Cold Supply Chain & Logistics: Executive insights
Refrigerated & Frozen Foods talks with Rich Products Corp.’s Michael Welker, vice president of customer service and logistics / material management. Rich, Buffalo, N.Y., is a diversified processor supplying all channels. Its frozen product line includes bakery foods (desserts, sweet goods, bread and rolls), pizza products, barbeque meats, non-dairy toppings and icings (Rich’s), appetizers (Farm Rich), prepared shrimp and seafood (SeaPak) and Italian specialties.
MEET MICHAEL WELKER
Background: Almost a 30-year company veteran, Welker began in customer service and logistics before moving into operations (Rich’s Buffalo, N.Y., non-dairy facility). Then he held materials management staff and leadership roles. After assisting with Rich’s enterprise-wide transition to SAP, Welker helped optimize supply chain processes and ERP rollout to additional plants. He later served as a leader in Rich’s global procurement. Welker also assists with acquisition diligence and integration leadership.
Education / training: Bachelor’s degree (Industrial Technology), State University of New York at Buffalo.
R&FF: How is your North American supply chain-logistics department structured?
Michael Welker: Our team looks at the entire North America business as one service requirement, not by division. This allows us to balance and optimize volume and service and manage costs across the entire group. It helps that there’s a natural seasonality for various sales divisions. They tend to be at different times and that helps balance the volume we manage at any one time.
We are excited about our recent acquisition of Celebration Foods (a New Britain, Conn., ice cream cake processor). This company has a world-class plant, products and associates. They also have an extremely efficient direct store distribution (DSD) system. Moving forward, we will look to identify synergies across our supply chain so we can enhance customer service and value.
R&FF: How do you handle warehousing and transportation?
Welker: Rich’s does not own any warehouses, unless they are attached to a manufacturing location. These locations facilitate high-volume consolidation and truck-load order business. The company does use a network of 3PL providers to support regional needs. We also use additional warehouse locations to support customer programs or added regional services.
Here in Buffalo, Rich’s has a great group of associates to help manage transportation. We also work with Lean Logistics, Holland, Mich., for its transportation management software. We primarily transport product with asset-based carriers because our volume involves truckload and multiple-stop truckload activities.
R&FF: What were a few successes last year?
Welker: We had several successes last year. First, the team worked extremely hard to improve costs – primarily through better load utilization and on-time delivery. We exceeded expectations in both areas.
We’ve seen an escalating increase in rate requests. Our team worked through many of them by aggressively bidding our lane business and changing routing guides. This area saw more change in 2010 than in past years, so I’m proud that our associates responded quickly and diligently.
R&FF: What were a few big challenges?
Welker: Our biggest challenge involved customer requests and expectations as a result of the struggling, inconsistent economy. This forced our associates to think differently about service and cost.
We addressed service and cost issues by aggressively managing truck capacity in some areas. Our associates also rolled up their sleeves and went out into the market to build new, lasting carrier relationships. I don’t think this challenge will go away anytime soon, so we need to continue to pursue opportunities that help us provide even better customer solutions.
R&FF: What are a few calendar 2011 goals?
Welker: Our goals include increased turns and investment in the right inventory – to best serve our customers. We also have goals related to product obsolescence and/or spoilage and we want to exceed our targets (for reductions in both areas).
R&FF: How about a few frozen business transportation goals?
Welker: First and foremost, we need to maximize truck shipments to highest practical levels. This is a challenge for because we have such a large portfolio of products to fit such a variety of customer needs. We also will look to optimize Celebration Foods’ DSD system. Last but certainly not least, we’ll strive to reduce mileage to offset escalating fuel costs.
R&FF: In your opinion, what will be the frozen food industry’s most critical logistics challenge in calendar 2011?
Welker: The biggest obstacle will be to manage through regulatory changes that will significantly impact our business. As I mentioned earlier, fuel costs will continue to be a challenge in 2011 and we also face obstacles in other service and cost arenas.