Wednesday, December 31, 2014

Continue reading the main storyShare This Page
BURLINGTON, Vt. — Move over farmers' markets. More than 300 food hubs around the country are also providing small farms another outlet to sell locally raised food to consumers.
There's no one model for a food hub — it depends on the market, the location and what it is grown in that area. Some collect food from farms and dole it out to customers in weekly deliveries. Other hubs help consumers, restaurants, colleges and institutions to source food online. But producers, consumers and experts all say food hubs have an important thing in common: it's an efficient way to get locally raised food to those clamoring for it.
"We've seen in the last few years in particular as local and region food systems have grown and become not only larger but kind of more sophisticated that there has been a need for sort of the logistics of moving food from the field to the consumers. And food hubs kind of fill that space," said Doug O'Brien, deputy undersecretary for rural development for the U.S. Department of Agriculture. The agency spent about $25 million from 2009-2013 supporting food hubs.
The number of food hubs has doubled over the last six years, and many are in urban areas, with the Northeast leading the way. Some operate as nonprofits, others are for-profit or producer-consumer cooperatives. Some are modeled after CSAs, or community supported agriculture, where consumers pay up front for food throughout the season.
That's how the Intervale Food Hub in Burlington, Vermont, works, with 30 farms, 15 specialty producers and 1,100 members who pick up their weekly bundles at various sites around the city. The venture started in 2008 with just 192 members and 24 farms.
Legal secretary Betsy Bourbeau says the food hub's deliveries to her place of work are more convenient than shopping at farmers' markets and cuts down time at the store.
"I spend much less time looking at grocery sales, clipping coupons, driving around town and finding parking. I just bring home my food on Wednesday and figure out what to make," said Bourbeau, 50, who gets produce, bread, cheese, eggs and specialty items for about $38.50 a week — less than she would spend at a farmers' market.
For farmers, food hubs provide distribution, marketing and, in some cases, processing and storage.
Predicting what will sell at a farmers' market is a challenge, according to Ray Tyler of Rosecreek Farms in Selmer, Tennessee. By getting involved with the Bring It Food Hub in Memphis, Tyler can plan ahead for the next growing season, when the hub plans to double its membership to 400.
"Basically instead of us spending all this time on marketing, we can now spend more time doing what we love to do and that is growing great food," he said.
The emerging business model can be challenging, says Bring It Food Hub operations manager Alex Greene, because you have to cater to customers and be flexible with farmers, whose product is at the mercy of weather. Food hub leaders need "a sense of the end product" and have to learn the logistics, plus "managing the website, the online credit card system and other technical matters," Greene said.
To that end, the University of Vermont is starting in January what it says is the nation's first Food Hub Management Certificate Program.
"Many food hubs are up-and-coming businesses with staff who need further training or experience," Cynthia Belliveau, dean of Continuing and Distance Education, said in a news release. "High-quality staffing is one of the greatest challenges food hubs face, and it's also a key contributing factor to their success."
One of the two farmers' markets that Josephine and Randy Alexander of Tubby Creek Farm in Ashland, Mississippi, had planned on selling at fell through this year, but they were able to sell most of the extra produce to the food hub.
The Alexanders are currently planning ahead for their next season's food hub offerings — carrots, salad turnips and lettuce mix.
"It simplifies it a little bit for us and that way we can do more of those things that we do really well, in targeted way," she said.

Is In-Store Pickup Any Faster Than Just Shopping At The Store?

(Molly)
For years, an increasing number of retailers have been pushing their “buy online, pickup in store” (BOPIS, for all you acronym lovers) option as a expedient option that offers the convenience of online shopping without the hassle of having to search the aisles. But is it really any faster than traditional bricks-and-mortar shopping?
The folks at StellaService recently put this idea to the test at 11 of the country’s biggest retailers offering BOPIS — Best Buy, Home Depot, Lowe’s, Macy’s, Nordstrom, Office Depot, Sears, Staples, Target, Toys ‘R Us, and Walmart.
At each location, shoppers made a BOPIS purchase and bought the same item in the traditional manner.
In terms of the amount of time spent in the store, BOPIS did seem to speed things up a bit, with the average BOPIS shopper only needing 5.4 minutes to reach the cashier, compared to 7 minutes for standard shopping.
Office Depot was the most expedient BOPIS retailer, with shoppers only needing 2 minutes. The fastest traditional shopping was at Target, where shoppers were in and out in 3.5 minutes.
On the other end of the spectrum is Home Depot and Macy’s. Each clocked in at 8.5 minutes for a BOPIS purchase. At these retailers and at Nordstrom, traditional shoppers were actually out the door faster.
The slowest time in the entire survey was Sears, where it took more than 16 minutes for the traditional shoppers to check out.
But the in-store pickup aspect is only part of the process. When you factor in the wait time for BOPIS customers to receive confirmations that their order was ready, a more complicated picture arises.
The average wait time for a confirmation was just over an hour, reports StellaStervice, with Macy’s and Sears each taking at least 140 minutes to let BOPIS shoppers know they could do the PIS part of their transaction. In such cases, most people could easily have driven to the store and done their shopping faster.
But then there were stores like Best Buy and Lowe’s that only needed 10 minutes to confirm a purchase was ready to be picked up. That’s fast enough for customers to place an order, hop in their car and have it be ready when they arrive at the store. Others like Home Depot (25 mins.), Staples (28 mins.), and Toys ‘R Us (30 mins.) might be okay for those with longer drive-times to the store.
Of all the stores in the survey, only Home Depot allowed customers to schedule their pickup time.
Okay, so you have an idea how far ahead in advance you need to order, and how long it will take you to get through the store. But what about actually finding the in-store pickup counter?
Several retailers — Best Buy, Target, Lowe’s among them — had specific counters visible from the entrance for in-store pickup.
And while it might take longer than traditional shoppers for a Nordstrom BOPIS customer to get in and out, that’s probably because the department store lets customers do in-store pickup at any counter. That’s convenient — not having to search a massive, multi-floor store for customer service — but it also means you’ll have to wait for the item to be delivered to wherever you are.
Finally, things can get complicated when you’re finalizing that BOPIS purchase. Shoppers who placed their orders online ended up spending the majority of their time (3.1 minutes) at the store at the cashier. However, it only took about 1 minute for standard shoppers to pay.
What isn’t in doubt about BOPIS is that it offers the one thing that traditional shopping doesn’t — some assurance that the item you ordered will be there when you get to the store. Granted, we’ve heard numerous stories of retailers botching in-store pickups and customers finding out too late than an item is out of stock, but in general the process works as planned.

I Tried The $2 Billion Grocery App Instacart, But It Wasn't Better Than Going To The Store Myself

Instacart TeamInstacart
Instacart, a startup that sends personal shoppers to local grocery stores and delivers what you want within a few hours, is getting close to raising a $220 million round of funding that values the company at over $2 billion, Re/code first reported.
I tried Instacart a few months ago when I was living in San Francisco. It's a really popular service there, so I gave it a go when I was testing a suite of other on-demand delivery apps.
Of all the apps I tried, Instacart was the worst. It was the only one that I didn't enjoy.
But before I dive into that, let me show you how it works.
Instacart is an app for your smartphone. You put in your zip code, and Instacart gives you a list of grocery stores you can shop from. In my neighborhood in New York, I can choose from Fairway, Costco, or Whole Foods.
instacart stores appScreenshot
Then you scroll through the app and add items to your cart.
instacart appScreenshot
When you're ready to check out, you choose a delivery window. The big benefit of Instacart is that you can get your groceries within about two hours after ordering. Instacart hires an army of independent contractors who go shopping for you and deliver the stuff to your door in free cloth bags.
Like this happy guy from Instacart's promotional materials:
instacart delivery guyInstacart
But boy are there some caveats!
Instacart can't track inventory from the stores it partners with. So, for example, if you order mixed berry yogurt, but Whole Foods is out of mixed berry yogurt, your Instacart shopper has to call you with alternatives.
"Is peach yogurt OK instead?"
"Is a three-pack of chicken breasts OK instead of a two-pack?" 
"They're out of bananas."
And so on.
When I tried Instacart, my shopper couldn't find a bunch of stuff I ordered. I ended up having to substitute or cancel several items in my order. Even worse, the Instacart shopper interrupts whatever you're doing with a call to rattle off all the potential substitutes. By the time I was finished talking to my shopper, I realized I would've saved more time going to the store and figuring it all out myself.
Instacart says it's willing to work with you if the shopper can't find another item. They'll even go to another store to find what you need. But that just wastes more time.
In New York, I use a service called Fresh Direct, which is its own store and can keep track of inventory. Think of it as Amazon for groceries. You pick a two-hour delivery window and the groceries you order show up at your door. No phone calls. No mess. You just get the stuff you want.
Still, a lot of people prefer Instacart because it lets you shop at the stores you love. If you're loyal to Whole Foods and looking for a Whole Foods exclusive item, Instacart is better than the alternatives. Grocery stores probably like Instacart a lot too because it helps them stay competitive with services like Fresh Direct and Amazon Fresh.
And there's still an opportunity for Instacart to plug into its partners' inventory systems so you know you're going to get what you order.
In the meantime, however, Instacart is an imperfect experience.

Will 2015 Be a Good Year for Supply Chain?

December 30, 2014
By Jim TompkinsWill 2015 Be a Good Year for Supply Chain?
CEO, Tompkins International
2015 has the potential to be a great year for the supply chain. There’s good news and there’s bad news, but it’s how companies approach strategy that will determine supply chain success in the coming year.
The Good News:
  • The Consumer Confidence Index (via The Conference Board) peaked to 93.5 this December, which is the second highest level in 7 years.
  • The University of Michigan’s Consumer Sentiment Index was up to 93.6 in December 2014. This is a great improvement compared to prior years.
  • Employment is on the rise, gas prices are down, and the majority of business leaders are optimistic about 2015.
  • The economy is more stable than the last 5 years and businesses are confident about 2015 growth.
The Bad News:
  • Promotions were over the top for Holiday 2014; this will impact profitability going forward.
  • E-commerce/private label shifts continue, and the future is very different from the past.
  • The consumer is being trained to expect a level of customer service that does not beget company profitability.
  • Amid a segmented economy, more than 65% of all families are in a “survival mode.”
  • Global risks are high and the chances of international supply chain disruptions have increased, from regional conflicts to weather emergencies.
Supply chain leaders are entering 2015 with many of the same thoughts as the past. I hear a lot of folks discussing the same supply chain challenges, such as: customer focus, cost reduction, agility and flexibility, improving inventory turns, operations efficiency, and network planning.
These are all important, of course, but they are all about structure and execution. The reality is that structure is the second step of supply chain excellence and execution is the thirdstep. Unfortunately, pursuing structure and execution before fully grasping strategy will result in a poor 2015 for the supply chain. Strategy must come before structure, and structure must come before execution.
For 2015 to be a great year for supply chain, strategy must come first. You must lay the foundation with strategy. Most importantly, to optimize your supply chain in 2015, continue to ask yourself (and establish the answers to) these questions:
  • What are you going to do about marketplaces?
  • What are you going to do about Asia?
  • What are you going to do about promotions?
  • What are you going to do about omnichannel?
  • What are you going to do about getting local?
  • What are you going to do about channel management?
  • What are you going to do to grow?
  • What are you going to do to provide benefits to your costumers?
  • What are you going to do to beat marketplace expectations?
Please don’t jump into the “structural trap” of the past. Answer the strategic questions listed above and then with this strategy move on to structure.

Year in Review: Top materials handling news in 2014

Big acquisitions, an improving economy and some new 

players change the landscape heading into 2015. By 

Modern Materials Handling Staff



$3.45 billion-dollar deal includes 4,500 employees across the world.
FedEx to acquire Pittsburgh-based 3PL GENCO
GENCO has annual $1.6 billion in annual revenue and operates more than 130 warehouse locations comprising more than 38 million square feet in North America.
NACCO Materials Handling Group acquires Nuvera Fuel Cells company
Hyster Company and Yale Materials Handling Corporation add another alternative energy to their portfolios.
Toyota Industries Corporation to acquire the forklift business of Tailift
Serving primarily China and Taiwan, Tailift produces 28,000 forklifts annually.
Research and markets
Survey asks: Need for green or need for speed?
Consumer preferences suggest businesses should reconsider chasing the Amazon model.
Study: ‘Staggering’ 83% of CEOs believe supply chains are not up to omni-channel challenges
Survey indicates optimized supply chains have 15% lower costs, less than half the inventory and more than three times shorter cash-to-cash cycles.
Global material handling products primed for strong gains through 2018
Global demand for material handling products is projected to increase close to 5% annually through 2018 to $140 billion.
New survey shows keys to recruitment of women to manufacturing sector
Among more than 870 women surveyed, 80% of those in manufacturing say that their work is interesting and challenging. Half of women in manufacturing say that compensation is the most significant benefit of the sector.
RFID market to reach $9.2 billion in 2014 and more than triple in next decade
That figure is up nearly 32% from $6.98 billion in 2012. Despite growth in active RFID and real-time locating systems (RTLS) systems, research suggests RFID has penetrated only 7% of the addressable apparel market.
Research suggests near doubling of logistics robot market by 2020
Sales of robots for palletizing, logistics, packaging, and materials handling are projected to grow at a 10.1% CAGR and reach $31.3 billion by 2020.
In other news
ALAN seeks donations to stop spread of Ebola
American Logistics Aid Network mobilizes logistics partners to deliver supplies to difficult-to-reach areas.
2015 Third-Party Logistics Study takes deep dive into omni-channel supply chain
A study of 770 shippers and logistics services providers in North America, Europe, Asia-Pacific, and Latin America suggested factors driving the pursuit of omni-channel capabilities include customer service (32%), service levels (23%) and freight costs (11%). About a third indicated they are not prepared to handle omni-channel and 2% consider themselves high performers in the space. Half said they are currently testing or investing in new fulfillment strategies to spur omni-channel network growth. 16% are using or considering local store home delivery, and 15% are doing or planning Sunday delivery.
Modex 2014 sees record attendance
Attendance was up 15% over the first Modex in 2012; floor space jumped 28% to 230,000 square feet.
Supply chain: the top five stories of 2014
From cat faeces to cosmetics, blood diamonds to palm oil, here’s what was most read over the last 12 months
 What will 2015 bring to the supply chain? Photograph: Alamy
Tuesday 30 December 2014 07.30 EST
Workers processing bananas at a Dole banana plantation in Costa Rica

The supply chain hub has explored a fantastic range of topics this year, as the five most read stories of 2014 demonstrate.
Scott Poynton’s feature on deforestation looks at the huge potential for a more sustainable global food system as palm oil giants such as Wilmar and Reckitt Benckiser make “no deforestation” commitments. Only time will tell what impact these have.
In another brilliant read, coffee expert Tony Wild delves into the dark world of civet coffee before going on to describe the more positive steps being taken by Rarefied, a company enabling habitat and biodiversity conservation, and smallholder education and income, through its production of guaranteed wild civet coffee.
Food and drink aside, Erin Switalski examines the weak government regulations doing little to prevent women from being exposed to serious chemicals found in cosmetics – including those linked to breast cancer, hormone disruption and reproductive problems - while David Rhode looks at the certification scheme for diamonds that’s doing more harm than good.
As for Apple, is it cleaning up its act on labour rights? Have a read of Duncan Jefferies’ piece to find out more. 
After years of lobbying the world’s largest palm oil company has promised to end deforestation and exploitation - will it set a new threshold for responsible food production?
Coffee derived from the faeces of the civet cat has spawned a cruel industry. Will sustainable production leave a better taste?
US law gives regulators little power to prevent companies using harmful chemicals in everyday products
Tough production schedules and slim margins lead to poor labour conditions in the electronics industry. Duncan Jefferies asks if progress is being made
We need a new system to force the jewellery industry to promote ethical mining and gem trading techniques
Tomorrow starts a new year.
It will take me a while to adjust. Intellectually, while I will know the year has changed, I will screw up, time and time again, by writing 2014 on documents for many, many months. For me tonight, sitting facing the city skyline in the dark,  2015 sounds so far in the future; but, I know that it is on the horizon.
I take the years that end in the numbers five and zero a bit more seriously than other years. These are a mark in time, a rite of passage, and a good time to reflect. When 2015 rolls in, for me, it will mark a decade of quantitative research focused on understanding the evolution of supply chain management. So, in this blog, I would like to reflect on what I have learned in this process.
Insights on Supply Chain Organizations
In the early years, there were no supply chain organizations. I like many other gray-haired supply chain professionals reported through a functional organization like manufacturing or transportation. For me, it was manufacturing. I proudly wore my red hard hat, yellow jumpsuit and tan safety shoes in a world of rhythmic machinery and constant manual scheduling. I loved to open the doors of the factory floor and hear the hum of production. I liked belonging to an organization that made things. It was a special club. This all changed.
In the mid-1980s, leaders like Colgate, Intel, and Procter & Gamble defined supply chain organizations where source, make and deliver functions reported through the same organization, and had a common leader. Today, we know that when these organizations defined  with a focus on end-to-end processes there was better alignment, agility and resiliency in balance sheet results. They were pioneers: the exception, not the rule.
For the majority of companies, the supply chain organization is now 15-years old. It has seven functions reporting through the supply chain leader. The reporting of manufacturing and procurement organizations through the supply chain leader has the probability of the flip of a coin. There is only a 50% chance that manufacturing or procurement are one of these functions reporting through the supply chain organizations. Even today, most organizations are still very functionally defined. We are still very early in the definition of end-to-end supply chain excellence.
However, ever so slowly, things are changing. Today, roughly one in three companies have a Chief Supply Chain Officer (CSCO). While these positions look very different—varying by culture and structural definition—we can clearly see supply chain is rising in importance. There was no CSCO in the 1980s or 1990s. They first appeared on the scene in 2005. Today, the role is growing in stature and acceptance.
SC by the Numbers_Alignment 2013
To drive progress, one in three companies also has a supply chain center of excellence. Organizational success is not guaranteed. Today, only slightly more than 50% rate these organizations as effective. Why? At first these numbers surprised me. I thought that they would be higher. So, we started digging into the research to gain an understanding. In our studies, we found that it comes down to the tug of war between functional excellence and the definition of end-to-end processes. They are quite different, and many companies have not defined supply chain excellence sufficiently to enable success.  In addition, we find that the center of excellence will fail if:
  • There is not the right balance between push and pull. The highest rated supply chain centers of excellence let themselves be pulled into the business based on business demand. They do not make the mistake of forcing themselves on business leaders.
  • It does not serve the business. Many supply chain centers of excellence become academic and irrelevant.  To be successful, the center needs to serve the business and help to align tactics to achieve business strategies.
  • Cannot stay relevant. The center of excellence must have a stake in the game and carry a portion of the business goals. It cannot be relevant if it is a part-time, or understaffed, superfluous organization.