What is the importance of temperature controlled supply chains?

A temperature control supply chain is a large proportion of the retail food market and it continues to grow. The frozen food market in the UK continues to rise by around 3-4% each year as it has done for the last 40 years. In the US, half of the food spend on the supermarkets are for products that need to be temperature controlled. Further developments in prepared salads and convenience foods have also increased the market.

There has been an increase in the amount of products that need to be temperature controlled for the retailers and consumers. Failing to store and transport goods in a temperature controlled environment leads to risks and reduces the shelf life of a product. Wastage can create problems in the supply chain and increase costs.

The supply chain has been transformed thanks to technology and by the changes in location sources for products and removing wholesalers from the chain. More retailers have expanded their chains to outside local areas and many are dealing with national and even international supply chains for their goods and their customers. Products are now sourced internationally to satisfy demands for foods that are seasonal and unavailable all year round from the local market. Developments in the temperature controlled supply chain mean international and national sources can be used to satisfy demand and ensure quality for the customer.

Food safety is now a priority in the supply chain. There are extra costs to consider, caused by the handling requirements, storage and monitoring the temperature of the supply chain. Failures in food safety do occur and they are most common at local or individual levels. Food scares such as listeria and salmonella and chicken or E Coli in meat raise concerns and decrease confidence in the consumers. This is why the temperature controlled supply chain along with risk assessments play such an important role in food safety legislations. 

What is a temperature-controlled supply chain?

Some food chains required a temperature controlled environment for their products. The temperature control is used to stop exposure to temperatures that could cause issues for the product. A temperature controlled supply chain is complex and it can be expensive too.

The challenges that need to be overcome by the supply chain are determined by the source and nature of the products as well the quality assurances legal requirements of food safety for the products. Additional complexities are determined by the distribution facilities that are available from through the chain, from production to consumption.

Food temperature levels vary between products, for example:

• Frozen varies from -18° for foods and ingredients excluding ice cream. Ice cream needs to be -25°
• Cold chill is - 0° to +1° and used for most vegetables and some fruits, fresh meats and poultry, dairy and meat products
• Medium chill is +5° which is used for fats, cheeses, some pastries and butters
• Exotic chill is +10° to 15° which is used for potatoes, exotic fruits, bananas and eggs
  

Failing to meet the required level of temperature for food products can shorten the lifespan and have negative effects on the quality of the products and even make them unfit for consumption.

What are the safety needs on choosing the warehouse? The checklist - Part 2

Last week, we looked at the first set of safety needs a warehouse must have. Today, we will continue our look at the basic safety needs to check for before choosing the warehouse to ensure it is a safe place to operate.

Dock Safety

Docks are very busy parts of the warehouse. Injuries can occur easily and there are risks including lift trucks falling, from equipment and products falling and hurting anyone in the area. Fires are other hazards to be aware of. The area should be organized and clean-up plans in place for chemical spills.

Machine Guarding

Reduce the hazards by safeguarding against them using signage, barrier guarding, colour coding and ensuring the machines are maintained. Staff also needs quality training.

Ergonomics

The workplace needs to be designed with safety in mind and for productivity and control. Ergonomics helps workers to move products around the warehouse more efficiently and safely. Ergonomics also reduces the costs incurred by compensation claims from workers suffering from back injuries and injuries caused by repetitive actions.

Manual Handling Products

Manual handling still takes place even in warehouses with powered industrial trucks. Products can easily fall and harm workers and there is a risk of injuries. Training and a safe work area are a must to reduce manual handling risks.

Comprehension Safety Programs

Comprehension safety programs need to be in place as they are essential for running a successful warehouse.

Facility Emergency Plans

The emergency plans need to include handling medical, weather, fire and chemical emergencies. Fire drills should be carried out each year and training provided to employees and supervisors in CPR and first aid.

Chit Chat: What are some Customer Service Tools and Techniques? Part 2

Last week we took a look at some of the customer service tools and techniques that are used. Today, we’ll be taking a closer look at these.

Going Above and Beyond the Call of Duty

Keeping the customer happy sometimes requires employees to go above and beyond the call of duty. This means doing something extra or special that the customers may then feel grateful and even become loyal to the brand. This requires demonstrating your actions.

Acknowledging the Needs of the Customer
It’s important that the customer feels that their needs are being understood. This is true even if it’s not possible for you to meet these needs. You can show understanding through the words you speak, and rephrasing what has been said to you. You might also show understanding by reading their behaviours – noticing a customer is in a hurry for example.

Active listening is also a tool that is used. Show your customer that you are listening and paying attention to them with active listening. Rephrasing is a part of this. 

Arranging Follow-Up

Sometimes the problems cannot be rectified on the spot. In these cases, follow-ups should be arranged and carried through. You must ensure that you explain the actions that will take place between now and the follow-up, you must get back to the customer when promised and you have to follow through on the promises made.

Expediting
You can make customers feel cared for by speeding up processes. Let them know you are moving as quickly as possible and working hard to get things done.

Privacy and Confidentiality
Some customers might feel reluctant to share their information with you. You have to provide an environment where they feel safe and secure. Take steps to ensure the information they share is secure, whether online or in a brick and mortar setting.

What are the safety needs on choosing the Warehouse? The checklist - Part 1

For the warehouse to be safe, it’s important to look for the following before choosing which warehouse to use:

Materials Storage

The materials need to be stored in a safe way so they won’t fall on employees or cause injuries to visitors to the warehouse either. It’s also necessary for the safe use of industrial trucks. Products must also be stored safely to reduce the risk of damage.  Warehouses should be ordered correctly, be neat, tidy and well organised.

Fire Safety

Protecting the building and the workers comes under fire safety and this is a top priority. Some products can increase the risk of fire, such as flammable liquids. There’s a need for sprinklers, emergency plans and extinguishers to help protect against fire risks.

Personal Protective Equipment

Not all risks and hazards can be eliminated. In these cases, protective equipment is used to protect against injuries. Protective equipment includes hard hats, gloves, hearing protection and so on.

Powered Industrial Trucks

Forklift trucks and other power equipment are essential in warehouses as they are used to move products. Many deaths and injuries are caused by forklifts each year. All operatives need to be provided with the correct training and all safety rules have to be enforced. It’s also essential that the equipment is maintained to the necessary standards.

What are the safety needs on choosing the Warehouse?

There is a high need for change in the warehouse industry in regards to industrial safety and injury prevention.  Perhaps the largest area where change is desperately needed is in powered industrial trucks. Approximately 100 employees are killed as a result of powered industrial truck incidents.This figure is on top of over 33,000 plus serious injuries and over 61,000 minor injuries.  Therefore there is a high need for injury prevention.

The cost of storing goods in warehouses continues to increase and it is necessary for the products to be protected while in storage. Damage can occur easily, from many risks including fire, flood or impact from a lift truck for example. Many incidents take place every day and the management has to focus on near misses, damages to property and work to reduce the injuries and to save costs by doing so. 

An investment in safety is necessary. The companies have to come up with health and safety programs and integrate them successfully into their business strategy. In order to achieve this, they need assistance from health and safety professionals, facility engineer, equipment manufacturers and so on. Processes have to be improved in order to increase worker safety.

What are the main e-retailing categories? – Part 2

Today we’re continuing our look at the main e-retailing categories.

DVD Movies and Videos

Many of the same suppliers who sell CDs also sell DVD movies and videos, both online and on the high street. DVD popularity has increased alongside the willingness for consumers to shop online. Amazon, Blackstar, Virgin Mega, WHSmith and HMV are some examples of e-retailers who sell DVD movies.

The costs vary and some retailers shop for free while others still charge.

Groceries

Only 1% of grocery shopping takes place online in the UK. While this is a small percentage, it does equate to around £1billion per year. Groceries are non-durable; they have to be delivered quickly in a way that won’t damage the goods to ensure the quality of the products. The perishable items are also difficult to ship.  The grocery goods have different characteristics making deliveries difficult too. One of the most successful grocery e-retailers is Tesco.

Clothing and Footwear

Clothing is usually chosen based on how it looks fits and feels. This makes it difficult for online shoppers to evaluate online, but it’s still a popular category of online shopping in the UK. Shoppers enjoy the home delivery and many of the e-retailers of clothing began as an extension of their mail order services. Lingerie and hosiery is one of the most popular categories for e-retailing.  The future of e-retailing may involve the body scan.

Shoppers can visit a store for a body scan, which is then stored online and used to help them shop online.  Consumers can also be offered customisation options, as seen from retailers including Nike. Shoppers are able to customise their shoes – but there are issues if the customer wants to return the goods.

What are the main e-retailing categories? – Part 1

The main e-retailing categories are as follows:

• Books
• Music
• CDs
• Online Music
• DVD Movies and Videos
• Groceries
• Clothing and Footwear

Books
In the UK, books are the biggest e-retailing category. 65% of purchases made by online shoppers are books according to research by Ernst & Young.  Books are easy to deliver and the customers know exactly what they are getting when they place an order. Therefore, they score highly on product characteristics, familiarity and confidence and consumer attributes.  Book buyers are normally young and are well educated.  The largest e-retailer of books is Amazon.

Music
The music industry is struggling. The expenditure is falling and consumers think they are charging too much for CDs. Much of the industry blames illegal downloads for the sales slump rather than the cost.  The e-retailing of music has two categories, CDs and Online Music. 

CDs
CDshave been the most popular format since the 1980s. Consumers spend around £80million on albums each year according to the BPI, and 92% of those sales are CDs.  Larger retailers such as Tower Records and HMV sell online but other retailers are offering lower prices, resulting in fierce competition. 

It’s estimated that three times as much music is downloaded online and much of this is downloaded for free. Research shows that around 45% of Internet users in Europe download music and around half of them don’t feel any regret or guilty feelings for not paying for it. You can download music or stream it. ITunes has managed to get consumers to pay to download, charging 99cents for each song they download.  Other companies charge monthly fees for set streaming and downloading and they pay royalties to the musicians. It’s necessary to have a good quality Internet connection to stream music. 

Return tomorrow when we shall continue our look at the main e-retailing categories. 

What are the 7Cs of e-retail mix? – Part 2

Today we’re continuing our look at the 7Cs of e-retail mix.

C5 – Computing and Category Management Issues

Meeting customer’s expectations is what makes retailers successful. Customers want what they want, in the right quantities, in the right place at the right time. Customers now have a lot of choice with some superstores holding tens of thousands of products, even millions of products.  Retail logistics had developed over time. Retailers have taken more control over supply chains and wholesalers control has reduced. Supply chains have become more efficient thanks to computer networks linking the suppliers and retailers.  Modern retailers are using real-time electronic point of sale data while others still use Electronic data interchange that predates the Internet. The link and cooperation between the suppliers and retailers is what increases the efficiency and helps to keep customers satisfied. More retailers are now using the web to improve the efficiency of their supply chains. 

C6 Customer Franchise

Successful retailers with brick and mortar stores have made large investments in providing quality and the best customer service to increase customer loyalty and respect.  Building the trust and value of the image is the customer franchise. Lack of trust is one of the main factors for limiting the growth of e-retail. Many of the brick and mortar retailers have quality brands, the customers understand the brand and know their personality that have been backed by long term corporate retailers.  These established retailers have a head start trading online and the new startups have to work a lot harder to build trust.

C7 Customer Care and Service

Retailing has long been classified as a service industry. In recent years the retailers have been more preoccupied with services offered and service quality. Most retailer activities have a focus on delivering some kind of service to the consumer, making products accessible and offering competitive prices and assortments. All of these activities play a part in keeping the customer satisfied. 

For e-retailers, the quality service meant providing reliable and fast deliveries, at the time that is convenient for the customer.  They provide customers with help online and on the telephone; they provide a way of returning and obtaining refunds.  In the past, e-retailers were poor at providing this level of service and many early online consumers remember their negative experiences. 

Chit Chat: What are some customer service tools and techniques? Part 1

The tools and techniques used in customer service are not as tangible as those used in other trades and professions, but they do exist. The tools and techniques are concerned with what the employees say and do for each of the customers. 

The best customer service providers to fully understand how to use each tool and match the tool to the situation at hand. By knowing the tools and understanding the basics in customer service you can then choose the right tool for the customer service job you are faced with. 

Here are some of the strategies that are used in customer service tools and techniques:

• Going above and beyond the call of duty
• Acknowledging the needs of the customer
• Acknowledging but not encouraging
• Active listening
• Admitting mistakes
• Giving the customer the opportunity to vent
• Saying sorry
• Giving assurance
• Being empathetic
• Bonus buyoffs
• Giving expert recommendations
• ExpeditingReasoning and explain actions
• Agreement points
• Completing on a follow up
• Distraction
• Broken record
• Ending positively
• Setting limits
• Questioning
• Referral to a third party
• Pros and cons
• Giving alternatives
• Probing questions
• Not taking the bait
• Levelling
• Managing impersonal distance
• Referral to supervisor
• Time out
• Telephone silence
• Verbal softeners
• Personalisation
• Voice tone
• Thank you
• Summarising the conversation
• Refocusing
• Privacy and confidentiality
• Empowering and offering choices
• You’re right
• Using timing
• Suggesting alternatives to waiting

The use of the tools mentions cannot guarantee successful outcomes as human interactions are never predictable. What these tools do is to provide a greater chance of increasing a successful outcome for the customers. 

What are the 7Cs of e-retail mix? – Part 1

The marketing mix is the combination of techniques and tools that retailer’s and e-retailers use to give their customers value.  The marketers work on creating strategies that are aimed at increasing customer satisfaction and increasing value for the customer.   Over the past decade there have been several attempts to update the marketing mix. One of these updates has been giving more emphasis on what customers want, known as the 7Cs.  Today we’re addressing the first 4Cs.

C1 – Convenience for the customer

In the traditional marketing mix, place is a factor. Being able to place products where the customers want them to be. In an e-retail, the retailers needs to provide the products in places they want them to be and this is usually on multiple channels. Customers like to be able to buy online or buy in store for example. They also like the ability to buy online but return in store and so on. The C1 also includes being easy to find the websites online, which involves digital marketing, website design, SEO, page layouts and so on. 

C2 – Customer value and Benefits

The product itself can offer benefits and customer value. It includes the serve and customer satisfaction. The customers aren’t only buying the product; they are finding solutions to their problems or making themselves feel good. Therefore the task of selecting the right range of product for the customers is essential.  Customers who buy online are not likely to request as much help making their purchase compared with those who buy instore. E-shoppers often decide not to buy the product if they need help, they will abandon the transaction and look for an alternative product to buy. This is why descriptions are essential in e-retail. It’s vital to provide the customer with plenty of help options that are easy to find and navigate online.

C3 – Cost to the Customer

The cost to the customer includes the real costs that the customer will have to pay, which includes the cost of packaging and shipping, any additional taxes and so on. One of the reasons customers abandons their transactions is finding out the shipping costs at the checkout. Customers do think products should be cheaper online, compared with in-store.

C4 – Communication and Customer Relationships

Communication is basically promotion. Promotion is how the companies encourage people to buy from them but communication is a two-way process. Communication includes feedback from customers to the suppliers. The retailers have better communication with customers compared to manufacturers as they are closer to customers and they can receive more feedback from the customers. Communication includes:

• Emails
• Internet
• Marketing databases
• Public relation
• Surveys
• Marketing research
• Loyalty schemes
• Offline marketing may also be used alongside the online marketing

Reaching the emotional side of selling is also an essential part of customer value and benefits. Customers like to get a good feeling when buying, but this can be difficult for e-retailers to achieve. Face to face sellers can find the emotional needs of the customer a lot easier and work hard to give the customer a tailored shopping experience using emotional cues.  E-retailers have to use the website enhancements to give a good experience to their customers. Faster loading times, attractive visuals are some examples of how to improve the customer experience online.

What are the advantages of e-retailing for retailers?

There are several advantages of e-retailing for retailers.

• Size isn’t important
• Location isn’t important
• The ability to reach a larger audience
• Reduces wages and premises costs
• Able to serve and sell 24 hours a day
• Competitors are in e-retail
• Increased opportunities for cross selling, up selling, CRM and micro marketing
• Increased disposable income profile

The best locations for high street retailing are expensive and difficult to procure. This problem doesn’t exist in e-retail. You can sell from any location and sell overseas or to any location. Many smaller retailers are able to reach larger audiences and even compete with the big players by selling online, something that they wouldn’t be able to do on the high street. 

What are the disadvantages of e-retailing for retailers?

Let’s take a look at some of the disadvantages of e-retailing for retailers.

• Retailers might not have the knowledge or technology for e-retail
• The complex nature of logistics and fulfilment
• There aren’t as many impulses purchased
• There isn’t as much power in e-selling when compared to face to face selling
• Legal issues
• High pressure on margins and in-store pricing
• After-sales problems
• The need for significant investment and the on-going costs
• The reduced need for traditional high street retail experience

Many retailers haven’t ventured into e-retail because of the disadvantages mentioned above. Many of the retailers who have taken the leap already had their hand in mail order catalogues, making it easier to make the transition. 

What is e-retail?

E-retail has been defined as the sale of goods or services via electronic channels or the internet by consumers for personal use or to use at home. This is a great definition as it does include all eCommerce activities that involve transactions with the end consumers. 

The alternative is transactions that end with business customers. E-retail is not selling to business customers, but to end consumers who will be using the product in their homes or for themselves, B2C rather than B2B.

There are a few activities in e-marketing that don’t involve transactions. These activities involved giving customers free information or working on brand promotion. Marketing activities such as these are still considered to be B2C and not B2B, but they are not usually included within the scope of e-retail.

The dot.com crash in 2000 didn’t halt the growth of e-retail. The strongest categories include:

• Books
• Clothing
• Groceries
• Sex Products
• Games and software
• Computing equipment
• Music and DVD
• Travel

E-retail continues to get stronger, especially the top 8 categories, which account for three quarters of sales in Europe.

About logistics and supply chain management

The major difference between logistics and supply chain management is that supply chain management includes the supplier and the end users in the supply chain whereas logistics does not. There are four further differences to take note of. Here are the four differences of supply chain management over logistics.

1. Supply chain doesn’t have a lot of fragmented elements, it is a single entity. Logistics is also now seen as a single entity by forward thinking companies, but not all. The main chain is that the end users and the suppliers are included in the planning processes of supply chain management.
   
2. Supply chain management is a strategic planning process. The focus is placed on strategic decision making more than on the actual operations.
   
3. Inventory approaches are different in supply chain management.  In traditional logistics the inventory is used as a safety net in the pipeline, resulting in expensive stock build up.  Supply chain management works to change inventory, so it’s only used as a last resort in order to create balance in the product flow.
   
4. Integrated information systems are vital for a successful and effective supply chain management. The information system is part of the entire supply chain and doesn’t work in isolation for each of the components of the supply chain.

The differences in supply chain management result in improved visibility for product demand and stock levels. This has only become possible for the entire pipeline thanks to the advances in technology.

Supply Chain Performance Metrics and Diagnostic Measures (Supply-Chain Council SCOR Model)

	Level  2		Level 3
	Performance Metrics	Complexity Measures	Configuration Measures	Practice Measure
Plan	·         Financing costs ·         Inventory days of supply ·         Planning costs	·         % of order changes ·         # of SKUs carried ·         Inventory carrying costs ·         Production volume	·         # of channels ·         # of supply chain locations ·         Product volume by channel	·         Forecast accuracy ·         Obsolete inventory on hand
Source	·         Material acquisition costs ·         Raw material days of supply ·         Source cycle time	·         % of purchasing spending by distance ·         # of suppliers	·         % of purchasing spending by distance ·         Purchased material by geography	·         % of items purchased by their associated lead times ·         Payment period ·         Supplier delivery performance
Make	·         # of defects of complaints ·         Build order attainment ·         Make cycle time ·         Product quality	·         # of SKUs ·         Upside production flexibility	·         Capacity utilization ·         Manufacturing process steps by geography	·         % mfg order changes due to internal issues ·         Build to stock % ·         Build to order % ·         Value add % ·         WIP inventory
Deliver	·         Fill rates ·         Line item return rates ·         Order fulfillment lead times ·         Order management costs	·         % of line items returned ·          #of orders by channel ·         # of line items and shipments by channel	·         # of channels ·         Delivery locations by geography	·         % invoices containing billing errors ·         Order entry methods ·         Published delivery lead times