How the Top Food Manufacturing & Logistics Companies Stay Ahead

By: Lance Healy

The food manufacturing and logistics industry is competitive as is. Add in increasing customer demands, industry regulations, and economic uncertainty and it is apparent that food manufacturers must have the tools, tenacity, and know-how to stay ahead of the game.

In food supply chain, there is a continuous quest for improvement. But in the search for increased efficiencies, or areas to increase total profitability, there is one area that is commonly overlooked: direct connectivity with carriers & suppliers.

Today, if you want to compare flight prices or see what’s playing at the local movie theater, all you have to do is hop on your phone and open your favorite web browser. This immediacy is such a large part of the consumer experience that we’ve become accustomed to it by now. For businesses, price comparison tools and transparent information-gathering has evolved into a must for any company looking to stay afloat: if you don’t have access to meaningful, real-time data, your competition will pass you by.

Food transportation and logistics companies are starting to utilize the same technology that kickstarted the consumer sharing-economy revolution. At the local level, companies like Postmates and GrubHub are opening the door to new customers for restaurants by offering tools for easier food delivery. Tools that allow smaller restaurants the ability to promote their delivery services by connecting them with freelance drivers. Nationally, big companies like Amazon and Walmart are reinventing grocery shopping by taking the entire process online. These platforms are providing real-time data and live communication (regarding inventory, status updates, shipment tracking, etc.) to meet customer demands; but when you look at food manufacturing and logistics at a larger scale, how can the top food companies leverage live connectivity with their carriers & suppliers to stay ahead?

How Live Connectivity Can Transform Food Supply Chain

For decades, food manufacturers have relied on 2 dated tools to manage freight: routing guides and EDI.

Routing guides – Routing guides set the direction for which carrier to pick for a given lane. Understanding the time and effort that goes into frequent RFPs and manual updates to a routing guide, routing guides can easily fall “out of date”, and manufacturers may continue to select the carrier listed for any given lane, even though a competing carrier may offer a lower rate.

EDI (electronic data interchange) – While the freight industry relied solely on EDI for years, as other technology advances, EDI’s shortcomings became more pronounced. EDI can’t automatically update, and it sends information in batches, meaning that a communication from your carrier or supplier could sit for hours before being batched and sent to you. EDI also doesn’t provide the platform for easy price adjustments, like if a carrier wants to bid more competitively, or if a price needs to be adjusted due to weather or time constraints.

Avoiding routing guides and EDI in favor of live connectivity is the first step towards improving food logistics operations.

The shift to live connectivity

Just like visiting a single source to check prices and flight times from a variety of different airlines on the consumer side, live connectivity with carriers is the same exact concept but does so with your own pre-approved, preferred carrier base.

The top food companies understand that the same concept of live connectivity consumers rely on, makes sense in freight management. Here’s how live carrier connectivity keeps the top food companies ahead of their competition:

1. Better pricing – Live connections give you the ability to see quotes directly from each of your carriers on every shipment, and comparing quotes ensures you’re always getting the best price. In addition to seeing total costs every time from every carrier, Banyan clients see an average 16%-21% reduction in LTL freight spend.

2. Better relationships – Instead of relying on a cumbersome, annual RFP process, give regular feedback to your carriers. When you are always connected to your carrier, you can easily collaborate monthly on pricing, because you have easy access to all the data you need. Live connections provide the data to create feedback loops to let your carriers know what they missed and by how much. As your business and their network changes, your carriers can work with you to process lane-specific adjustments that are instantly available to you.

3. Automated Freight Bill Management – Live connections enable automated transfer of key data into your current freight bill management system.
You set the thresholds for when to flag an order for review. So instead of having someone on your team reviewing every single line item, they can manage exceptions instead of having to look at every single order and invoice. Live connections in freight bill management provides the data and ability to resolve disputes and turnaround invoices faster for better cash flow and instant accrual reporting.

The food manufacturers at the forefront of the industry understand that freight costs change quickly depending on carrier contracts, weather, pick-up times, truck availability, or expedited delivery needs. They are always looking to ensure that they are getting the best price possible. And they are giving their carriers a way to actively bid for their business throughout the year.

One Last Reason to Incorporate Live Carrier Connectivity into Your Food Logistics Supply Chain

A major concern for those involved in food logistics and supply chain is spoilage. According to the Food and Agriculture Organization of the United Nations, 1.3 billion tons of food are lost or wasted each year. And we don’t have to tell you that waste = money. Empowering your food supply chain with live connectivity directly with your carriers creates efficiencies in the whole process – quickly compare prices, check transit times, book loads, and check status updates—ultimately ensuring your precious cargo gets there on time.

In business, especially food transportation, the old cliché that time equals money, rings particularly true.

What are you waiting for?

Combine the ability to select the best carrier for the price with better carrier relationships and automated freight bill management, and you’ll quickly wonder how you went so long without live connections.

Let’s face it: If you’re still relying on old-school methods for shipping, like routing guides and batch-based tech, you’re going to end up paying too much. Increase efficiencies, gain bottom-line savings, and improve your food supply chain operations with live connections from Banyan Technology.

Check out more about live connections with Banyan Technology.