Cold Supply Chain & Logistics: On the right track
Refrigerated & Frozen Foods honors poultry, potato processors for green supply chain achievements.
At first glance The H.J. Heinz Co. and Butterball LLC appear as different as potatoes and poultry – and as opposite as the Northwest and Southeast.
Yet both companies have reduced their supply chain carbon footprint and that common commitment brought them awards from Refrigerated & Frozen Foods. Recognizing food companies’ increased interest in corporate sustainability programs, R&FF took a “green” approach to its own annual award for supply chain performance.
This spring, the magazine asked cold food processors and third-party operators to submit nominations, including examples of processors’ (1) supply chain network optimization, resulting in fewer over-the-road miles; (2) trailer-to-rail conversion, resulting in fewer over-the-road miles; (3) refrigerated truck/trailer enhancements; reducing fuel / or emissions and (4) product repackaging, resulting in more packages, cases and/or pallets shipped per truckload.
Industry feedback brought two exceptionally strong nominations: one reflecting national turkey processor Butterball and its warehouse optimization efforts; and a transportation-related play involving Heinz North America’s rail program for Ore-Ida potatoes.
Speaking at the Food Logistics Forum this June in Denver, R&FF Editor Bob Garrison presented the magazine’s first “Sustainable Supply Chain” awards to Dan DiGrazio, Butterball’s director of logistics; and Matt Stalter, group leader, transportation for Heinz North America.
The Food Logistics Forum (FLF) is a cold food supply chain executives’ meeting co-sponsored by the American Frozen Food Institute and the Global Cold Chain Alliance. R&FF asked award winners to discuss their organizations’ year-over-year actions and achievements.
DiGrazio spoke about applying Butterball’s corporate sustainability program (“Do Business Right”) to supply chain activities. He noted that Butterball’s four-year-old green program focuses on simple themes of “reduce, reuse and recycle.” For the record, this Garner, N.C.-based company operates six turkey processing plants in Colorado, Missouri, Arkansas and North Carolina.
In a post-convention interview, DiGrazio tells R&FF, “Our sustainability team works to ‘do business right’ in a manner consistent with protecting the environment. We do this through energy conservation, feed and antibiotic conservation, pollution prevention, recycling programs, waste elimination and continual improvement of our environmental practices.”
DiGrazio says logistics officials adopted three key initiatives following a 2010 first-quarter baseline study of Butterball’s supply chain network.
“The analysis indicated that there was an opportunity to decrease cost and improve sustainability by locating closer to customers and our manufacturing plants,” says DiGrazio. “In part, this optimization program resulted in a fourth-quarter (2010) shift of our Midwest distribution center (north and west) from Indianapolis to Wilmington, Ill. Overall, our efforts cut distribution by about 355,000 miles; reduced diesel use by an estimated 71,000 gallons; and decreased CO2 emissions by 738 tons.”
A second initiative involved a 2010 second-quarter upgrade to in-house transportation management. DiGrazio says new pilot optimizer programs suggested additional cuts in national over-the-road distribution.
Butterball also addressed transportation and moved a portion of its distribution center truckload replenishment operations to an intermodal rail program. DiGrazio says this shifted 8 million pounds of turkey to rail cars – resulting in 9.5 percent fewer over-the-road miles (equal to about 2.4 million), 480,000 fewer gallons of diesel and an estimated 4,987 fewer tons of CO2.
For the record, Heinz North America is the name behind a wide variety of products, such as Weight Watchers Smart Ones frozen entrees, Ore-Ida frozen potatoes and Bagel Bites frozen pizza snacks.
In this case, R&FF recognized the Ore-Ida frozen potato business, which ships its frozen finished products on temperature-controlled railcars from Ontario, Ore., (near Idaho border) to regional, forward distribution centers nationwide. From there, Heinz works with third-party warehouse partners and over-the-road carriers to service retail customers.
Stalter notes that – as long as three to four years ago – logistics group officials began scrutinizing inventory and production strategies to better utilize the company’s fleet of private, leased frozen railcars.
By 2010, it was time to act and throughout the course of that year, Heinz increased the rail share of its forward-deployed volume by 20 percent.
“The largest win for Heinz was utilization of the private, leased rail cars,” says Stalter. “In prior years, Heinz’s fleet was underutilized while trucks were flowing out the doors. Obviously, fleet utilization is a better use of transportation dollars than shipping via truck. The journey culminated last year with one of the largest, year-over-year improvements.”
Stalter says Heinz’s frozen potato rail tonnage increased by 33 percent and truck tonnage decreased by the same amount (about 38,000 tons), the company reduced diesel fuel consumption by 50 percent (about 630,000 gallons) and reduced its carbon dioxide emissions by 44 percent (about 6,400 tons of CO2).
Heinz estimates that its shift in product deployment transportation took as many as 2,000 trucks off the road.
“We did not eliminate all truck shipments,” notes Stalter. “There are still trucks on the road – albeit at a reduced rate.”
Call for 2012 nominations
Know a cold food processor reducing its supply chain carbon footprint? Refrigerated & Frozen Foods already is thinking about next year’s award for a refrigerated or frozen food processor-shipper. R&FF welcomes 2012 award nominations from processors as well as third-party logistics, warehousing and/or transportation suppliers. Call Editor Bob Garrison at (574) 935-3724 or email firstname.lastname@example.org for details.
Green Supply Chain Honoree: Butterball LLC
Profile: This Garner, N.C.-based company is the nation’s leading retail, deli and foodservice turkey processor-supplier with six plants.
Actions: Butterball reviewed and optimized warehouse and transportation networks. It also moved 8 million pounds of over-the-road product to an intermodal program. Warehouse optimization plan resulted in a move to Wilmington, Ill., from Indianapolis.
• Warehouse optimization cuts annual distribution by 355,000 miles; saves 71,000 gallons of diesel and an estimated 738 tons of CO2.
• Overall transportation optimization cuts over-the-road mileage by 9.5 percent or 2.4 million miles. This equates to approximately 480,000 fewer gallons of diesel and 4,987 tons of CO2 saved.
Green Supply Chain Honoree: Heinz North America
Profile: Part of H.J. Heinz Company, Heinz North America, Pittsburgh, Pa., processes and markets such items as Weight Watchers Smart Ones frozen entrees, Ore-Ida frozen potatoes and Bagel Bites frozen pizza snacks.
Actions: Heinz altered its forward distribution program and increased use of its private, leased rail cars by 20 percent
Achievements: Heinz boosted rail tonnage increased by 33 percent and truck tonnage decreased by the same amount (about 38,000 tons). It reduced diesel fuel consumption by 50 percent (about 630,000 gallons) and reduced carbon dioxide emissions by 44 percent (about 6,400 tons of CO2).