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Fresh and Fast: Meeting the Challenges of the Produce Supply Chain

A conversation with Richard Sawyer, vice president of supply chain with Dole Fresh Vegetables.

Fresh and Fast: Meeting the Challenges of the Produce Supply Chain

Dole Fresh Vegetables is one of the nation's leading providers of fresh produce to grocers of all sizes. As such, it faces a number of challenges in getting its highly perishable product to market in a timely fashion, while meeting the highest possible standards of quality and freshness. In this interview, conducted at the SCOPE Fall conference in Scottsdale, Ariz., Sawyer discusses how the company serves its extensive customer base, through several innovative programs that provide value-added options while maximizing limited transportation and distribution resources. 

Q: What's different or challenging about the produce supply chain?

A: Sawyer: There are two factors that make it unique. One is that most of the produce consumed in the United States is grown in the Salinas Valley in California, just east of Monterey, eight months out of the year. The other four months, from December to April, it's grown in Yuma, down on the California-Arizona-Mexico border. Therefore, from a supply-chain perspective, everything has to go all the way across the country.

You also have to recognize that our industry has a product with an extremely short shelf life. You're a long way from Boston, Massachusetts, and you have to keep it at 36 degrees within four hours of when it's harvested. And you have to get it there fast, so that retailers have the time to market the product and get it to the consumer. When you factor in geography and the sensitivity of the freshness factor, there's very little margin for error. 

Q: How does the bulk of your stuff move? Do you rely on intermodal?

A: Sawyer: It's all truck. We don't use intermodal. Dole will ship full truckloads of iceberg lettuce from Salinas to Springfield, Ohio, with a team driver arrangement, and get it there in 54 hours. You cannot do that any other way. [Railroads] don't have the cold-chain control and they don't have the timing. 

Q: So it has less to do with cold-chain technology than with the delay in shifting between modes?

A: Sawyer: Right. If the rail was right there at the field where we harvested, and you could cool it and put it right on a train and it went straight there, then you probably could do it. But the rail system is just not that sophisticated. 

Q: What about protective atmospheres? Do you utilize that technology?

A: Sawyer: Just temperature control. These things are usually grown in a dry climate. In some cases moisture could be added, but it's primarily kept at 34 to 36 degrees and you have to maintain that cold-chain control throughout the manufacturing and distribution process. 

Q: Is this exclusively a domestic operation?

A: Sawyer: It's primarily domestic. Because of the short shelf life of these products, it makes international very difficult to consider. We do quite a bit of business in Canada. And we could but don't in Mexico. You could stretch that far. 

Q: Are your customers and markets generally big-box retailers, big grocery stores, or small grocers as well? Or do you ship mostly to distributors?

A: Sawyer: We do both. The Wal-Marts and the Krogers, those type of players around the country are customers of ours. We also do some business with wholesalers. We have a tendency to do business with larger groups. 

Q: You yourself are such a large operation - it seems to be a good fit.

A: Sawyer: We're pretty high-volume. We ship east about 250 trucks a week full of different lettuces, celery and broccoli. We have two manufacturing facilities, one outside Charlotte, North Carolina, and another in Springfield, Ohio, and we have to have fresh produce into those plants on a daily basis. Once the raw material gets there, it has to be used in two days or you throw it away. It's a pretty disciplined supply chain. 

Q: What has Dole done to address some of the challenges in your industry?

A: Sawyer: We have developed a unique program over the last three years that we call Full Service Solutions. Retailers in the eastern United States would pick up produce in the West and truck it to Pittsburgh, Philadelphia, New York City or wherever. Because we have a much more sophisticated network, and because we are the only produce company that grows its own produce, we'll include their broccoli and cauliflower on one of our 250 trucks. On any given day, we've got 30 to 40 of them on the road. We harvest daily and cool the product quickly. We'll have it in one of those distribution locations within about 54 hours. 

Q: You do this with some produce that you don't grow, on behalf of your end customer?

A: Sawyer: In some cases there are things we do not grow, and we will purchase those for the customer. They will generally be lower-volume items, like cilantro or radishes. 

Q: Considering the time-sensitivity of your operation, are you able to maximize utilization of trailers, or do you have to send them out before you've used up the entire cube?

A: Sawyer: Five years ago, we realized that the trucks going east were averaging about 22 pallets a truck, because they would weigh out before they cubed out. So we created a program called Heavy-Light Loading, where we match spinach with cauliflower, and get 28 pallets to a truck. We knocked out 54 trucks a week, at about $5,500 a truck. We took that savings and used it to fund the program and pass the savings on our customers.

Q: How have you responded to increased food-safety regulations, in areas such as chain of custody and tracking requirements?

A: Sawyer: Food safety in our industry is very delicate. We're one of the few industries that does not have a [bacteria] kill step. All other food products are baked, boiled, fried or something. Not in the fresh produce business.

We have a complete team of food-safety people, and programs to monitor and track what we do. We have guys who go into the fields with flashlights the night before we harvest, looking for footprints of critters. If we find that some uninvited guest has walked across a particular part of the field and might have left his mark, we will rope off a large section and plow that under, and not harvest that section. We have RFID [radio frequency identification] tracking, where we monitor the product once it's harvested, with each pallet going through a series of RFID towers. We have very sophisticated recall procedures. 

Q: The fact that you grow your own crops must make it easier to establish chain of custody and track backwards in the supply chain.

A: Sawyer: You're absolutely correct. We don't have to rely on anyone. We set up the procedures and programs, and we put people in place to monitor then. It's a big responsibility, but at least we know that it's our responsibility. 

Q: What future challenges are you facing, and how might you further solidify relationships with your customers?

A: Sawyer: Food safety is always number one. Because of that lack of a kill step, it's always going to be. We believe there is a limit as to how inexpensively one can sell a product. You get to a point where you create a service that is of such value to your customer that it becomes more important than a little bit of price. We have a supply-chain initiative called Full Service Solutions, where we sit down with the customer and ask candidly: Tell me about your heartburn. What keeps you awake at night? If on Monday morning you could snap your fingers and something would be changed in your world to make your life easier, what would it be? From there, we put together a team and focus on things like cold-chain control, warehousing costs, transportation costs, stock rotation, or excessive shrink. These are retail people, not distribution people. So we have launched a program to get close to them, and help them get better at what they do.

Resource Link:
Dole Fresh Vegetables

Keywords: supply chain, supply chain management, produce supply chain, perishable supply chain, supply chain planning, logistics management, inventory management, supply chain risk management, retail supply chain, grocery supply chain, supply chain services

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