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Strategies for Optimization of Food processing Supply Chain
FREMONT, CA: Logistics makes up one of the pillars in the food and beverage industry. It is affected by numerous factors that jeopardize quality or provide fresh foods and sensitive products in the grand scale of volumes.
One Industry, Multiple Facets
The extensively diverse products available in the food industry make it impossible to apply the “one size fits all” solutions. Two examples that explain the diversity are concepts of freshness and shelf life, and their importance in time-to-market.
With the information of what the customer needs, and conditions it operates under along with the expectations of end consumers, the design for the warehouse can be finalized. The factors that affect the specifics of a warehouse to be built are the type of facilities, warehouse technology, and distribution plans. The impacts of the distribution strategies are also dependent on the kind of warehouse, variety of products stored like a cold chain, connectivity to the nearest port, and the country of consumption. Usually, food industry sources products and manufactures within the targeted country to be supplied.
The two significant differences with the food industry, which separates it from others, are the point of manufacture and the point of sourcing materials.
A Strategy is Key
In terms of positioning of Distribution Centers (DCs), the cost will always play the central role. The increase in the number of DCs will result in a decrease in overall transportation charges. The scale of the companies’ business along with the area of the customer base will determine the scope for DC placements. Private companies that manufacture gourmet products most likely prefer DCs closer to the manufacturing unit as they do not have permanent contracts with the clients.
Labor for Successful Logistics
A primordial decision changing point in the placement of DC strategies are the capacity to source labor.
The seasonal food product demands to be high, the changing requirement to scale up and cut down laborers is a natural phenomenon in the food industry. During the festive seasons, the demand surges creating a need for companies to hire extra workers. Labor in every sector is controlled only by retention, and the campus solution has proven to be ergonomically sound and effective in retaining many logistics workers, who otherwise might have left after the seasonal employment contract.