Baldwin Richardson Foods had both the computer capabilities and the processes needed to attain near-perfect inventory visibility. But one essential ingredient was missing.
James Cooke is a principal analyst with Nucleus Research in Boston, covering supply chain planning software. He was previously the editor of CSCMP?s Supply Chain Quarterly and a staff writer for DC Velocity.
With a sophisticated, multifunctional business management system to oversee its operations, Baldwin Richardson Foods appeared to have everything it needed to achieve world-class inventory control. Yet up until last year, the food manufacturer struggled mightily with inventory visibility issues. Though its system had the capacity to track the movement of raw materials and finished goods through the plant and DC and beyond, managers had learned not to put much store in the information it generated, which was often sadly out of date.
The problem lay not in the system itself—an enterprise resource planning (ERP) system that includes warehouse management capabilities among its many functions—but in the company's data entry process. Because the food producer's plant and DC lacked even the most basic automated data-collection technology, supervisors had to enter inventory data into the system manually. Although that worked well enough on good days, there were plenty of times—if someone was out sick, for instance—when the information wasn't updated immediately. As a result, the ERP system was often behind in its inventory records.
That might sound like a minor problem, but it was proving costly to the company, which makes ice cream as well as liquid food products like syrups, dessert toppings, dipping sauces, condiments, and specialty fillings for the baking industry. For one thing, the lack of up-to-date inventory information often resulted in unnecessary purchases of expensive ingredients like flavorings. Tracking flavorings has long been a sticky issue for Baldwin Richardson. Although flavorings come in 500-pound drums, only 10 pounds' worth of a given flavoring might be used in a particular batch of syrup or sauce. "When the flavoring was delivered to the plant, the entire drum was taken out of inventory," explains Craig Czajka, the company's IT manager, "and the system wouldn't show it as available until after the job closed out [which could be as many as six days later]. If it was needed for something else, we'd know we probably had it in stock, but we didn't really know or know how much."
The company was also paying a price in efficiency. In an effort to avoid running out of ingredients, which would lead to production stoppages, the food producer had begun taking full inventory counts every three to four months."We had to because we needed to verify what was happening on the floor,"says Czajka.With sales growing year over year, it was becoming clear that something had to change.
A piece of cake
Based in Frankfort, Ill., Baldwin Richardson was created when the Baldwin Ice Cream Co. purchased the Richardson Foods division of Quaker Oats in 1997. Although the company still makes ice cream (under the Baldwin brand), it now concentrates mainly on its liquid food product lines. Its customers include chain restaurants as well as some of the largest food manufacturers. One of its biggest clients is Kellogg Foods, for which Baldwin Richardson makes the fillings used in Nutri-Grain bars.
Though the actual food processing takes place at a factory in Macedon, N.Y., products are distributed from a DC in nearby Williamson, N.Y. The 100,000-square-foot Williamson facility holds most raw materials as well as finished products for outbound shipment to customers (the company is in the process of converting some of that space to manufacturing). A shuttle truck runs between the plant and distribution center, making a run almost every hour to deliver ingredients to the factory or finished products on pallets to the DC for storage and shipment. About 20 employees in three shifts work five days a week in the distribution center. On a light work day, Baldwin Richardson ships about 20 trucks' worth of product; on a heavy day, it ships out about 40.
Operations at the Williamson DC are overseen by the company's ERP system, which is the Ross Enterprise product suite from CDC Software. Along with managing warehouse and shipping activities, the ERP handles the company's financials as well as the supplier management, quality assurance, material requirements planning, and manufacturing functions. As Czajka puts it, "Our ERP system is everything to us—it runs the whole business."
Although Baldwin Richardson had looked into different bar-coding systems in the past, concerns about their compatibility with its ERP system had kept the company from moving ahead. But just over two years ago, Baldwin finally found a supplier that had the expertise it was looking for. In December 2005, it contracted with LXE Inc., a Norcross, Ga. based specialist in wireless systems, to devise a mobile computing solution.
After evaluating Baldwin Richardson's requirements, LXE came up with a design for a wireless network and mobile data collection system. For the data-collection units, LXE chose VX7 vehicle-mounted computers for forklifts and MX7 handheld computers for use by supervisors and others in the factory and warehouse. Both types of mobile computers are able to interact with the Ross ERP system, sending data back and forth on an 802.11 standard radio-frequency network.
As part of the installation, LXE conducted a site survey to determine the optimal locations for the wireless points in order to provide complete facility coverage. The mobile computers are always within a 40foot range of the antennas. LXE installed eight antennas in the plant—enough to cover the production floor and provide backup coverage in the event of a unit failure—and 12 in the distribution center. (When Baldwin Richardson recently converted some of the distribution space to manufacturing, it reduced the number of antennas to seven.) The wireless network began operating in June 2006 at both the factory and DC. "The wireless implementation was a piece of cake," says Czajka.
In conjunction with the wireless network installation, Baldwin Richardson bought a special bar-coding module for the ERP system. Reconfiguring the system to take advantage of the real-time data took almost a year to complete. Czajka notes that the software piece proved to be much more complicated than the wireless network installation.
Point and pick
In April 2007, the center began using the wireless data collection system to track finished goods in real time. One of the most visible results has been the elimination of the paper pick tickets used in the past. Today, the ERP system sends instructions to forklift truck drivers via their vehiclemounted computers. The list of items to be retrieved is displayed on the computer. To get started, the driver simply clicks on an item, and the computer tells him or her where the needed pallet is located.
The computer system now relies on the bar-coded data to track the status of inventory. When workers scan items as part of their putaway and picking routine, for example, the data are sent wirelessly to the computer, which allows the ERP system to update inventory and location. Workers also scan outgoing orders at the loading dock to make sure that orders are complete and accurate.
The bar-code scanning procedures also ensure that product codes and lot numbers are entered accurately into the computer system. The ERP system then uses this information to develop picking instructions in accordance with the company's first-in, first-out inventory management strategy.By issuing pick instructions based on expiration dates, the system helps minimize problems with out-of-date ingredients.
Wireless data collection has brought other benefits as well. "The system really reduces our paperwork," says Czajka. "Now everything is automatically time stamped and date stamped, with lot numbers and quantities recorded."
To help the workers adapt to the new approach, the company held special training sessions, often on Saturdays, that involved mock movements of product. The company trained some 60 people, including supervisors, in wireless data collection for both the warehouse and manufacturing operations. Czajka reports that training included instruction not just on how to use the system but also on how to fix mistakes.
Czajka says that the training was crucial to a successful implementation. "A lot of people had been here for 20 years and this was a culture change for them," he says. "If you didn't train them properly, we would have seen errors on the back side."
No more blind spots
How has the new wireless solution worked out? Baldwin Richardson Foods reports that the system has eliminated production blind spots, improved inventory control, and boosted productivity.
Take the order fulfillment process, for example. Today, warehouse workers work more efficiently than they did before the system was installed because they no longer have to fetch paper pick tickets every time they go to fill an order. In fact, the forklift drivers have picked up the task of printing out the shipping documents tendered to the truck driver—a task formerly handled by a warehouse documentation specialist.When the forklift driver goes to load a truck, he or she scans the pallet at the loading door, letting the computer system know that the product has been transferred. The driver then enters the shipment status into his or her computer and generates the documents. That frees up the shipping department workers who formerly checked loads and chased down paperwork to spend their time on other tasks.
Wireless data collection has also meant fewer shipping errors. Because the forklift driver checks the bar code on the pallets while loading the truck, the system can alert the operator if he or she is placing an incorrect item on the vehicle. "Because things are in real time, we can pick up on errors right away," says Czajka.
Up-to-the-minute status information on stock on hand in the DC has eliminated blind spots in inventory. Today, when a pallet with, say, 50 bags of salt is moved to the production area so that one of the bags can be used, it no longer drops out of sight in the inventory system. Even though the entire pallet has been taken out of inventory temporarily, managers can still check on its status."Because planning and purchasing can see that we have 49 bags left, we [know we] don't need to re-order," says Czajka.
In fact, now that it has a better handle on inventory, Baldwin Richardson Foods is considering the elimination of the annual two-day shutdowns to take physical inventory. "This might be our last year for doing physical inventories," says Czajka. "If the spot accounts meet the auditors' requirements, we will only do cycle counts."
Wireless data collection, moreover, has enabled the food producer to respond swiftly to potential problems."The wireless computers give us the ability to fix our problems faster," says Czajka. "Now we know within a few hours if something is wrong. Before, errors might not show up for days or even weeks after production, and by that time it's hard to track down what happened. Today our orders are more accurate, and our people are working more quickly."
Parcel giant FedEx Corp. is automating its fulfillment flows by investing in the AI robotics and autonomous e-commerce fulfillment technology firm Nimble, and announcing plans to use the San Francisco-based startup’s tech in its own returns network.
The move is significant because FedEx Supply Chain operates at a large scale, running more than 130 warehouse and fulfillment operations in North America and processing 475 million returns annually. According to FedEx, the “strategic alliance” will help to scale up FedEx Fulfillment with Nimble’s “fully autonomous 3PL model.”
“Our strategic alliance and financial investment with Nimble expands our footprint in the e-commerce space, helping to further scale our FedEx Fulfillment offering across North America,” Scott Temple, president, FedEx Supply Chain, said in a release. “Nimble’s cutting-edge AI robotics and autonomous fulfillment systems will help FedEx streamline operations and unlock new opportunities for our customers.”
According to Nimble founder and CEO Simon Kalouche, the collaboration will help enable FedEx to leverage Nimble’s “fast and cost-effective” fulfillment centers, powered by its intelligent general purpose warehouse robots and AI technology.
Nimble says that more than 90% of warehouses today still operate manually with minimal or no robotics, and even those automated warehouses use robots with limited intelligence that are restricted to just a few warehouse functions—primarily storage and retrieval. In contrast, Nimble says its “intelligent general-purpose warehouse robot” is capable of performing all core fulfillment functions including storage and retrieval, picking, packing, and sorting.
For the past seven years, third-party service provider ODW Logistics has provided logistics support for the Pelotonia Ride Weekend, a campaign to raise funds for cancer research at The Ohio State University’s Comprehensive Cancer Center–Arthur G. James Cancer Hospital and Richard J. Solove Research Institute. As in the past, ODW provided inventory management services and transportation for the riders’ bicycles at this year’s event. In all, some 7,000 riders and 3,000 volunteers participated in the ride weekend.
Photo courtesy of Dematic
For the past four years, automated solutions provider Dematic has helped support students pursuing careers in the STEM (science, technology, engineering, and mathematics) fields with its FIRST Scholarship program, conducted in partnership with the corporate nonprofit FIRST (For Inspiration and Recognition of Science and Technology). This year’s scholarship recipients include Aman Amjad of Brookfield, Wisconsin, and Lily Hoopes of Bonney Lake, Washington, who were each awarded $5,000 to support their post-secondary education. Dematic also awarded $1,000 scholarships to another 10 students.
Motive, an artificial intelligence (AI)-powered integrated operations platform, has launched an initiative with PGA Tour pro Jason Day to support the Navy SEAL Foundation (NSF). For every birdie Day makes on tour, Motive will make a contribution to the NSF, which provides support for warriors, veterans, and their families. Fans can contribute to the mission by purchasing a Jason Day Tour Edition hat at https://malbongolf.com/products/m-9189-blk-wht-black-motive-rope-hat.
MTS Logistics Inc., a New York-based freight forwarding and logistics company, raised more than $120,000 for autism awareness and acceptance at its 14th annual Bike Tour with MTS for Autism. All proceeds from the June event were donated to New Jersey-based nonprofit Spectrum Works, which provides job training and opportunities for young adults with autism.
The logistics process automation provider Vanderlande has agreed to acquire Siemens Logistics for $325 million, saying its specialty in providing value-added baggage and cargo handling and digital solutions for airport operations will complement Netherlands-based Vanderlande’s business in the warehousing, airports, and parcel sectors.
According to Vanderlande, the global logistics landscape is undergoing significant change, with increasing demand for efficient, automated systems. Vanderlande, which has a strong presence in airport logistics, said it recognizes the evolving trends in the sector and sees tremendous potential for sustained growth. With passenger travel on the rise and airports investing heavily in modernization, the long-term market outlook for airport automation is highly positive.
To meet that growing demand, the proposed transaction will significantly enhance customer value by providing accelerated access to advanced technologies, improving global presence for better local service, and creating further customer value through synergies in technology development, Vanderlande said.
In a statement, Nuremberg, Germany-based Siemens Logistics said that merging with Vanderlande would “have no operational impact on ongoing or new projects,” but that it would offer its current customers and employees significant development and value-add potential.
"As a distinguished provider of solutions for airport logistics, Siemens Logistics enjoys a first-class reputation in the baggage and air-cargo handling areas. Together with Vanderlande and our committed global teams, we look forward to bringing fresh impetus to the airport industry and to supporting our customers' business with future-oriented technologies," Michael Schneider, CEO of Siemens Logistics, said in a release.
I recently came across a report showing that 86% of CEOs around the world see resiliency problems in their supply chains, and that business leaders are spending more time than ever tackling supply chain-related challenges. Initially I was surprised, thinking that the lessons learned from the Covid-19 pandemic surely prepared industry leaders for just about anything, helping to bake risk and resiliency planning into corporate strategies for companies of all sizes.
But then I thought about the growing number of issues that can affect supply chains today—more frequent severe weather events, accelerating cybersecurity threats, and the tangle of emerging demands and regulations around decarbonization, to name just a few. The level of potential problems seems to be increasing at lightning speed, making it difficult, if not impossible, to plan for every imaginable scenario.
What is it Mike Tyson said? Everyone has a plan until they get punched in the mouth.
It has never been more important to be able to pivot and adjust to challenges that can throw you off your game. The report I referenced—the “2024 Supply Chain Barometer” from procurement, supply chain, and sustainability consulting firm Proxima—makes the case for just that. The company surveyed 3,000 CEOs from the United Kingdom, Europe, and the United States and found that the growing complexities in global supply chains necessitate a laser-sharp focus on this area of the business. One example: Rightshoring, which is the process of moving business operations to the best location, means companies are redesigning and reconfiguring their supply chains like never before. The study found that large numbers of CEOs are grappling with the various subsets of rightshoring: 44% said they are planning to or have already undertaken onshoring, for instance; 41% said they are planning to or have undertaken nearshoring; 41% said they are planning to or have undertaken friendshoring; and 35% said they are planning to or have undertaken offshoring.
But that’s not all. CEOs are also struggling to deal with the rise of artificial intelligence (AI) and its application to business processes, the potential for abuse and labor rights issues in their supply chains, and a growing number of barriers to their companies’ decarbonization efforts. For instance:
Nearly all of those surveyed (99%) said they are either using or considering the use of AI in their supply chains, with 82% saying they are planning new initiatives this year;
More than 60% said they are concerned about the potential for human or labor rights issues in their supply chains;
And virtually all (99%) said they face barriers to decarbonization, with 30% pointing to the complexity of the work required as the biggest barrier.
Those are big issues to contend with, so it’s no surprise that 96% of the CEOs Proxima surveyed said they are dedicating equal (41%) or more time (55%) to supply chain issues this year than last year. And changing economic conditions are adding to the complexity, according to the report.
“As inflation fell throughout last year, there were glimmers of markets stabilizing,” the authors wrote. “The reality, though, has been that global market dynamics are shifting. With no clear-set position for them to land in, CEOs must continue to navigate their organizations through an ever-changing landscape. Just 4% of CEOs foresee the amount of time spent on supply chain-related topics decreasing in the year ahead.”
Simon Geale, executive vice president and chief procurement officer at Proxima, added some perspective.
“It’s fair to say that the complexities of global supply chains continue to have CEOs around the world scratching their heads,” he wrote. “The results of this year’s Barometer show that business leaders are spending more and more time tackling supply chain challenges, reflecting the multiple challenges to address.”
Perhaps the extra focus on supply chain issues will help organizations improve their ability to roll with the punches and overcome resiliency challenges in the year ahead. Only time will tell.
Investing in artificial intelligence (AI) is a top priority for supply chain leaders as they develop their organization’s technology roadmap, according to data from research and consulting firm Gartner.
AI—including machine learning—and Generative AI (GenAI) ranked as the top two priorities for digital supply chain investments globally among more than 400 supply chain leaders surveyed earlier this year. But key differences apply regionally and by job responsibility, according to the research.
Twenty percent of the survey’s respondents said they are prioritizing investments in traditional AI—which analyzes data, identifies patterns, and makes predictions. Virtual assistants like Siri and Alexa are common examples. Slightly less (17%) said they are prioritizing investments in GenAI, which takes the process a step further by learning patterns and using them to generate text, images, and so forth. OpenAI’s ChatGPT is the most common example.
Despite that overall focus, AI lagged as a priority in Western Europe, where connected industry objectives remain paramount, according to Gartner. The survey also found that business-led roles are much less enthusiastic than their IT counterparts when it comes to prioritizing the technology.
“While enthusiasm for both traditional AI and GenAI remain high on an absolute level within supply chain, the prioritization varies greatly between different roles, geographies, and industries,” Michael Dominy, VP analyst in Gartner’s Supply Chain practice, said in a statement announcing the survey results. “European respondents were more likely to prioritize technologies that align with Industry 4.0 objectives, such as smart manufacturing. In addition to region differences, certain industries prioritize specific use cases, such as robotics or machine learning, which are currently viewed as more pragmatic investments than GenAI.”
The survey also found that:
Twenty-six percent of North American respondents identified AI, including machine learning, as their top priority, compared to 14% of Western Europeans.
Fourteen percent of Western European respondents identified robots in manufacturing as their top choice compared to just 1% of North American respondents.
Geographical variances generally correlated with industry-specific priorities; regions with a higher proportion of manufacturing respondents were less likely to select AI or GenAI as a top digital priority.
Digging deeper into job responsibilities, just 12% of respondents with business-focused roles indicated GenAI as a top priority, compared to 28% of IT roles. The data may indicate that GenAI use cases are perceived as less tangible and directly tied to core supply chain processes, according to Gartner.
“Business-led roles are traditionally more comfortable with prioritizing established technologies, and the survey data suggests that these business-led roles still question whether GenAI can deliver an adequate return on investment,” said Dominy. “However, multiple industries including retail, industrial manufacturers and high-tech manufacturers have already made GenAI their top investment priority.”