This article was published in the November 2024 issue of Pet Food Processing. Read it and other articles from this issue in our November digital edition.
Manufacturing operations rely heavily on supply chain logistics to ensure efficiency throughout the production process. Every link in the chain must be connected in order to achieve efficiency and accuracy — from the moment raw materials are acquired through the time end product arrives at its final destination. A weak or inefficient link in the chain can result in inefficiencies, inaccuracies and possibly lost revenue.
“A company’s manufacturing operation is a synchronized chain of activities all bound together by the supply chain,” said Jim Ritchie of RedStone Logistics.
“Logistics in manufacturing is a critical component that influences efficiency, costs and overall performance,” said Jim Ritchie, president and chief executive officer for RedStone Logistics, Olathe, Kan. “For many manufacturing centric companies, it’s very easy to get caught up in maximizing the efficiency and processes contained within the manufacturing environment. However, a company’s manufacturing operation is a synchronized chain of activities all bound together by the supply chain.”
Realizing the essential nature of logistics in the production cycle, processors may choose to employ a third-party logistics (3PL) partner in order to ensure a steady flow throughout the process.
“Pet food processors may not have the in-house specialists and/or time to undertake these types of projects — their focus may be consumed with day-to-day activities to keep the operation running smoothly,” said Brad Prizer, operations improvement group lead for Kansas City, Mo.-based CRB. “If a third party is engaged, a close partnership with a processor’s in-house team is critical. The in-house staff has valuable working knowledge and insight into their specific operations. In partnership, third-party logistics and process improvement specialists can utilize their knowledge from other similar operations as well as their toolset to provide expert guidance with the appropriate level of analysis. Pairing the in-house knowledge with a specialist’s direction can provide great results tailored to the operation.”
While many think of logistics in relation to purchasing, transportation, inventory and warehousing, depending on the operation and the third-party partner, it can mean so much more.
“An effective logistics partner provides comprehensive end-to-end supply chain solutions, including e-commerce and sales channel analysis, transportation management, warehousing, inventory control and order fulfillment,” said Deann Elfering, executive vice president of operations for King Solutions, Inc., Maple Grove, Minn. “These services ensure timely delivery of both raw materials and finished products while maintaining optimal inventory levels.
Packaging is an important component of product distribution, especially when considering fresh or frozen pet food.
|“Partnering with a third-party logistics provider enables your team to focus on business growth rather than daily operations and back-office tasks,” she added. “This shift from working ‘in the business’ to ‘on the business’ frees up valuable time and resources.”
According to Ritchie, the key logistics components of a manufacturing operation should include:
- Inventory management — Storage costs, stock obsolescence and balancing the amount of on-hand inventory is crucial to a well-run operation.
- Transportation and distribution — Ensuring raw materials and finished goods are transported at the right price and at the right time.
- Demand forecasting and production scheduling — Overproduction or underproduction due to inaccurate demand forecasting can lead to waste or missed sales opportunities. Managing lead times, raw material availability and supplier reliability all play a role in creating an operation that runs at peak efficiency throughout the process.
- Risk management and contingency planning — Hope for the best, but plan for the worst. Managing risks from natural disasters, political instability and cyber-attacks are all part of an effective rick management program today.
Ground up
With the ongoing growth of the pet food market, many manufacturers are finding the need to increase production. This can lead to facility upgrades and expansions or even greenfield plant projects. Even though it may not seem crucial to focus on logistics during the early planning stages of plant expansions, it’s actually the most beneficial time to factor in logistical elements to the plan.
“When building a new facility, logistics must be a top priority,” Elfering said. “A well-defined sales channel plan, along with a distribution and transportation model that includes transit times and associated costs, are essential components. The facility’s location and fulfillment operations should be central considerations, as they directly impact inventory level requirements, and the space needed to support operations effectively.”
Manufacturers need to consider plant location in relation to ingredient procurement, proximity to distribution networks, warehousing capabilities, and even ease of transportation in and out of the location.
Transportation is a key component of logistics, but there’s so much more.
|“Ideally, it starts early in the process. In fact, you should engage your logistics experts to help determine where to establish a new facility,” Ritchie explained. “A supply chain network analysis will take into account many factors affecting the efficiency of a company’s operation, and their ability to serve their customers in the most cost-effective way. Factors such as transportation costs, labor availability and cost, road systems, and complementary demand in the same geographic area are just a few.”
CRB’s Prizer echoed the need for early logistics planning.
“Logistics should be addressed as early as possible,” he said. “Understanding the proposed operation is key to developing a new facility layout that will successfully achieve business goals while creating efficient process flows, minimizing process waste and providing operational flexibility as needed. It is critical to understand business goals to quantify resource requirements (equipment, utilities, people, etc.) and develop an efficient layout.”
Problem solving
In the past, many logistics providers focused solely on their core capabilities — namely, transportation, distribution and storage. However, many of today’s logistics partners go beyond those core proficiencies and provide additional solutions.
As an engineering, architecture, construction and consulting firm, CRB offers solutions to manufacturers to help streamline operations on and off the manufacturing floor. Some of those offerings include:
- Simulation modeling — This involves modeling operations including a deep analysis into one operation or modeling all operations within a facility. Simulation models can incorporate variability inherent in the process to identify operational bottlenecks, identify and quantify improvement opportunities, and perform “what-if” scenarios.
- Value stream mapping — This tool can be applied to identify improvement opportunities to create a potential future state process map to increase process efficiency, minimize process waste and reduce lead time.
- Spaghetti mapping — This identifies and maps the flow of materials and/or people and frequency of movement, allowing pet food processors to quantify travel distance and time. Spaghetti mapping can also be used to evaluate the feasibility of automation.
- Inventory profiling — This analysis allows pet food processors to evaluate current inventory practices, as well as quantify storage requirements for a new facility.
- Storage and material handling equipment analysis — This analysis evaluates potential storage and material handling equipment options that best suit the operation. It also provides a comparison of various options including capital costs, operational costs, layout and space considerations, and operational benefits and considerations.
“RedStone is a ‘solution’ based 3PL,” Ritchie explained. “This means we look at problems wholistically, focus on solving the problems we can see, and discovering the ones that are a little less evident. A good solutions-based provider doesn’t ask about a single shipment, but asks about your processes, your network, your challenges and tries to bring value across a number of functional areas of your business.”
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