Utz finds creative solution to fending off snack attacks
Utz Quality Foods wanted a way to assure there was nothing in its bags of snack foods but the product itself. With its new automated system and in-line X-ray, it now has visual proof.
Peter Bradley is an award-winning career journalist with more than three decades of experience in both newspapers and national business magazines. His credentials include seven years as the transportation and supply chain editor at Purchasing Magazine and six years as the chief editor of Logistics Management.
To some, the name Utz is synonymous with potato chips. But serious snack food fans know better. As they can tell you, the Hanover, Pa.-based company also makes pretzels, cheese curls, cheese balls, popcorn, tortilla chips, and party mix—essentially everything needed for an afternoon of watching football but the TV.
Since its founding in 1921, Utz Quality Foods has grown to become one of the largest privately held snack companies in the United States, serving markets along the East Coast from Maine into the Carolinas. It distributes its products through a network of regional DCs—both company-owned and leased facilities—extending across 15 states. In addition to the regional DCs, Utz operates what it calls its "World Distribution Center," a facility located adjacent to one of the company's four manufacturing plants in Hanover. From there, orders are shipped daily to the distribution network using Utz's private fleet and outside trucking firms, says Jeff Fuhrman, the company's vice president of engineering. A separate warehouse for bulk distribution serves its big box and warehouse club customers.
Given the high volume of products it ships out to major companies, Utz was becoming increasingly concerned about ensuring the integrity of every bag of snacks. "Food safety became an issue for us," says Fuhrman. In particular, Utz wanted to find a way to assure that as products passed through manufacturing to the consumer, they were free of foreign contamination.
When it came to specifying its requirements for the system, the company set the bar pretty high. Essentially, what it wanted was an ultra-reliable method of inspecting high volumes of product without creating unnecessary delays. Eventually, it found the solution it sought. Working in collaboration with Hytrol Conveyor Co. and its material handling systems integrator Wepco Inc., the company came up with an innovative blend of X-ray technology and automated material handling equipment that has both enhanced the safety of its products and boosted the operation's productivity.
High-tech inspections
The centerpiece of the new system, which went into operation at Utz's Kindig Lane manufacturing and central distribution facility this summer, is a conveyor system that whisks finished cartons from packaging through an X-ray device and on to an automated sorter prior to palletizing and shipping.
Under the new process, machines do most of the heavy lifting, freeing workers for lighter duties and problem-solving tasks. After the cartons are packed in production, workers manually apply bar-code labels to each carton with the appropriate product and expiration code information. The cartons are placed onto one of eight Hytrol E24 conveyor lines, where they accumulate prior to being loaded onto one of eight vertical lifts. The vertical lifts (supplied by United Sortation Solutions) elevate the cartons so they can be merged onto a main conveyor line, which in turn carries them around a 90-degree curve onto a mezzanine and on to the X-ray detector.
While the cartons are moving through the system, information on their contents is being fed to the X-ray device. "Prior to passing through the X-ray detector, the bar code of each carton is scanned and the product SKU information is sent to the X-ray system," Fuhrman explains. "What we're looking for are foreign objects, missing product, seasoning conglomerates, and incorrect weights."
If any of those conditions are detected, the system rejects the case into a contaminated lane, an over/underweight lane, or a failed bar-code read lane. "The system captures an image of each carton, making it easy for employees to identify which package in the carton has a problem," Fuhrman adds.
When the X-ray system rejects a carton, it sends an alert to the DC managers. Employees then address any cartons that were rejected, removing the problem package or investigating the cause of a failed bar-code read. The corrected cartons are then reintroduced into the system at a point prior to the X-ray detector.
Cartons that pass through the X-ray system without issues descend on a spiral conveyor past a bar-code reader and onto a Hytrol two-sided narrow belt sorter. The sorter diverts cartons to one of 14 gravity sort lanes as determined by the bar code. At the end of these gravity lanes, workers palletize the cartons by hand. Cartons the scanner failed to read are diverted to a designated gravity sort lane. When a lane is full, cartons recirculate through the sorter until they can be accommodated.
Big plans for the future
As for how it's all working out to date, Fuhrman has high praise for the new system. In addition to achieving the primary goal of food safety, he says, it has yielded a number of other benefits.
For one thing, it has streamlined operations, providing Utz with a significant boost in productivity. For another, it has enabled the company to make more productive use of space in the DC. On top of that, it has improved product quality, Fuhrman adds. The X-ray helps detect what he calls "conglomerates," such as seasonings or products that have clumped together.
When asked what's next, Fuhrman says the company will add automated case packing and palletizing equipment to the system in the near future. In addition, he says, there are plans to install six additional vertical lifts. "We've set up the infrastructure for a totally automated system," he says.
But perhaps the best measure of the system's success is the company's decision to expand it beyond the Kindig Lane facility. Fuhrman reports that Utz will soon install similar systems at its other manufacturing plants to ensure that no foreign objects of any kind find their way into its products. "Our food safety goal is to X-ray every product," he says. "This has been a huge help."
Jeremy Van Puffelen grew up in a family-owned contract warehousing business and is now president of that firm, Prism Logistics. As a third-party logistics service provider (3PL), Prism operates a network of more than 2 million square feet of warehouse space in Northern California, serving clients in the consumer packaged goods (CPG), food and beverage, retail, and manufacturing sectors.
During his 21 years working at the family firm, Van Puffelen has taken on many of the jobs that are part of running a warehousing business, including custodial functions, operations, facilities management, business development, customer service, executive leadership, and team building. Since 2021, he has also served on the board of directors of the International Warehouse Logistics Association (IWLA), a trade organization for contract warehousing and logistics service providers.
Q: How would you describe the current state of the contract warehouse industry?
A: I think the current state of the industry is strong. For those that have been focused on building good client relationships over the years, I think it’s a really exciting time. Coming out of all the challenges of the past few years, I think there’s a lot of opportunity for growth and deeper partnerships. It’s fun to see the automation and AI (artificial intelligence) integration starting to evolve [in a way that’s] similar to what we saw with WMS (warehouse management systems) in the early 2000s.
Q: You are now president of your family firm. Is it an advantage having grown up in the business as opposed to working elsewhere?
A: I definitely believe it was an advantage growing up in the business. Whether it’s working with family or someone else in the industry, there’s always an advantage when you have mentors[to guide] you. I’ve been blessed to have several mentors, some in the industry, others just in life, and I’m thankful that they were willing to mentor me and that I was willing to listen to them.
Q: What are the biggest challenges currently facing 3PLs, and how are you addressing them?
A: Labor and legislation are both tough right now. The two seem to have a lot to do with each other, and it can make it tough to find and retain people. So I think we’ll see more and more automation of processes industrywide.
Q: Third-party service providers often must handle a wide variety of products for a lot of different clients. Does this variety make it difficult to invest in automation and other new technologies?
A: It can make things more difficult when looking at certain automation, but it’s in the “difficult” that a lot of opportunities lie. It would be tough to find a single solution that fits every client’s needs, but there are always opportunities to improve in certain areas. It just takes a bit of vision and commitment, and a willingness to invest in your own long-term success.
Q: As a 3PL, what do you look for when selecting the clients you work with?
A: Quality relationships that will last a long time. When both parties are happy and working together in the same direction, everyone wins.
Q: You’ve been a board member of the International Warehouse Logistics Association since 2021. Why is your involvement with this organization important to you?
A: I think it’s important to understand what’s happening in the industry. IWLA is a great resource for staying up to date and getting a solid education when it comes to the latest logistics trends. I also think it’s important to give back and pass along what we’ve learned to those just getting started in the business. As important as it is to have a mentor, it’s just as important to mentor and help others.
“While there have been some signs of tightening in consumer spending, September’s numbers show consumers are willing to spend where they see value,” NRF Chief Economist Jack Kleinhenz said in a release. “September sales come amid the recent trend of payroll gains and other positive economic signs. Clearly, consumers continue to carry the economy, and conditions for the retail sector remain favorable as we move into the holiday season.”
The Census Bureau said overall retail sales in September were up 0.4% seasonally adjusted month over month and up 1.7% unadjusted year over year. That compared with increases of 0.1% month over month and 2.2% year over year in August.
Likewise, September’s core retail sales as defined by NRF — based on the Census data but excluding automobile dealers, gasoline stations and restaurants — were up 0.7% seasonally adjusted month over month and up 2.4% unadjusted year over year. NRF is now forecasting that 2024 holiday sales will increase between 2.5% and 3.5% over the same time last year.
Despite those upward trends, consumer resilience isn’t a free pass for retailers to underinvest in their stores by overlooking labor, customer experience tech, or digital transformation, several analysts warned.
"The 2024 holiday season offers more ‘normalcy’ for retailers with inflation cooling. Still, there is no doubt that consumers continue to seek value. Promotions in general will play a larger role in the 2024 holiday season. Retailers are dealing with shrinking shopper loyalties, a larger number of competitors across more channels – and, of course, a more dynamic landscape where prices are shifting more frequently to win over consumers who are looking for great deals,” Matt Pavich, senior director of strategy & innovation at pricing optimization solutions provider Revionics, said in an email.
Nikki Baird, VP of strategy & product at retail technology company Aptos, likewise said that retailers need to keep their focus on improving their value proposition and customer experience. “Retailers aren’t just competing with other retailers when it comes to consumers’ discretionary spending. If consumers feel like the shopping experience isn’t worth their time and effort, they are going to spend their money elsewhere. A trip to Italy, a dinner out, catching the latest Blake Lively and Ryan Reynolds films — there is no shortage of ways that consumers can spend their discretionary dollars,” she said.
Editor's note:This article was revised on October 18 to correct the attribution for a quote to Matt Pavich instead of Nikki Baird.
The market for environmentally friendly logistics services is expected to grow by nearly 8% between now and 2033, reaching a value of $2.8 billion, according to research from Custom Market Insights (CMI), released earlier this year.
The “green logistics services market” encompasses environmentally sustainable logistics practices aimed at reducing carbon emissions, minimizing waste, and improving energy efficiency throughout the supply chain, according to CMI. The market involves the use of eco-friendly transportation methods—such as electric and hybrid vehicles—as well as renewable energy-powered warehouses, and advanced technologies such as the Internet of Things (IoT) and artificial intelligence (AI) for optimizing logistics operations.
“Key components include transportation, warehousing, freight management, and supply chain solutions designed to meet regulatory standards and consumer demand for sustainability,” according to the report. “The market is driven by corporate social responsibility, technological advancements, and the increasing emphasis on achieving carbon neutrality in logistics operations.”
Major industry players include DHL Supply Chain, UPS, FedEx Corp., CEVA Logistics, XPO Logistics, Inc., and others focused on developing more sustainable logistics operations, according to the report.
The research measures the current market value of green logistics services at $1.4 billion, which is projected to rise at a compound annual growth rate (CAGR) of 7.8% through 2033.
The report highlights six underlying factors driving growth:
Regulatory Compliance: Governments worldwide are enforcing stricter environmental regulations, compelling companies to adopt green logistics practices to reduce carbon emissions and meet legal requirements.
Technological Advancements: Innovations in technology, such as IoT, AI, and blockchain, enhance the efficiency and sustainability of logistics operations. These technologies enable better tracking, optimization, and reduced energy consumption.
Consumer Demand for Sustainability: Increasing consumer awareness and preference for eco-friendly products drive companies to implement green logistics to align with market expectations and enhance their brand image.
Corporate Social Responsibility (CSR): Companies are prioritizing sustainability in their CSR strategies, leading to investments in green logistics solutions to reduce environmental impact and fulfill stakeholder expectations.
Expansion into Emerging Markets: There is significant potential for growth in emerging markets where the adoption of green logistics practices is still developing. Companies can capitalize on this by introducing sustainable solutions and technologies.
Development of Renewable Energy Solutions: Investing in renewable energy sources, such as solar-powered warehouses and electric vehicle fleets, presents an opportunity for companies to reduce operational costs and enhance sustainability, driving further market growth.
A real-time business is one that uses trusted, real-time data to enable people and systems to make real-time decisions, Peter Weill, the chairman of MIT’s Center for Information Systems Research (CISR), said at the “IFS Unleashed” show in Orlando.
By adopting that strategy, they gain three major capabilities, he said in a session titled “Becoming a Real-Time Business: Unlocking the Transformative Power of Digital, Data, and AI.” They are:
business model agility without needing a change management program to implement it
seamless digital customer journeys via self-service, automated, or assisted multi-product, multichannel experiences
thoughtful employee experiences enabled by technology empowered teams
And according to Weill, MIT’s studies show that adopting that real-time data stance is not restricted just to digital or tech-native businesses. Rather, it can produce successful results for companies in any sector that are able to apply the approach better than their immediate competitors.
“ExxonMobil is uniquely placed to understand the biggest opportunities in improving energy supply chains, from more accurate sales and operations planning, increased agility in field operations, effective management of enormous transportation networks and adapting quickly to complex regulatory environments,” John Sicard, Kinaxis CEO, said in a release.
Specifically, Kinaxis and ExxonMobil said they will focus on a supply and demand planning solution for the complicated fuel commodities market which has no industry-wide standard and which relies heavily on spreadsheets and other manual methods. The solution will enable integrated refinery-to-customer planning with timely data for the most accurate supply/demand planning, balancing and signaling.
The benefits of that approach could include automated data visibility, improved inventory management and terminal replenishment, and enhanced supply scenario planning that are expected to enable arbitrage opportunities and decrease supply costs.
And in the chemicals and lubricants space, the companies are developing an advanced planning solution that provides manufacturing and logistics constraints management coupled with scenario modelling and evaluation.
“Last year, we brought together all ExxonMobil supply chain activities and expertise into one centralized organization, creating one of the largest supply chain operations in the world, and through this identified critical solution gaps to enable our businesses to capture additional value,” said Staale Gjervik, supply chain president, ExxonMobil Global Services Company. “Collaborating with Kinaxis, a leading supply chain technology provider, is instrumental in providing solutions for a large and complex business like ours.”