Hot Topics in Supply Chain Management

Written by Justin Sorto, Education Committee Chair

At a recent visit to the Loyola University/Chicagoland Food & Beverage Network monthly supply chain event, “Hot Topics in Supply Chain Management”, industry professionals from AFN Logistics, Enjoy Life Foods, Walgreens, Lawson Products, and World’s Finest Chocolate spoke about supply chain issues that they are currently experiencing at their companies. The event was held on September 13 at AFN Logistics headquarters in Niles, IL. These monthly events offer a great opportunity for networking with different supply chain professionals in the Chicago area. Alan Reed, Executive Director at Chicagoland Food & Beverage Network, called Chicago “the Silicon Valley for the Food & Beverage Industry”. With a network that includes companies like Tyson, KraftHeinz, Pepsico and many more, the organization brings a mix of industry professionals and entrepreneurs together to develop relationships and share ideas.

Key topics from the panel speakers included the emphasis on customer experience, sustainability/food safety, big data, “Amazon impact”, and hiring in today’s marketplace. The panel, made up of senior supply chain managers, pulled examples from their day-to-day experiences, addressed their concerns and described what their stakeholders are demanding these days in terms of service.

Shane McCarthy, the VP of Supply Chain at Lawson Products, which is an industrial distributor of maintenance and repair supplies, including fasteners and steel fittings, explained the issues that they are seeing as a result of the recent tariffs imposed on goods by the federal government. There have been good and bad effects of this increased governmental regulation. The increased expense imposed on companies to ensure that they are coding imported products correctly has become burdensome. However, Lawson Products has always taken a risk adverse approach when coding, and as a result, are looking into money they may have overpaid due to previous miscoding. It was mentioned that hiring a freight forwarder, to save time and labor and serve the function of a trained professional who knows the proper coding, was invaluable, especially in the current marketplace.

Janice Kim, from Enjoy Life Foods, explained their use of social media and passion marketing to promote their brand and products and create an overall better customer experience. The question came up as to whether customers can or are willing to accept the cost of sustainability, but with their allergy free products, they retain their customers. Like the rest of the marketplace, they are being pushed towards sustainability regarding packaging and raw materials. Their customers also seem willing to pay extra to support the environment and social issues. Due to the increased concern over these issues and sustainability, the company continues to expand its supply chain and demand more of the team to meet their customer’s demands.

The “amazon effect” in this instance was explained as the requirement for increased customer service, whether business is done B to C or even B to B. Today, companies require tracking from loading dock to loading dock. Also, as expressed by Kristee Mitchell, the VP of Supply Chain Planning & Logistics at World’s Finest Chocolate, they have found the need to be closer to the customer (the sweet spot being within 100-150 miles of the customer) to provide superior customer service and respond to more JIT and real-time purchases from customers. This has changed the way that they set up their warehousing and final mile delivery. The company is currently searching for partners in different regions within the U.S. to expand this new demand of their customers, which can be even more difficult for a company like World’s Finest Chocolate that needs large cold storage space for their products.

Regarding issues with hiring in today’s world, it was explained that Amazon is perceived to be “a sexier job” to today’s young professionals than a more traditional company, like Walgreens or Lawson Products who were represented on the panel. At Walgreens, they are combating the problem of finding new recruits, especially those with 1-5 years of experience by creating a 2-year rotational program to give students and young professionals an opportunity to learn about different aspects of supply chain and where their interests lie. The panelists all made note that hiring in the industry today has become increasingly difficult. Even more challenging, keeping employees for an extended period has become an almost impossible task. They claim that more needs to be done to retain good employees in this age, when young professionals appear to believe the only way to move up the corporate ladder is to jump to the next company.

The Chicagoland Food & Beverage Network was formed in 2016 and focuses on food and beverage companies and their key suppliers. The network includes suppliers of packaging materials, equipment, machinery and transportation services, and the full range of consulting and support services that are critical to supporting the food and beverage industry and bringing their products to the marketplace.