Leading cheese specialist chooses Culina Logistics for consumer brand contract

Dairy Partners Ltd a UK manufacturer of cheese ingredients and sales and marketing partner for EU produced consumer branded dairy products, has awarded a contract for the storage, picking and distribution of its retail product range to Culina Logistics, the market-leading provider of logistics services for food and drink companies. The contract became fully operational in June 2011 and is managed from the Culina Logistics depot in Stafford to utilise a shared user model across the company’s network of ten sites to optimise transport with minimum vehicle movements and delivery lead times.

“Following a highly successful trial period using Culina Logistics as our distributor we are delighted to have awarded our distribution contract to them,” says Robert Peel, Director at Dairy Partners. “We look forward to growing our business with Culina over the coming years.”

Dairy Partners is a leader in the UK cheese industry. It serves the foodservice, manufacturing, wholesale and retail sectors. In addition to being one of the largest suppliers of Grated Cheese in the UK the company also markets a range of retail dairy products including the popular Peelable Cheese brand.

The company awarded the contract to distribute its retail lines to Culina Logistics after reviewing its operations. One of the main reasons for the decision to switch suppliers was Culina Logistics’ ability to provide an economical, flexible and scaleable solution. Palletised products are delivered to Culina Logistics’ Stafford depot from Dairy Partners’ producers in Europe by third party transport. Culina Logistics utilises its established shared user model and network of ten depots throughout the UK and Ireland to manage storage, picking and distribution. This ensures the efficient and timely delivery of products to Dairy Partners customers including major high street multiple retailers and food service sector wholesalers.

“We’ve configured this operation to provide Dairy Partners with a solution that meets its current requirements but which can be scaled up easily as their retail business grows across the UK,” says Mark Baldwin, Account Manager at Culina Logistics.

Culina Logistics operates a highly efficient model where storage and distribution infrastructure and services are shared between users throughout its network. Any vehicle on the road will be carrying products for multiple customers while individual pallets might also contain products from different suppliers but with a common, shared destination. In this way Culina optimises not only the resources utilised in each depot and throughout the network but ensures each vehicle is filled as fully as possible for effective and economical transportation. Supply chain efficiencies and economies of scale allow the company to provide an efficient and cost effective solution to customers of all sizes which can be scaled up and down to meet seasonal peaks and the demands of promotions.

Strengthens senior leadership to build business growth

Culina Logistics has promoted Nick Thompson to the role of director with responsibility for chilled operations. Nick joined the company in July 2011 and served as  chilled operations manager until the new appointment. Prior to joining Culina Logistics he was most recently with one of the UK’s major food service suppliers where he was responsible for running regional and national distribution centres. He will be based at Culina Logistics’ head office in Market Drayton and report to chief executive officer, Thomas van Mourik.

“We have a great team and an excellent track record for delivering innovative added-value for our customers,” says Nick Thompson. “Since joining the business and discussing our operations with stakeholders I’ve recognised that there is scope to add even more value and raise the service bar higher in the food & drink sector.”

A key aspect of the role will be to develop the Culina Logistics offering for chilled operations and share best practice with the company’s rapidly growing ambient service, which will include identifying synergies and opportunities for greater efficiencies. As part of this process Nick has been meeting with client managers at customer sites to discuss the services available to them and looking at how continuous improvement can add value across the chilled operation.

As an example, one of the company’s clients was already achieving a highly creditable on-time delivery success rate of better than 95 per cent but wanted to do more. Working with the client Culina Logistics introduced a series of incremental improvements that have led to on-time delivery rates consistently reaching 99+ per cent. This success has enabled the client to offer an enhanced level of service into the market place and create new customer-facing messages about the significant improvements it had made.

“We want to think more strategically about how to get the most out of all parts of the business,” says Nick Thompson. “The delivery rates improvement we introduced with this client illustrate what can be achieved by working even closer with the customer.”

The new appointment is the latest stage in company’s plan to double the size of the business within the next five years.

Result? Shorter supply chains and improved on-shelf availability

Tesco, the UK’s biggest retailer, is asking its suppliers to shorten their supply chains by introducing “next day” deliveries for ambient products. In industry parlance this is known as “Day One for Day Two” which perhaps more accurately describes how the process works; orders received before a predetermined time on the first day are delivered within an agreed window on the second. Order picking and transportation typically takes place during the evening and overnight.

In fact this is a tried and tested process for chilled and fresh products where items need to be delivered in the shortest possible times so that retailers can offer consumers the best possible combination of service, quality and availability. The perceived wisdom has for some time been that ambient - in other words, non perishable - items did not need to be delivered as quickly. Instead the ambient grocery sector has historically operated with orders being placed on Day 1 for delivery on Day 3 across a Monday to Friday cycle.

But times are changing and retailers recognise that stock tied up in the supply chain - in the warehouse or on the road - requires more capital and generates costs that can be reduced. Moreover, aligning processes for chilled and ambient should in the long run provide synergies and efficiencies for retailers, suppliers and supply chain operators.

A number of major multiples have been driving demand for a Day 1 for Day 2 deliveries for ambient products to reduce working capital tied up in their supply chains and to improve on-shelf availability to enhance their customer service. Tesco has stated its desire to reduce ambient lead times and has been working with its suppliers and third party logistics providers to introduce this new way of working on a cost-neutral basis across its distribution network. Initial implementations of this service, including one managed by Culina Logistics, will cover a six-day, Monday to Saturday cycle.

This new operation commenced at the end of January 2012 and has been operating successfully since then, achieving these benefits for Tesco and its suppliers. The infrastructure and processes in place to support next day deliveries from Monday to Saturday mean the option to expand to full seven-day service is available if required by Tesco and its suppliers.

Although the lead time requirements of the ambient and chilled grocery markets are converging the profile and sensitivities of the products and the processes within many supplier and retailer distribution networks mean that the respective supply chains will remain largely independent for the foreseeable future. However, supply chain service providers who have significant operations in both sectors will be well placed to identify and take advantage of opportunities and synergies that lead to more efficient supply chains.

New Culina Group Company aims to meet demand for integrated perishable supply chain

Culina Fresh Limited is an innovative new door-to-door freight management service which offers high quality multi-modal supply chain capability incorporating road, rail, sea and air transportation for fresh produce, horticulture and other perishable goods. The company has been established to meet demand from producers, importers and retailers for an integrated solution to manage the complete supply chain from source, whatever the country, to final delivery throughout the UK and Europe.

Launched in September as a separate operating business within the Culina Group, Culina Fresh Limited is headed by two highly experienced leaders from the fresh food logistics sector: Managing Director, Thomas van Mourik (current CEO of market-leading Culina Logistics) and Operations Director, Paul Steele, who has 25 years’ freight forwarding experience, the last 15 in the perishable sector.

Many retailers are moving to direct sourcing as part of a strategy to simplify their supply chains and introduce shorter lead times and other efficiencies. Producers and importers are also adapting their supply chains to improve efficiencies in order to meet future challenges.

The business will initially operate from two strategic locations. Facilities at Heathrow Airport in the UK will provide offices and warehousing to co-ordinate air freighting operations. Valencia in Spain has been chosen for its proximity to the region where the company expects to manage significant volumes of fresh produce. The company will also work with carefully selected partners in North America, South America, Eastern and Southern Africa, and the Far East who will provide local support services.

“Producers and importers have been telling me that their existing supply chains are too disjointed and inefficient, and to date no-one has been prepared to take ownership and responsibility for door-to-door freight management,” says Paul Steele. “We’ve identified an exciting gap in the market which we’ll be filling with a high quality service that will address those issues and offer a new benchmark solution for freight management of temperature sensitive goods.”

Culina Group’s very own careers website (www.culinacareers.co.uk) went live in October to provide potential recruits with all the information they need when looking for a role with one of the logistics industry’s most progressive employers.

The site includes information about vacancies and career opportunities at each of the company’s ten sites in the UK and Ireland. Visitors can browse current vacancies at each location and filter opportunities by site and job category. There are also quick links to special events such as recruitment days.


The site is designed for easy navigation and includes a wide range of information about Culina Group and its operations. This includes profiles and comments from employees across a range of roles and locations who explain in their own words how working with Culina Logistics has provided them with excellent career opportunities. Information about the leadership team and other senior managers helps prospective employees gain further understanding about the company and its approach to doing business. Culina Group has an excellent staff retention rate, currently at 96 per cent, and actively encourages its employees to progress their careers through personal development and training.


“We are passionate about adding value down the line and this starts by recruiting and developing the best logistics professionals in the industry,” says Richard Berry. “With the site we aim to provide all the information high calibre people need to make a decision about joining the food & drink industry’s leading logistics provider.”

Steve Winwood, Group Commercial Director of Culina Logistics, explains one of the current supply chain trends

Retailers are encouraging their supply chain partners and suppliers to revise their delivery patterns so that fresh/chilled products and ambient products can be moved with common processes and schedules. This goes against perhaps 40 years of tried and tested practices but in making these changes the retailers expect to adopt, and be seen to adopt, leaner and more sustainable supply chains. The service providers face the challenge of delivering these changes but can also view them as new business opportunities.

Research published recently by the Institute of Grocery Distribution appears to endorse this belief. This suggested that around 60 per cent of retailers expect lead times will reduce by up to one day over the next five years. More than half of manufacturers agree. The majority of retailers (54%) and manufacturers (67%) also expect that order frequency will increase over the same period.

Most retailers have in the past employed different ordering and delivery processes for their fresh/chilled and ambient products. A typical chilled product ordering process works on what is known as day-one-for-day-two. Orders placed by a specified time on the first day will be picked and despatched for shipping and delivery overnight or on the following day. Each category of product (such as meat, produce, dairy and fresh juice) typically has its own delivery window so that each order arrives at a specific time. A number of retailers require a drop-and-drive process which minimises the amount of in-bound checking and paperwork. Instead the order is checked for completeness at the point of picking so that stock spends as little time as possible in transit before going on sale.

Ambient products, on the other hand, are often delivered over a day-one-for-day-three cycle. Here, orders received on the first day are picked on the second and delivered on the third. Deliveries are made at pre-booked times but will vary from day-to-day which means there is less certainty of vehicle availability on the day. In this scenario most retailers prefer to complete all checks on arrival and provide a signed proof of delivery, known as POD, at the end of this process. The advantages here include maximising order success rates and minimising the number of returns.

These models have developed to create supply chains geared towards ensuring fresh/chilled products have maximum shelf life. This is good for retailers because it presents the maximum opportunity to sell before a product reaches its sell by date. Similarly, although they may not always appreciate it, this is also good for consumers because they have longer to eat or drink the product after they have bought it.

To a certain extent, the argument goes, deliveries of ambient products do not need to be as quick. But times are changing and retailers are beginning to realise that employing two different delivery processes is not always efficient. Aligning both fresh and ambient products into a single day-one-for-day-two process should lead to efficiencies in a number of areas.

The benefits are clear. The retailer has a simpler ordering process geared towards replenishing stock on the following day and aligned with sales patterns. The retailer will also see significant reductions in working capital by operating the ambient supply chain in the same way as the current fresh/chilled supply chain. This will lead, however, to improved stock availability on the shelf, where it counts most, for improved customer service. For smaller retailers there will be a reduced requirement for holding stock in store rooms at the back of the shop. This means more floor space can be dedicated to selling or, alternatively, the pressure to add costly storage facilities to support bigger volumes or faster throughput is avoided.

This change in the ambient supply chain does however have significant effects for the retailer’s supplier who inevitably will need to hold additional stocks within its supply chain. Suppliers will also need to react far more quickly to requests from the retailer at a time when accurate forecasting is getting ever more difficult to achieve.

In the middle of all this is the logistics provider which may need to revise its own processes. The shorter lead times implied by day-one-for-day-two will mean an increased and more flexible requirement for warehouse storage, but also greater reliance on cross docking for consolidation. This could have implications for the design and layout of the warehouse but also the equipment, technology and processes employed. Beyond this the information systems in use - from order processing, warehouse management, order picking, vehicle loading, and delivery routing and scheduling - will probably have to work more closely than ever before to ensure seamless, real-time support for the real-world business. Interfaces with upstream (ie retailers) and downstream (ie producers and suppliers) information systems will also become more crucial and, ultimately, embedded within the supply chain.

New appointment supports growth strategy for Culina

Culina Group has added to its leadership team with the appointment of Glyn Davies as a non-executive director. The company has grown significantly in the past few years through the success of its shared user distribution model and complementary services for clients in food production and retailing. It plans to double the business within the next five years through organic growth and strategic acquisition and this new appointment is designed to add more insight from the road haulage and transport sectors at the non-executive level.

“I am delighted that Glyn has joined us at Culina in such exciting times,” says Thomas van Mourik, CEO, Culina Group. “The next five years are pivotal for us and Glyn’s expertise and support could not come at a better time. He will be instrumental in supporting our strategic plans to double the business by 2016.”

Glyn Davies has experience of the road transport and haulage sectors built up over nearly 50 years. During his career he has founded, owned and led a number of successful businesses. Each has been built on his understanding of the market and appreciation that cost plays a key role in transport operations.

After starting his career with P&O Road Services in the 1960s, Glyn founded Russell Davies in 1974 and led the company for 21 years to build a £100 million turnover business before selling to a major industrial group. He then co-founded Hanbury Davies and created another strong business before it was bought by a large distribution company ten years later. Since 2008 he has focused on business interests including Hanbury Riverside, a commercial vehicle contract hire and sales company, and a property development organisation which he manages with his son. He has also previously held non-executive director roles at a number of businesses.

“Culina is a big business with ambitious plans,” says Glyn Davies. “I’ve known Thomas van Mourik for many years and I am looking forward to helping the business grow by sharing my experience and insight.”

In his spare time Glyn supports Ipswich Town Football Club and is a keen follower of music and motor cars.

How will the London Olympics affect transport and distribution across the country?

With less than a year to go, excitement about the Olympics is gradually mounting. But what does the largest sporting event ever held mean for businesses and the supply chain?

First, there is going to be a huge increase in visitors to London and the surrounding area. Some, including Lord Coe, have suggested up to a million extra but more realistically - based on recent games - it is likely to be in the order of two to three hundred thousand who will be coming to stay in London specifically for the event. On top of this are people from the UK living close enough to make day trips and the several thousand athletes, supporters and officials who are more directly involved.

This is going to increase demands on food and general retailers, food service businesses, hotels and other businesses. All of these, to some degree or another, rely on the supply chain to maintain business continuity. This is predictable and many of these businesses will already be preparing for the upsurge they expect to see during the build-up to the games and the likely peak during July and early August.

Hotels can plan with some confidence that occupancy rates will be near to 100 per cent during the games and schedule their deliveries accordingly. But what about food retailers and food service? The volume of customers will increase for sure but by how much and what will they want to buy, and when? Will they prefer to sit down for a meal in a restaurant or will they buy snacks from a nearby take-away, supermarket or convenience store? Those outlets that maintain stock availability will do good business but those that plan badly will miss the opportunities that come their way. Suppliers may need to schedule deliveries more frequently or at different times of the day to fulfil the increased demand.

The Olympic site will also present some interesting logistics challenges. This is a new venue that will probably be at its busiest at the time when it has only just fully opened. This is not normal for most developments which gradually build up to peak capacity over many weeks or months. Some of the country’s largest and best known retailers will be opening stores in and around the site over the coming months and planning their logistics operations will be a key part of their launch phase. Getting it right first time will be the only chance to maximise the business potential.

The second key issue for the supply chain is how this unprecedented event will impact ongoing operations. Traffic levels in and around the main venues are likely to be much higher than usual which will affect scheduling and planning or normal deliveries. Everyone involved with the supply chain will need to take this into account. Open access events such as the marathons, triathlons and cycling road races and time trials will inevitably lead to road closures, large crowds and increased traffic. This has already been shown by the success of recent “trial” events such as the cycle road race in August. Most of these events are scheduled for the weekend but anyone making or taking deliveries on the days affected will need to plan well in advance.

The authorities are not complacent and have been planning for most of this since 2005. Infrastructure has been upgraded and the various bodies involved, including LOCOG, Transport for London and so on, are putting plans in place to cope with increases in train passengers and road traffic. TfL said it had spent more than £6bn upgrading the network for the Olympics. LOCOG is aiming for 100 per cent of spectators to travel to venues by public transport, cycling or walking. It has also published lots of information on road closures and other changes during the games.

Some commentators are suggesting that traditional tourist numbers in London will be lower than normal. Indeed, studies of the recent games in Sydney, Athens and Beijing have suggested that tourism numbers over the whole year might be down slightly. London may be different because of its location and size but even so everyone expects the number of visitors during July and August to be much higher than normal. So, with less than a year to go the venues are open, the trial events are taking place and the athletes are gearing up for their final push towards their dream of gold. The only question that remains is “are you ready too”?

Food kilometres — it’s a big subject and not an easy one to cover in a short article like this. Some industry estimates reckon that food in the UK is transported for a total of nearly 30 billion kilometres each year between producer and retailer. Around 80% of this is inside the UK. Leaving aside arguments about where food is produced for a moment, it is clear that once that food is in the UK supply chain there are good business reasons to reduce the number of kilometres travelled to reduce the carbon footprint, minimise fuel costs and save time.

Defra estimates that HGVs and LGVs together account for over one third of all UK food kilometres. Indeed, food transport accounts for 25% of all HGV vehicle kilometres in the UK. But while the annual amount of food moved in the UK by HGV has increased by almost a quarter since 1978 the average distance for each trip has increased by half. This is due in no small part to the changes in retail that have taken place during the same period with the growth of the major supermarkets. This has a major impact on the amount of fuel being used and the number of vehicles on the roads. And it all costs money.

The industry has responded well to these changes. The IGD recently announced that the food and grocery sector has saved 163 million HGV miles through a series of initiatives which have ensured excellent progress towards its voluntary target — supported by Culina Group - of removing 200 million food miles from the country’s roads by the end of this year. This is the equivalent of 2600 fewer vehicles on the roads.

There is more to do and any business involved in the food supply chain can contribute. Logistics operations should be planned carefully to minimise the number of food kilometres without adding undue burden onto the business or compromising its ability to service its customers. Careful load planning and route scheduling help to minimise the distance travelled and optimise loads for maximum vehicle efficiency and productivity. This is more than using the satnav on “minimum distance” setting - many operators now use sophisticated software applications that optimise orders, loading and delivery routes. In fact, HGV tonne kms have increased by 36% since 1991 and by over 100% since 1974, according to DEFRA, which means vehicles and journeys are more efficient than ever before.

Load planning is important. This can cover everything from assembling and loading orders in the correct sequence for efficiency and economy so that the first to be delivered are loaded last. Additional economies can be achieved in third party operations by sharing loads between different customers. This will help to ensure that each pallet or roll cage is loaded near to its full capacity so that the maximum available space is utilised inside the vehicle. The vehicle operates at or near to its maximum carrying capacity which is good for efficiency and minimised food kilometres.

Good load planning and scheduling also help to reduce or even eliminate the need for empty vehicle movements. Third party logistics companies with network operations often transfer products from one warehouse to the other on the “return” journey to maximise the efficiency of their operations. The location and number of distribution centres is also a factor. Too many may add complexity and inefficiency into the operation but too few may lead to overly long delivery distances.

Another way to reduce food kilometres, and costs, is to consolidate processes into fewer sites or even a single operation. On-site copacking or similar rework, for example, reduces vehicle movements associated with collecting items and delivering them to third parties - which could avoid four journeys in total - saving time, money, and management overheads.

Of course, each operator and contract will have an optimum balance between these and other factors. And while these may change depending on the day-by-day circumstances the operational efficiencies created by good planning, scheduling and application of supporting tools all remain very important.

At the same time there are other efficiencies that reduce the impact of road haulage. This can include selecting energy-efficient vehicles and scheduling deliveries for times of the day or week when there is likely to be less congestion on the roads, reducing the time spent idling rather than travelling. Both will contribute to the reduction in the fuel used even when the actual distance driven stays the same.

More generally discussions about food miles often include where the food is produced and whether switching to more local suppliers is more sustainable. Whichever way the argument falls, the distribution industry has a role to play by making sure that its operations are as efficient and well-organised as possible.

Tom Middlemiss, Head of Projects at Culina Logistics, who has been instrumental in the set up of the supply chain packaging joint venture, Culina IPS, believes that suppliers could be missing a trick when it comes to meeting the trend towards retail ready packaging.

I was interested to read recently about a new report published by the Institute of Grocery Distribution (IGD) entitled: Global Retail Ready Packaging and how suppliers are responding to this new challenge to increase their competitiveness. In drawing upon those who have already responded to the challenge, the report seeks to provide insights on approaches to retail ready packaging (RRP).

This included:

Deciding whether it was for them from the outset — in his analysis of the report Stewart Samuel, Senior Business Analyst — Market Intelligence at the IGD, commented that suppliers needed to consider the merits of RRP from a “more ideological or strategic standpoint”, including:

• What is the scale of the change being proposed?

• Can we work to the timelines that have been outlined?

• What degree of internal change will this process drive?

• How does this initiative fit in with other plans that my company is working on?

• What is the business risk of not being part of this programme?

• How are my competitors likely to respond?

 
Level of engagement — the research revealed that suppliers typically adopt one of six different engagement levels when faced with a request to convert their products to RRP. Even for those which are fairly resistant, many continue to maintain some form of engagement in order to understand how roll-out plans are progressing and to better understand the implications for their businesses. Samuel in his analysis concluded that over time, it is likely that many suppliers will develop a different response to the initiative, partly due to their experiences (e.g. gaining benefits and overcoming challenges), and partly due to the response of their competitors.

Offsetting costs: to address increased costs, according to the research suppliers have shown that a range of tactics can be adopted to minimise the overall impact, including

• RRP maximisation — designing solutions to enhance brand appearance in the category, functionality and customer communication 

• Efficiency measures — including converting all customers to the RRP solution and driving procurement savings  

• Negotiation strategies — increase product listing or distribution, increase share of space within the category.

Reviewing supply chain management

Whilst the above are all key insights into ensuring a successful RRP strategy, the report does not cover the importance of food manufacturers reviewing their supply chain management strategies.
Currently there is very little consideration amongst suppliers of integrating supply chain and co-packing activities. This can lead to two highly inefficient and costly scenarios. Firstly, an international supplier of food and drink products could co-pack at source before exporting them to the UK. This means that due to packaging type, efficiency may be lost in the supply chain in pallet and vehicle fill; also where multiple SKUs and clients are involved, the final decision regarding product destination or specialisation needs to be made earlier which can result in higher wastage.

Secondly, suppliers tend to outsource to an independent co-packer which means that product has to be transported between a stockholding facility and a co-packing operation, thereby increasing food miles and inefficiencies. Both of these scenarios and associated inefficiencies can be avoided by selecting a logistics provider that can provide a co-packing solution at their stockholding facility.

This was one of the key reasons behind the formation of Culina IPS. Culina IPS provides true collaboration and integration in the supply chain in order to deliver an RRP solution. This development means that we now offer specialist contract packaging services within our warehouses, negating the need for goods to be transported to and from another location for packing.

The recent Food & Drink Supply Chain Health Index survey conducted by Culina Logistics revealed that for one fifth of the food and drink manufacturers, waste management was one of the best performing areas in terms of generating efficiency gains. However it also showed that for more than one in four (27%) waste management had failed to achieve efficiency targets.


James Tupper, Efficient Consumer Response (ECR)  learning and change manager at IGD, has 30 years' experience of developing people and business performance in the food and grocery industry across Europe, North America, Asia and Africa. Here he talks exclusively to Food & Drink Logistics Review about why supply chain waste prevention needs to be put more firmly on the agenda of all those managing material flows.

“Whether you are on the commercial or supply chain side, your work can have a massive impact on waste levels in the food and drink supply chain. For example, those in commercial functions can have a pivotal influence on the prioritisation of improvement opportunities through tracking of waste performance across products and trade partners. The range, product and packaging decisions of category, brand and marketing managers have major ramifications for waste levels. The forecasting of, and responsiveness to, demand by supply chain professionals, as well as their management of product flow and stock life can similarly have a crucial effect on waste.

According to the Waste & Resources Action Programme (WRAP), 18.4 million tonnes of waste* (costing £17 billion) is produced in the UK food and drink supply chain, and households, each year. Of this, five million tonnes (or 27%) is generated at manufacturing sites, 1.4 million tonnes (or 8%) on retailers’ sites and 0.1 million tonnes (1%) in distribution.

Ideally trading partners need to work together to improve performance, as decisions made and actions taken to prevent waste in one part can have unintended consequences elsewhere (such as increasing overall waste levels). All waste reduction initiatives must ensure waste is not simply pushed up or down the supply chain.

The hierarchy of preferred options for reducing waste are:

• Prevent or eliminate waste

• Redistribute to alternative markets

• Recycle or process into a fresh supply of the same or similar material and reduce consumption of virgin material

• Recover via anaerobic digestion composting, used cooking oil, rendering, energy recovery and mechanical heat treatment

• Dispose of via landfill, thermal treatment without energy recovery or via sewer / controlled water course

A lot of great work is being driven by other organisations to light-weight packaging, reduce household waste and make sure waste is diverted from landfill.  ECR is complementing this work by helping the industry to more efficiently respond to volatile consumer demand and so prevent waste in the supply chain.

ONE — Measure:
To manage something you need to measure it. One way to prevent waste is to focus peoples’ attention on hot spots through measurement, local accountability and communication. 

Across the food and grocery industry there are hundreds of thousands of manufacturing, distribution and retail sites and product items. Identification of hot spots is achieved by undertaking a thorough risk assessment of the supply chain, paying particular attention to where product ownership transfers between internal functions and between organisations. 


TWO — Engage:
Have a measurable waste KPI that everyone can understand and publish it so that everyone knows how much daily, weekly waste there is. A measurable KPI could be one or all of the following: number of singles wasted; weight in kg/tonnes of total waste; £s waste as a percentage of sales. The KPI could be broken down either further to reasons, for example: damaged; out of date; or reduced.

Also creatively engage your colleagues through focus groups and ideas competitions to generate energy. Talk about it! Involve all teams – everyone, wherever they work, has a role to play. Finally conduct regular internal waste audits  and share the results with colleagues.


The primarily focus here is in on reducing waste through minimising over-forecasting. But it is also recognises the business requirement to maximise availability of products. Joined up working along the supply chain will help optimise any trade-offs between availability and waste.

There are a great number of elements that feed into an effective forecasting process, including weather, marketing activity, promotions, new products and seasonality. Certain elements of the forecast may be defined as an ‘art’ while others are more ’scientific’ in nature.

Each input to the forecasting process should be treated differently. Those more ‘scientific’ inputs benefit from taking a more mathematical approach (i.e. statistical forecasting) while others benefit from a more insight-based approach. The common success factor across all inputs to any planning process is the quality of the input. A 2010 survey of top FMCG companies by IGD indicated that planning error occurs from three broad areas:

These include:

• Poor communications which lead to late information, late changes to requirements and inadequate internal collaboration; 

• Inadequate processes which can result in no customer collaboration; lack of internal forecasting process and timely data; 

• A knowledge gap which means it is difficult to forecast new product development, missing information and lack of understanding of customers’ plans.

Food and packaging waste can be reduced by packaging and product design, by:

• Always considering and testing the impact of any packaging reduction initiative on product shelf-life and protection of product. A decrease in packaging may not be beneficial if an increase in food waste is seen; 

• Engaging marketing and packaging specialists at the start of product development with the principles of reducing waste through packaging design; 

• Trialling packaging changes before roll-out to ensure they work;

• Understanding that extending shelf-life by one day can significantly reduce waste throughout the supply chain – every day counts! 

• Considering the use of oxygen scavenging or controlled modified atmosphere packaging to extend shelf-life;

• Looking around, understanding what your competitors are doing and what solutions exist for different categories and markets.

Food and packaging waste also be reduced by having a more efficient product range through:

• Carrying out regular range reviews, looking at sales, volume, profit and waste to enable more informed decisions about your ranging strategy by category; 

• Conducting  some consumer research before introducing new lines to ensure there is a market for them; 

• Conducting regular customer focus groups to check that your product range is still relevant to today’s consumer; 

• Managing your long tail stockkeeping unit (SKU) - analysis generally shows many slowmoving SKU’s generate higher levels of waste due to inflexible supply chains and lumpy, unpredictable demand patterns. Reducing SKU counts to focus the supply chain only on the faster moving products can prevent waste;

• Carrying out product reviews at sixweeks and 12 weeks after introducing new products, to ensure they are meeting your sales and profit expectations; and whether they are causing waste.

The IGD is bringing the food and drink industry together under an overarching target to prevent 75,000 tonnes of waste by the end of 2012, and to also divert a further 150,000 tonnes away from disposal. This follows the successful model begun in 2007 to save HGV miles through a series of measures, including sharing lorries. The ECR ‘miles saved’ project has so far removed 124m miles from the supply chain.
There are currently 33 companies who have signed up to these targets. They are all IGD members and are leading retailers, manufacturers, wholesalers and foodservice operators.

Efficient Consumer Response (ECR) UK has put together a new FREE Supply Chain Waste Prevention guide FREE Supply Chain Waste Prevention Guide It is one of the outputs of 18 months’ work by a team from Asda, Booker, Brakes, Kellogg’s, Kraft Lactalis, Morrisons, Müller, Nestlé, Sainsbury's, Tesco and Unilever.”

* ‘Waste arisings in the supply of food and drink to UK households’

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Culina Logistics Long Service Event at Uttoxeter Races

Culina Logistics, the leading provider of logistics services for food and drink companies in the UK and Ireland, hosted its annual Long Service Event to recognise staff who have dedicated up to 40 years of service to the company.

Seventy staff members and their partners enjoyed a celebratory day out at Uttoxeter Races, to mark significant milestones in service to the company starting at five years.

Thomas van Mourik, Chief Executive of Culina Logistics, said: “Each year we like to do something special to thank our staff for all the years of hard work and dedication to the business. Culina has enjoyed much success over the years and this is all down to the valid contributions made by our staff to uphold the company policy of customer service excellence.”

John Edkins, celebrating 20 years’ service with Culina, said: “I have very much enjoyed working as a driver for Culina for the past two decades, and it was great to be treated to a wonderful day out with my colleagues to celebrate this milestone in my career.”

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Eugene Maher

Eugene Maher, an independent food and drink logistics expert, takes a look at the changing face of the Irish logistics sector, and assesses how food and drink suppliers are enhancing their supply chain efficiencies for the benefit of the grocery convenience sector.

“A lot has happened in the Irish food and drink logistics marketplace over the last three years, driven by actions taken by the main supermarket chains to enhance their competitiveness. Consequently this has created significant supply chain challenges for food and drink manufacturers when delivering to the grocery convenience sector, which represents circa 35 per cent of the total food retail trade in Ireland.

Two key developments have taken place. Firstly, the main supermarket chains have centralised their distribution requirements. The knock-on effect of this is that food and drink producers no longer deliver direct to these supermarkets. Whereas previously goods destined for the main supermarkets and convenience stores would be delivered on the same vehicle, this is no longer the case. This, in turn, has made it more costly for suppliers to deliver their products to convenience stores, which are geographically dispersed and often located in remote areas of Ireland. 

Secondly, the main supermarkets are using their purchasing power with their existing suppliers and wholesalers in the UK and bypassing the Irish market to get the best deals. This, coupled with the fact that they can consolidate supplier goods in the UK for onward delivery to their recently established distribution centres, where product is picked for individual stores, means they are gaining further cost advantage over the grocery convenience sector in Ireland.

So how can food and drink suppliers enhance their supply chain efficiencies for the benefit of the grocery convenience sector in Ireland?

Ideally what is required is a logistics solution, which enables food and drink suppliers in the UK or Ireland to bulk distribute goods into a major stockholding facility, ready to be picked to order for individual convenience stores across Ireland, and then delivered via a shared user network to the outlets to ensure maximum vehicle utilisation and minimum food miles travelled across the whole supply chain. By having such a seamless supply chain solution with a central stockholding facility, UK suppliers would also be able to guarantee on-shelf availability due to being able to take orders for next day delivery, and reduce waste by better matching supply to demand.

The issue with such a solution is that it demands major investment, and no Irish logistics operators have realistically been in a position to raise the necessary finance for such a development.

That was until a joint venture (JV) was created earlier this year between the Culina Group, which provides total supply chain services to 90 premium brand UK and Irish suppliers, and the SHS Group. Over the last 12 months I have been involved with what is arguably one of the most exciting logistics developments in the Irish food and drink industry.  The JV company, Culina SHS Ireland, today provides an unrivalled operational platform driven by leading edge technologies. This consists of a central warehousing facility in South Dublin and a shared user distribution network, comprising a 22-strong vehicle fleet, which is wholly owned by the company. This means that Culina SHS has complete control over the supply chain for the benefit of its customers.

In addition to providing a storage facility for all food producers and processors in Ireland for their finished goods, ingredients and raw materials, Culina SHS offers both UK and Irish-based food and drink manufacturers the opportunity to help the grocery convenience chains remain competitive in the food retail sector in Ireland by providing a highly cost-effective logistics solution. This is not only important in terms of responding to the developments in the food and drink supply chain outlined above, but is also particularly critical at a time of prolonged economic uncertainty, which is putting downward pressure on the premium prices charged by the convenience stores.” 

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The Culina Group has taken another significant step into the Irish food and drink logistics market following the appointment of its subsidiary, Culina SHS (Ireland), by Müller Dairy to provide a total supply chain service for its range of yogurts and chilled pot desserts across the whole of Ireland. The contract forms a key part of Müller Dairy’s plans to grow its business in Ireland.

The contract between Müller Dairy and Culina SHS will start from 1 December, 2010 and reinforces
Culina’s growing reputation as a leading provider of total supply chain services across the Irish food
and drink market and between the UK and Ireland. Culina SHS will be responsible for the
stockholding and distribution of major brands including Müller Corner; Müllerlight; Müller Rice;
Müller Little Stars; Vitality, Amoré; and the Cadbury Twin Pot and Trifle chilled dessert range.
At the heart of Culina SHS’s logistics service for Müller is a state-of-the-art 160,000 sq ft ambient
and chilled warehouse in Rathcoole, Dublin, which features a sophisticated warehouse
management system to provide automatic stock replenishment and complete visibility of order
status throughout the supply chain.

Paul O’Donnell, operations director at Culina SHS Ireland, says: "We are delighted to have secured
a contract with Müller as they have been a major success story in the Irish market. The company’s
portfolio of dairy products has shown significant growth in both Northern Ireland and Republic of
Ireland and generate 400,000 pot sales a day.1 Already established as the No2 yogurt brand in
Northern Ireland2, Müller is poised to move into the No 2 slot in the Republic of Ireland. We are
looking forward to playing a key part in their future success."

“The contract with a big brand name, such as Müller, is also significant in that it reflects the fact that
we now provide an operational platform that offers a highly cost efficient logistics solution to every
sector of the Irish grocery market, from major retailer NDCs through to the hard-to-reach grocery
convenience sector.”

O’Donnell adds: “In recent times, the centralisation of distribution requirements by the major
retailers in Ireland has meant that it has been more challenging for food and drink manufacturers to
deliver their products to convenience stores cost efficiently. Whereas before they were distributing
direct to the main supermarkets and convenience stores across Ireland they are now only
undertaking the latter, which makes it more expensive to service. Our warehousing and shared user
distribution operation, driven by leading edge technology, ensures a cost effective solution, despite
the move to centralisation by the supermarkets, combined with the geographical challenges in
Ireland and the associated distances involved. In doing so, we can enable food and drink producers
to help the convenience sector remain competitive in today’s challenging economic climate, which
continues to put downward pressure on the premium prices charged by convenience stores.”

Gharry Eccles, Müller Dairy’s CEO, says: “We have very ambitious plans to escalate the
development of our business in Ireland in the medium and long-term."

“At this pivotal stage in our expansion plans, we felt it was appropriate to explore all avenues to
ensure our logistics operation is geared towards providing the most effective and cost-efficient
service to our widening customer base."

“Following the opening of its new ambient, chilled and temperature controlled warehouse facility near
Dublin earlier this year, Culina SHS is now in a position to offer a seamless, one-stop-shop supply
chain solution covering the whole of Ireland. With this facility in place, we believe that Culina SHS is
operationally geared to deliver our future logistics requirements.”

1 Source: Combined Northern Ireland and Republic of Ireland. Internal sales data.

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Culina Logistics the leading provider of supply chain services to food and drink companies in the UK, has announced a circa 25% increase in turnover for the last financial year, despite the tough economic conditions.

Turnover was up from £97.285m to £121.431m in the financial year ending December 2009, reflecting the fact that Culina Logistics secured 25 new accounts over the 12 month period. Operating profit was £1.578m, down from £2.240m the previous year due to significant investment in the expansion of business during the 12 months with the opening of a new Bristol depot and the acquisition of Wincanton Chilled Ltd.

Thomas van Mourik Chief Executive, Culina Logistics

Says Thomas van Mourik, Chief Executive of Culina Logistics: “This was a challenging year, operating in one of the worst economic environments in the UK for a long time. However we successfully delivered on our expectations in terms of turnover, profit and cash flow."

“It was a year of significant investment for the company, including the acquisition and integration of the Wincanton chilled business. The decision to buy Wincanton Chilled has been proved to be the right one and we have now maximised synergies between the two operations and eliminated all transition costs."

In summary, van Mourik added: “Significantly these results demonstrate the financial strength of our business, providing complete peace of mind to our customers at a time of great economic uncertainty. Not only are we increasing revenues and returning a profit, our debt is very low and we continue to invest in the business to help drive further efficiencies in the supply chain for the benefit of our customers."

“As to the year ahead we are cautiously optimistic as we expect to see the return on investment in the acquisition and integration of Wincanton’s chilled business. We will also continue to drive efficiencies through our own operations recognising the pressures our customers are under to reduce supply chain costs and so that we remain resilient to the continuing challenging economy.”

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The Food & Drink Supply Chain Health Index report, produced by Culina Logistics, flags up the potential for greater efficiencies in the food and drink sector's supply chain. Food & Drink Logistics Review talks to the industry about the challenges of, and opportunities for, driving new efficiencies in the supply chain.

The Index revealed that more than 1 in 4 (43.8%) of logistics management interviewed presented a mixed picture of efficiency performance with some areas of the supply chain on target/above target but some below, suggesting room for improvement.

For James Lancaster, Supply Chain Director at Lactalis Nestlé, the three key challenges and therefore opportunities for additional efficiency gains in the supply chain for the business are in the areas of waste management, warehousing and primary transport.

On waste management, James says: "Our supply chain is constrained by shelf life and in the current highly challenging retail environment, with the demands of promotions, pricing and lead-time to name a few, managing waste levels is a significant challenge and potentially a big cost drain if not managed effectively. In tackling this challenge we have focussed on retailer collaboration to ensure the best possible forecasting so as to improve service and minimise waste."

"We are also trying to focus on flexible manufacturing to reduce waste. Manufacturing historically has been about optimising efficiencies — whilst this certainly improves efficiency in the factories, it is not aligned to the needs of the commercial teams who need flexibility and quick response times to increase, reduce or cut production at very short notice. The balance between efficiency and flexibility is one that will take time to establish and in the short term it is about ensuring we raise awareness across the supply chain of current retailer practices and the consequences of inflexibilty.”

With regards to warehousing efficiencies, James believes that the key to optimisation is moving full pallets where appropriate, even if retailers do not want to hold stock. "The fewer times your case or tray is touched, the more efficient your supply chain is," James points out.

This is a point echoed by Kevin Williams, Supply Chain Director at Müller Dairy, who believes unfilled pallet cubes is one of the key inefficiencies in the supply chain. He's currently addressing this issue by working with retailers to find a mutual solution.

He says: "Retailers are holding less stock in their supply chains, which can result in smaller deliveries for suppliers. This means that logistics providers are having to manually pick cases off full pallets and then transport less than the cube potential to meet retailers’ requirements. Müller believes a collaborative approach is the key to driving such waste out of the overall supply chain with knowledgeable people throughout the chain — suppliers, logistics providers and retailers — talking to each other regularly."

James also calls for a unified type of pallet across Europe to enhance warehousing efficiencies. He says: "Currently we have a multitude of pallet types and as a result our product requires intervention before it is fit for trade. This is a drain of resource that is frustrating."

On primary transport, James sees the key factors which will lead to greater efficiencies as better vehicle utilisation, the use of double deck trailers and enhanced cooperation between non-competing organisations who are bringing in volumes from similar geographic areas to share efficiencies. As for alternative transport solutions, he says: "Road trains operate across other countries and enable more cost effective transport solutions. In the UK we are limited by legislation that restricts vehicle size but a more pragmatic approach here would enable large efficiencies to be harnessed."

Thomas van Mourik, Chief Executive of Culina Logistics, says: "There is no doubt that we are all operating in a very tough economic climate, and it appears that uncertainty and austerity are going to be with us for the foreseeable future. This in turn is and will put more pressure on the supply chains of the food and drink industry to perform and for logistics providers to come up with the answers.  Our Index survey showed that those in supply chain management are responding to the challenging environment with one in five respondents (20.8%) indicating that the outcomes of their efficiency drives over the last year were above target and that around a third had reported efficiency gains of between 6 and 15%. Moreover the majority of respondents were looking for efficiency gains of between 6-10% over the coming year."

With regards to opportunities for efficiency improvement in the future, Thomas singles out contract packing and reworking as a  key area that he believes has been traditionally overlooked.

He says: "Bringing contract packing activities to the warehouse rather than having it undertaken off site can provide significant efficiencies as it reduces 'food miles'. Also international food and drink suppliers can benefit from having their contract packing undertaken in the UK, closer to the final delivery point rather than doing at their own sites and using up vital capacity in their vehicles."

"That's why we have created a specialist food contract packing company Culina IPS LLP to offer contract packing services at all of our  ten warehousing sites, negating the need for goods to be transported to and from another location for packing. In doing so we are helping suppliers meet the increasing demand for products to be delivered in shelf ready formats."

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The Food & Drink Supply Chain Health Index Survey, a first for the industry and undertaken by Culina Logistics, gained feedback from logistics management at 50 leading food and drink companies regarding the efficiency performance of their supply chains in the last year and targets and plans for the next 12 months.

Download Health Index Report PDF

More than half of the respondents (55.8%) indicated that there were some areas of the supply chain that had underperformed in terms of creating cost efficiencies during the last 12 months. 43.8% of respondents presented a mixed picture, saying that some areas of the supply chain were on target/above target but also some areas below target. However one in five (20.8%) indicated that the outcomes of their efficiency drives over the last year were above target.

With regards to the cost efficiencies gained in the last 12 months the majority (33.3%) reported efficiency gains of between 1-5%, followed by 6-10% (22.2% of respondents) and 11-15% (11.1% of respondents). 15.6% of respondents said their organisations had achieved efficiencies of between 16-25%.

Unsurprisingly most cost efficiency gains were made in the core supply chain activities, with primary transport coming out on top, with 46.7% of respondents selecting this area, followed by secondary transport and warehousing (both 26.7%). Waste management also featured in the top four performing areas (20% of respondents) and added value services, such as product reworking and pallet management, achieved best results for one in ten of the respondents.

However, whilst these areas performed best, they were also seen as underachieving, again suggesting that respondents felt there was more potential for improvement. Warehousing (42.3% of respondents) was seen as the biggest under achiever when it came to driving further efficiencies, followed by secondary transport (30.8%), waste management (26.9%), pallet management/IT systems (both 19.2%) and product reworking (11.5%).

Nearly a third of respondents reported that their companies had identified new cost efficiencies for the first time, however the majority (69.8%) are making efficiency improvements in the same areas.

Maintaining competitiveness in the marketplace was seen as the biggest factor for driving up efficiencies in the supply chain, followed by continued pressure from retailers, downward pressure on prices and the economic climate.

The study also revealed the key focuses of the year ahead in terms of achieving efficiencies in the supply chain. These were still the core areas, with primary transport coming out on top (45.5% of all respondents), despite this being the best performing area in the last year. Primary transport was closely followed by secondary transport and warehousing, 43.2% and 38.6% of respondents respectively. Waste management was seen as increasingly important with nearly a fifth of respondents indicating that this would be one of two main focuses over the next 12 months.

Many respondents are in an upbeat mood about the prospects for the year ahead. Nearly two thirds of respondents (64.3%) are looking to generate cost efficiencies in the next year in order to grow on the success of their businesses over the last year, despite the economic downturn; whilst more than one in five (21.4%) saw cost efficiency gains as putting the company in the best position for when economic recovery returns.

However, more than one in ten reported that they are driving efficiencies to ensure survival during the current harsh trading conditions due to the continued challenging economic climate.

The majority of respondents (38.6%) are targeting cost efficiency gains of between 6-10% and more than a fifth (22.7%) are being even more bullish and targeting 11-20% gains. However, more than a quarter (27.3%) are being more cautious, indicating targets of between 1-5%.

Says Thomas van Mourik, Chief Executive of Culina Logistics: “The tough economic climate for the last two years and continuing uncertainty has put an ever increasing focus on efficiencies in the supply chain".

“The Food and Drink Supply Chain Health Index has been designed to provide a barometer for supply chain efficiencies across the food and drink sector, allowing manufacturers to benchmark their own performance. In doing so it explores efficiency performance against targets over the last year and efficiency targets and plans for the next 12 months.”

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Culina Logistics, the leading provider of logistics services for food and drink companies in the UK and Ireland, has secured a new contract with one of the world’s leading food and beverages manufacturers.

Kraft Foods, which produces brands such as Dairylea and Philadelphia, has awarded Culina Logistics a contract renewal to provide national distribution and warehousing for its wide range of products.

On the appointment of Culina Logistics, Duncan Campbell, Northern Distribution Manager for Kraft Foods Europe, said: “With so many brands and products, it’s important these are delivered to retailers without compromising their quality and shelf life. Working with Culina Logistics for the past 14 years has demonstrated their commitment to providing a fast and efficient service and we’re pleased to continue our working relationship with them.”

Kraft Food’s goods will be warehoused at Culina’s depots where orders will be processed and stock movements managed. Orders will subsequently be distributed to Kraft Food’s UK distribution base, which includes many major food retailers.

Andy Newnes, National Account Manager at Culina Logistics, said: “The extension to our partnership with Kraft Foods reflects the high quality service that we consistently offer our customers. This is complimented further by the flexible, efficient and added value services that we can offer them.”

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Granini and Little Dish have selected Culina Logistics to effectively and efficiently service their UK-wide customer retailers.
These business wins enable Culina, the leading provider of logistics services for food and drink companies in the UK and Ireland, to broaden its services and relationships with these key clients.

Andy Newnes, national account manager, Culina Logistics, says: “We’re thrilled that fantastic overseas brands like Granini turn to us to get their products to market in the UK and that our clients see true value in working with us. With many of our clients, such as Little Dish, we’ve grown and developed the account from the initial contract into expanded, long-term, trusted relationships.”

Granini, an international premium brand and one of the best-known fruit juice brands in Europe, selected Culina to help it replicate its European success within the UK market.

“Our high-quality fruit juices are available in 50 countries worldwide, and we have recently launched a premium quality chilled product,” says Steve Wheatley, Granini UK Managing Director. “The Granini brand is about delivering the highest quality and best tasting juice, and we need a logistics provider that can deliver our brand to UK consumers. We know Culina can do that.”

Little Dish, the manufacturer of fresh and healthy food for kids, has also chosen Culina to support the company’s toddler and baby food products by providing total distribution services into major retailers.

“Since April 2009, Culina has supported our toddler meals business coming out of production sites in Salisbury and then Consett, Durham, and we continue to be impressed with the company’s commitment to excellent service,” says Dave Voss, head of operations, Little Dish. “Because of this, we selected Culina to support our baby food products, which are manufactured in our new production site in south Wales.”

Newnes continues: “We have a strong commitment to provide the best customer service and the most efficient warehousing and distribution services. We work within a very competitive marketplace so we continue to focus on being a quality provider, helping to do what’s right for our clients and creating cost effective and sustainable supply chains.”

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First Milk, which handles 1.6 billion litres of milk every year and is the UK's cheddar specialist, has awarded Culina Logistics a contract to provide UK-wide distribution and warehousing for its many dairy products.

On the appointment of Culina Logistics, Sue Wilson, general manager: procurement First Milk said: “As a farmer owned co-operative, it is important that we deliver sustainable returns to our farmer Members. Working with Culina Logistics will allow us to do this by delivering an economic and efficient service and a flexible platform for future growth.”

Culina Logistics will predominantly collect packed cheese from First Milk’s site in Maelor, near Wrexham. The goods will then be warehoused at Culina’s depot in Stafford with picked orders subsequently being delivered to major food retailers, food processors and food service organisations across the UK. Culina’s Stafford depot will also provide First Milk with a sophisticated warehouse management system that will efficiently process orders and manage their stock movements.

Dave Lowe, Business Development Manager at Culina Logistics, said: “This new contract reflects our high quality service that offers flexibility, efficiency and value to all our customers. This customer focus, coupled with our ability to offer all solutions under one banner, is an important driving force in our strategy to grow the business in both the chilled and ambient markets.”

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