Trucker Path and Keychain Logistics have recognized that there is more to social media than socializing – they have recognized that social media is a business tool.
by Fronetics | Jun 23, 2014 | Blog, Logistics, Marketing, Social Media, Strategy, Supply Chain
Many companies within the logistics and supply chain industries are stuck on the social media starting line. The reason – “they can’t get past the word ‘social’ and the perception it creates.” The reality is that social media is a tool that can be utilized to create value and grow your business.
This is the fourth in a series of articles that provides examples of companies within the logistics and supply chain industries who have moved beyond the social media starting line and have realized the business value of participating in social media.
Cerasis is a top freight logistics company and truckload freight broker. During the company’s first 15 years it focused on traditional sales and marketing strategies and relied heavily on referrals. This strategy worked. Cerasis acquired new customers, retained current customers, and realized positive growth. However, Cerasis was not viewed as an industry leader, and brand awareness was low.
In 2012 Cerasis decided to participate in social media and launch a content marketing strategy.
Cerasis began actively blogging, and began using Twitter, LinkedIn, Facebook, Pinterest, and Google+. The company quickly became seen as a leader within the industry, and brand awareness increased dramatically.
Within 15 months the company received 71 leads from search engines, 65 leads from social media, and 52 leads from webinars. Even more impressive, within 15 months the company gained 35 customers (one customer within the freight logistics industry can mean a lot of revenue).
The results show that Cerasis is no longer on the social media starting line – rather, Cerasis is now a leader, not only in the freight logistics industry, but also in using social media as a business tool.
by Jennifer Hart Yim | Jun 19, 2014 | Blog, Logistics, Manufacturing & Distribution, Strategy, Supply Chain
Entrants to the market need to understand the barriers to entry and problems with management and transparency within the pet food industry supply chain.
This article is part of a series of articles written by MBA students and graduates from the University of New Hampshire Peter T. Paul College of Business and Economics.
The pet food industry is a market that boasts $21.57 billion dollars in sales in the United States (2013). With 95.6 million cats and 83.3 million dogs owned in the United States, it is no wonder that there is such a large market for the food that the self-proclaimed “pet parents” feed them. However, it isn’t all good news for aspiring entrants, as they must first understand the supply chain that dictates this growing industry.
To manufacture, or not to manufacture
When a pet food company chooses to produce a product, they essentially have three options: 1) manufacture it themselves, or choose a co-packer who will either 2) use a private label or 3) manufacture the food to the specifications of the brand.
A contract packer (co-packer), otherwise known as a contract manufacturer, is a company that manufactures and packages foods for their clients. The manufacturer works under a contract with the hiring company to manufacture the pet food as though the hiring company was doing it themselves.
Co-packers can manufacture several different brands and for several companies at once. An example of a co-packer would be C.J. Foods, Inc. with manufacturing plants in Bern, Kansas, and The Pawnee City, Nebraska. According to C.J. Foods Inc., the company produces over 300 varieties of animal foods, including dog, cat, reptile, and exotic bird.
Companies typically outsource to another entity for production due to cost savings, rather than building their own plant. Additionally, they can focus on their own core competence, whether it is marketing, sales, etc. The manufacture’s core competency is production, and they have the experience and knowledge to produce the pet foods already. However, there can be many challenges associated with the management of pet food supply chains and co-packers in particular.
The challenges with co-packers
As the pet food market grows and becomes more complex, the sourcing of ingredients becomes more complicated.
Foreign suppliers source products from numerous small farms, and identities become lost and commingled. Unfortunately, brands are relying on these suppliers to meet food-safety criteria.
Additionally, these brands typically rely on audits of suppliers by private third-party companies that carry no guarantee. An example of this would be Kellogg and Peanut Corporation of America (PCA). Kellogg had PCA audited by AIB international, and PCA passed with a superior rating. However after the recall (explained in detail below), the FDA found leaks and rodent infestations within the plant.
Pet food industry product recalls
There have been two major recalls within the pet food industry in recent years.
One, the largest in history, was the ChemNutra recall in 2007. Two Chinese export firms sold wheat gluten bags tainted with melamine to Las Vegas-based ChemNutra, “the Chinese ingredient specialist importer.” ChemNutra then sold the tainted wheat gluten to pet food makers under false certificates of analysis. As a result, 5,300 pet foods were recalled, and thousands of cats and dogs were injured/killed. Owners of both the Chinese companies and ChemNutra pleaded guilty to various misdemeanors involving the mis-branding of food and conspiracy to commit wire fraud.
The second recall involves a 2009 salmonella outbreak in the Peanut Corporation of America’s plant in Blakely, Georgia. PCA knowingly shipped salmonella-tainted products across the country to many manufacturers, including those in the pet food industry. Along with the shipments, they sent certificates of analysis that indicated the product contained no salmonella, but they had yet to receive the test results (which were positive). This resulted in 3,200 pet food products being recalled, 8 deaths, and 500 illnesses. A 76-count indictment charged four former officials at PCA with numerous infractions relating to salmonella-tainted peanuts and peanut products.
These two examples are the horrific results from a lack of control over the supply chain within the manufacturing of pet foods. The consequences of these recalls, first and foremost, can cause the injury and death of both pets and people. Beyond that, there is implicit lost brand trust, consumer demand decrease, headaches for retailers/wholesalers, and severe cost increases for the company.
Solution: Improving supply chain management
Given the information above, it is essential that companies proactively work to avoid recalls through better management of the supply chain.
Co-packers become problematic when an ingredient or plant is infected because that trickles down to the many different brands and companies for whom they manufacture. That is not to say that pet food companies should never use a co-packer, especially because the cost-saving benefits can be so great. Pet food companies, however, should do their research prior to choosing a co-packer.
If you are using a private label, know where the co-packer is sourcing its ingredients. If you are not using a private label, you need to ensure you know the suppliers with whom the co-packer is working. The same rule applies if your pet food company has its own manufacturing plant, as well.
Secondly, pet food manufacturers can supplement third-party audits of co-packers’ plants with their own inspection and testing of ingredients and plant surfaces.
As a consumer purchasing these foods off the shelf, attempt to do your research, too. Although you may not be able to see exactly where products are coming from due to confidentiality of competitive sourcing, you can choose brands that have a commitment to transparency and educating the consumer on where their ingredients are sourced from. An example of this would be Natura Pet Products, which launched its “See Beyond The Bag” campaign. This part of their interactive website allows consumers to click on any product and view where in the world any specific ingredient in the product is being sourced from. Additionally, consumers can educate themselves on how Natura ensures a quality manufacturing process.
In conclusion, pet food manufacturing can be a difficult industry if a company is not well versed in the associated challenges. If a tight reign is held over the supply chain and quality manufacturing follows, the pet food industry is a growing market with a bright outlook for companies vying to do business within it.
Mikayla Cadoret recently completed her MBA at the University of New Hampshire – Paul College of Business and Economics. She is an experienced sales representative and is interested in pursuing a career in marketing or supply chain management. She can be reached at [email protected].
by Fronetics | Jun 17, 2014 | Blog, Marketing, Social Media, Strategy, Supply Chain
Many companies within the logistics and supply chain industries are stuck on the social media starting line. The reason – “they can’t get past the word ‘social’ and the perception it creates.” The reality is that social media is a tool that can be utilized to create value and grow your business.
This is the third in a series of articles that provides examples of companies within the logistics and supply chain industries who have moved beyond the social media starting line and have realized the business value of participating in social media.
Sourcemap: End-to-end supply chain visibility
In the wake of events such as hurricane Sandy, the Fukushima nuclear distaster, the Bangladesh factory collapse, and the horse meat scandal, businesses and consumers are increasingly demanding supply chain transparency.
Sourcemap is a social network which provides end-to-end visibility within a supply chain. Sourcemap offers supply chain mapping, crowdsourced RFIs, risks and alerts, and KPI dashboards. Launched by researchers at MITs Media Lab, Sourcemap was recently named one of Spend Matters Top 50 companies to watch.
Figure 1: What Sourcemap Offers
Sourcemap connects producers, manufacturers, and consumers for end-to-end visibility. Manufacturers can use Sourcemap to trace products down to raw materials, to manage risk, to and plan more resilient, efficient supply chains.
Consumers can use Sourcemap to learn where things come from and what they’re made of, including their social and environmental impact.
Stonyfield used Sourcemap to create an interactive sourcing map for its yogurt – to show consumers where the ingredients that go into their yogurt comes from.
Consumers simply click on an ingredient shown on the map (Figure 2) and then are shown information about the specific ingredient (Figure 3).
Figure 2
Figure 3
In the process of creating the map, Stonyfield engaged suppliers and fostered increased communication and stronger relationships. These relationships, this communication, and the ability for companies (and consumers) to know their supply chain from end-to-end is what Sourcemap wants to provide.
Sourcemap takes social media and makes it a vital supply chain tool.
by Jennifer Hart Yim | Jun 12, 2014 | Blog, Data/Analytics, Strategy, Supply Chain
This article is part of a series of articles written by MBA students and graduates from the University of New Hampshire Peter T. Paul College of Business and Economics.
Regularly tracking your relationship with your suppliers and their performance toward your expectations is critical to ensure the success of your business. One mechanism for tracking this is the supplier scorecard. A scorecard is in essence a report card for your supplier. Supplier scorecards when used effectively can help maintain a healthy supply chain and will benefit both parties. If not used effectively supplier scorecards can damage the supplier relationship and hurt both businesses.
Effective scorecards should use meaningful metrics. If it doesn’t align with business goals then it shouldn’t be measured. Easily measured variables of no importance will just cause clutter; they could also cause a supplier to focus their performance in areas that do not matter. If the metrics are not clearly defined and understood by the suppliers then it will be hard for them to adjust their performance in these areas. Another consideration is there may be things that are important to you which your suppliers have no way of measuring or attaining the performance you are asking for.
As with all business to business relationships communication is critical for maintaining and improving supplier performance. To ensure suppliers meet your needs you should communicate to them from the offset how their performance will be measured. You can even tie bonuses and penalties into their performance scores. You should be mindful that your relationship with your supplier should be collaborative; as you grow so should they. You should share the results of your scorecards with your suppliers on a regular basis and shouldn’t wait until a review to raise a concern. Another important aspect of communication is sharing your business objectives and performance data with your suppliers. This can help them to better shape their business to meet your needs as your business fluctuates.
It is important when evaluating suppliers to have a good process in place for tracking important metrics. When possible it is best to use accurate data that is understood by both you and your supplier. If you use fuzzy metrics which are subjective then improvements become difficult to measure and target. Also, tracking metrics throughout the scoring period will help to ensure the data is accurate and your scorecard reflects actual performance.
When dealing with different suppliers it is important to make sure the metrics you are evaluating are relevant to each supplier. As a result it is not recommended to use a one size fits all approach to supplier scorecards. Another thing to keep in mind is that you may be sourcing from the same supplier through multiple locations. It is important to track each of these on its own scorecard to help your supplier learn where they are doing things right and where they are falling short of your expectations.
Where I work we have several strategic supplier partnerships. The way we manage supplier relationships is through quarterly business reviews with each of our partners. In these meetings high level representation from both companies is present. We share with our partners our business results and forecasts in addition to any major company news. After sharing this information we review our scorecard process with the suppliers, show a score card comparison, take a detailed look at each rating, and then provide an overall summary.
Our scoring system looks at aspects of quality, delivery, cost, support, and inventory management. With respect to quality we look at hard numbers like failures out of the box and returns from our customers. We take into account both product quality and process quality. When it comes to delivery we measure on-time delivery, missed shipments, and lead times. Some of our customers have long term fixed cost agreements so this metric isn’t required, for others the cost fluctuates; we measure whether or not their costs are in line with our expectations. Support has several levels including technical support, order support, and special cases. Inventory management tracks how well they are able to maintain some inventory on hand for us.
Our scorecard metrics used to be scored on the basis of a five point scale from far below expectations to far above expectations. After running through several of these scorecards we determine that it was not likely to get exceeds expectations because the only time expectations could be exceeded is if our demand was well above our forecasts. Since this goal wasn’t something attainable by a supplier of their own action we adjusted our scorecard to have only three levels, from below expectations to meets expectations.
The scorecard comparison is unique to the supplier and it shows the ratings for each of the metrics for the current review period as well as four prior quarters. We display this in a color coded matrix so that it is easy to see where each metric is improving, staying the same, or regressing from period to period. For my employer these quarterly business reviews give us frequent touch points with our suppliers. This helps us to identify issues and areas for improvement to strengthen our supplier relationships and our business.
Throughout this article I have hit on several best practices with respect to supplier scorecards. I want to stress that this is just a tool. The fact that you have a scorecard system in place should not prevent you from acting immediately if issues present themselves. After all, this should be a collaborative exercise which will benefit both your company as well as your suppliers. In addition it is important to solicit internal feedback from interested parties. Supplier scorecards should be used to make decisions about whether or not to continue supplier relations or to pursue alternative suppliers.
Mike Cleary is a Software Quality Assurance Engineer at Empirix pursuing his Masters of Science in Management of Technology from the University of New Hampshire. He has over ten years of experience in testing IP and telephony solutions across a variety of platforms. In his current role he is responsible for not only ensuring Quality in the E-XMS solution but other administrative tasks such as lab configuration, VM server, and perforce administration.
by Fronetics | Jun 9, 2014 | Blog, Marketing, Social Media, Strategy, Supply Chain, Transportation & Trucking
Many companies within the logistics and supply chain industries are stuck on the social media starting line. The reason – “they can’t get past the word ‘social’ and the perception it creates.” The reality is that social media is a tool that can be utilized to create value and grow your business.
This is the second in a series of articles that provides examples of companies within the logistics and supply chain industries who have moved beyond the social media starting line and have realized the business value of participating in social media.
Long-haul truck drivers are more likely to be overweight or obese than the general public (86% v. 65%). Additionally, truck drivers are more likely to smoke, have high blood pressure, and suffer from sleep apnea than the general public. The poor health of long-haul truckers is largely due to their lifestyle. Long-haul trucking is a sedentary lifestyle. It is also a lifestyle which makes it challenging to access gyms and healthy foods.
The cost of poor health is enormous – for truckers and for their employers. The estimated annual health care costs of obesity-related illness are $190.2 billion, or nearly 21 percent of annual medical spending in the United States. Looking specifically at the trucking industry – a study published in the Journal of Occupational and Environmental Medicine found that obese truckers had an annual average total health care cost of $1,944, compared with $1,755 for overweight truckers and $1,131 for normal-weight drivers. A sleep apnea screening and treatment program conducted by Schneider National identified 350 drivers who required treatment. Treating these drivers not only improved their health, but it also improved the company’s bottom line – over a one year period, Schneider National saved $530 per month per driver in insurance costs and saw a 71 percent reduction in accidents involving those drivers during the same period.
An article in Today’s Trucking shares the story of Jason Janneta a 42 year old trucker who had been driving for 20 years and was a poster boy for the statistics – overweight and unhealthy. Fed up, he decided to make a lifestyle change. Within six months of embracing a healthier lifestyle he had lost 80 pounds. During this period he had also taken to Twitter to share his experience and to motivate other truckers to adopt a healthier lifestyle, lose weight, and improve their health.
Tweeting as @urbanhauler with #fittrucker, Jannetta captured the attention of other truckers (he quickly grew his followers to more than 1,500) and the attention of Jared Martin, the President of Speedy Transport.
Martin recognized the value of Jannetta’s efforts and of #fittrucker – healthier individuals, a healthier bottom line, and opportunity to attract new drivers.
According to Martin:
“I really enjoyed a lot of his posts and what he was trying to do for the industry, so we brought him in for a meeting.”
The two discussed the role of health and fitness on the future of the transportation industry. The next day, Martin offered Jannetta a job at Speedy Transport – Driver Trainer and Wellness Advisor. Martin accepted the position and now tweets for @speedywellness where he brings “#trucking and #fitness/#wellness together.”
Speedy Transport is one company which has recognized social media as a business tool and has moved far beyond the social media starting line. The Twitter profile of @speedywellness rightly points out “we #ChangeTheGame of #Trucking.”
