R&FF: Please tell us a little about Butterball.
Dan DiGrazio: Butterball, LLC offers consumers a branded line of products to celebrate traditional holidays as well as everyday meal occasions. We distribute retail, deli and foodservice products throughout the United States and to more than 30 countries.
Q: How is your logistics group structured?
DiGrazio: Our chief operating officer heads Butterball’s operational group, which includes plant operations, logistics, demand/supply planning and purchasing. Our operational and supply chain structure facilitates communication and involvement for key associates and helps Butterball deliver superior products and services.
Q: Any changes involving your group during 2010?
DiGrazio: Each year, our logistics group defines its strategies and tactics for the coming year. Our “Strategic Initiative of Achieving Operational Excellence” had us studying our network during 2010. As a result, we shifted our Midwest distribution center closer to Chicago. After conducting request for proposals, Butterball awarded its Midwest consolidation business to United States Cold Storage.
Q: How does Butterball approach warehousing and transportation?
DiGrazio: Butterball’s current network includes six manufacturing plants, three distribution centers (managed by both the company and third-party partners) and 10 public warehouses. We run a small fleet but primarily use contract carriers and third parties to manage our transportation spend and service customers.
Q: What were your biggest successes in calendar 2010?
DiGrazio: 2010 was a year of change. We transitioned and shifted product to a state-of-the-art distribution center in Wilmington, Ill. Most importantly, the process worked seamlessly when it came to servicing customers. We also evaluated our transportation management system platform and decided to look for more robust solutions – offering real-time visibility – to manage cost and service.
I consider it a success to reduce logistics costs in such an uncertain transportation marketplace. Moreover, we were able maintain high levels of customer service satisfaction.
Q: What were your biggest challenges last year?
DiGrazio: Transportation capacity was the challenge in 2010. During the second and third quarters, we saw a reduced number of trucks, shifting networks and pricing pressure. Our transportation procurement and operations group utilized TMS technology to solve the transportation issues to meet and exceed our operational goals.
Q: What are a few warehousing goals for calendar 2011?
DiGrazio: We will update our network model and study results to assure we service customers with product deployed at optimum locations. Meanwhile, we will emphasize cost containment in our managed third-party relationships.
Q: How about a few 2011 transportation goals?
DiGrazio: Butterball wants to better understand the costs associated with customer service. We want to ensure that we provide value and identify operational costs associated with business model rules. Our number one goal is to implement a new, more robust TMS solution that will optimize modes of transportation. We expect this to further lower costs through efficient, effective optimization.
Q: What will be the food industry’s critical logistics challenge in calendar 2011?
DiGrazio: Carrier capacity. We’re watching various developments involving the Carrier Safety Administration, hours of service (pending legislation) and even electronic on-board recorders. Collectively, I believe we must find ways to be more time efficient, ensure quality service and capacity – all while offsetting costs.
MEET DAN DIGRAZIOBackground: DiGrazio has more than 28 years of supply chain management experience. In addition to senior food company supply chain roles, he was president of Vector Transportation Services, a third-party logistics company. He also served for seven years as general manager for a Texas steel company.
Education: B.S., Business Logistics, Penn State University; M.S., Commerce and Finance, Villanova University.
FYI: DiGrazio belongs to the Council of Supply Chain Management Professionals and Food Shippers of America. He has served on the board of the Philadelphia Traffic Club and been a featured speaker at meetings sponsored by the International Association of Refrigerated Warehouses and public refrigerated warehouse suppliers.