Develop a Customized Supply Solution — Your Way
“Executive Insights” produced by Retail Leader
Issue 3, March 2014
Even as the overall economy creeps back to a “new normal,” the challenges of providing top quality fresh products to shoppers show no signs of abating. Well-informed, empowered consumers are likely to become even more sophisticated in their demands for perishables as the market evolves to accommodate them.
Retailers are also facing competition from new sources aggressively catering to consumers’ desires for a variety of fresh foods. Amazon, convenience stores, home delivery and other options are all making it easier for consumers to satisfy some of their perishables needs without setting foot in a grocery store.
“As is evidenced in [PricewaterhouseCoopers’] most recent global survey of changing consumer buying trends (www.pwc.com/totalretail), shoppers around the world are embracing the online marketplace and looking for new ways to leverage their purchasing power,” says Jeffrey L. Holmes, managing director, PricewaterhouseCoopers LLP.
In addition, supermarkets are finding they need to devote increasing resources to reacting and responding to the many outside factors that impact both their customers and their suppliers: growing demand for natural/organic products, uncertainty about GMOs, SKU proliferation, changing food safety regulations, and distribution and supply chain technology advancements, among others.
Maximizing your resources
In this kind of competitive climate, “consumer goods manufacturers and retailers must focus their attention on enhancing the customer experience and building the organization’s brand,” says Holmes. “Outsourcing a supply chain, when done properly, can help organizations do this. It can, for example, reduce the amount of capital and overhead needed. It can give organizations the boost they need to communicate their message to a wider audience of potential customers while also ensuring that current customers keep coming back–a win-win proposition on every front.”
In fact, the percentage of shippers who are increasing their use of third-party logistics services has risen from 65 percent to 72 percent, according to the 2014 Third-Party Logistics Study (www.3plstudy.com), which includes companies in the retail, food and beverage, and consumer products industries. Shippers who were surveyed also reported average logistics cost reduction of 11 percent, average inventory cost reduction of 6 percent, and average fixed logistics cost reduction of 23 percent.
“Over the years, third-party logistics companies have become a critical component of progressive modern-day supply chains,” says Rick Blasgen, president and chief executive officer of the Council of Supply Chain Management Professionals (CSCMP). “Companies can utilize this core competency as a way to take advantage of consolidated inventories, for more efficient transportation, to access services downstream to add value to products and to customer experiences, and also to spread out their seasonal and volatile volume periods, as they take advantage of moving what once was a fixed cost to a variable cost component.”
To reap the full economic benefits of outsourced perishables distribution, it’s important to utilize a third-party provider with specialized expertise, technology and resources for the retail food market. In fact, “experience in the shipper’s industry and an established relationship” are among the most important factors for shippers when they select a third-party logistics partner, says Shanton J. Wilcox, vice president, supply chain management for Capgemini Consulting, a sponsor of the 2014 Third-Party Logistics Study. “Shippers continue to value the agility, flexibility and overall effectiveness of 3PLs, and the customer considers the 3PL’s ability to continuously improve as the most important factor when selecting a partner.”
The benefits of experience
Burris Logistics, one of the largest temperature-controlled logistics providers in the nation, moves millions of cases each week to major supermarket/retail operators. From tracking merchandising to providing transportation, Burris Logistics supports the needs of producers and retailers of perishable food products with nearly a century of perishable supply chain experience.
As an asset-based company, Burris Logistics is committed to acquiring the facilities, fleets and equipment necessary to meet each retailer’s needs and ease their capital requirements. The company offers multi-temperature, climate-controlled warehouse solutions including existing and built to suit facilities, along with a company-owned and managed transportation fleet. In addition, Burris Logistics partners with contract carriers to facilitate shipments nationwide.
The Burris Custom Retail Distribution team learns about each customer’s unique requirements and then designs a customized program that can evolve as needs change. It’s a transparent relationship offering all the benefits of self-distribution without the headaches. Retailers can cost-effectively maintain a high level of control throughout the supply chain, managing vendor relationships to the desired extent, while Burris Logistics handles procurement, warehousing and transportation.
“Our purpose is to design a highly customized solution that delivers a competitive advantage for our customers without compromising the bottom line,” says Christopher Turk, vice president, business process re-engineering, Custom Retail Distribution, Burris Logistics. “The focus of our design effort is to develop fully integrated, cost-effective supply chain solutions that make inventory available when and where our customers need it.
“Our cost control is highlighted by the use of LEAN methods that leverage the use of network optimization, engineered labor standards and high-performance work teams,” he adds. “The Burris culture of innovation and continuous business process engineering have fueled our ability to adapt and evolve our value-added solutions to continue to deliver competitive advantage over the long haul.”
Historically, retailers have really had only two viable choices for perishable distribution. They could receive delivery through a wholesaler, where control is limited and the true cost of product and distribution can be a little cloudy. Or, they could put together a self-distributing perishable supply chain, which requires a tremendous resource load to assemble the knowledge, systems, physical infrastructure and regulatory compliance expertise needed.
At Burris, we have combined our many decades of experience as both a wholesaler and a 3PL to offer a third solution that we call Custom Retail Distribution. It allows us to create dedicated, highly customized supply chain solutions that put the retailer completely in control and provide clear visibility for both product and distribution costs. This frees up the retailer’s financial and human capital to focus on creating a compelling shopping experience for the customer while Burris handles the procurement, warehousing and transportation responsibilities.
— Donnie Burris, CEO, Burris Logistics
Based in Milford, Del., privately held family business Burris Logistics is one of the largest temperature-controlled logistics companies in the nation, with facilities serving America coast to coast. The Burris family’s commitment to exceptional customer service and a culture of honesty and integrity goes back five generations to the company’s founding in 1925. Today, Burris continues to expand and evolve, constantly reviewing its operations to ensure that what its customers need will be on time, in stock and accurate. Burris uses advanced technology to drive down costs at all levels of the business, making it easy for technologies to meet and connect on virtually any platform and environment.