DCs Key to Streamlined Food Industry: FMI Report

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DCs Key to Streamlined Food Industry: FMI Report

ARLINGTON, Va. -- Distribution centers are becoming ever more essential to helping companies meet consumer demands, reduce
energy costs, and boost efficiency, says a new report, "Distribution Center Benchmarks 2007," which was issued yesterday by the Food Marketing Institute here. Last year the typical center shipped 28.3 million cases, or 611 million pounds of food -- enough to prepare almost a half-billion meals.

The report measures distribution center performance in extensive detail, breaking the data out by wholesalers and self-distributing retailers, region, center size, and other variables.

Among the main strategic concerns of DC executives, according to the report, are the rising number of SKUs, due to diverse and changing consumer demands, and skyrocketing energy costs. The executives ranked the impact of both on their operations at 7.0 out of 10, with 10 being the highest. No. 1 on the list, however, was quality of labor, which scored an 8.0, reflecting executives' need to hire superior employees to operate increasingly sophisticated facilities. A related topic, the shrinking labor pool, garnered a 7.7 rating. Companies are responding to this crisis with stepped-up training and more employee recognition programs, as well as realigned working hours and shorter shifts.

The report also found that DCs were taking many measures to lower energy costs, among them fully loading trailers, and packing the cases and pallets in tight cubes; employing low-friction tires, aerodynamic trailers, and computers that turn off idling engines; improving route planning to cut the distance traveled; and making cross-dock deliveries to save the time, energy, and space to warehouse products.

Based on survey responses representing 94 distribution centers operated by 33 companies, the report costs $95 for FMI members, $175 for associate members, and $250 nonmembers, and is available at www.fmi.org/store/.

FMI runs programs in research, education, industry relations, and public affairs for its 1,500 member companies -- food retailers and wholesalers -- in the United States and globally. FMI's U.S. members operate about 26,000 retail food stores with a combined annual sales volume of $680 billion -- three-quarters of all retail food store sales in the United States. The organization's retail membership is made up of large multistore chains, regional firms, and independent supermarkets. Its international membership includes 200 companies from over 50 countries.