Price is a significant consideration when working in a fresh supply chain. In a foodservice or retail produce purchase, each cost, even though they may only be a few dollars here and there, quickly add up from one end of the supply chain to the other.
Most of the time a buying strategy is straightforward, purchase the produce and pay all the transportation costs with all the existing set of providers. Sometimes that may be a direct buy from the grower, and you send your truck to pick up at all the growers you are purchasing from. Maybe there is an intermediary, someone helping with sourcing, a broker, or buying group. They add in their costs to the mix. Then you have freight costs, running trucks throughout the country and there are costs added in if the trucks aren’t optimized with vacancies in the trailers or running more trucks than needed, etc.
Knowing all those costs, it seems crazy to add in another charge- one for consolidation. That’s taking away from your margins and is putting yet another person in the supply chain. We want to show you that even though there may be an up-front cost with produce consolidation, it offers significant savings on the back end. We’ve seen customers save anywhere from $1.5 to $3.5 million a year.
Savings Through Load Efficiencies
This is where consolidation really comes in with savings. Optimization begins with bringing produce to a central warehouse facility so that it is palletized to the customer’s order. Because we’re working with your growers and many more, we can put together an order with the exact produce you need. Once a consolidation team understands your orders, the optimization begins. Sometimes that means reducing trucks, which is where savings is really seen. One of our customers was able to reduce 4 trucks a week at $10k per truck. That added up to about $1.5 million in annual costs savings.
Also there is a time efficiency that takes place with consolidation. By taking away multiple pickups from growers and having it brought to a consolidation warehouse, hours of waiting at grower facilities are saved, and when you are picking up from multiple growers, a few hours at each pick-up compound. Consolidation gets produce on the road faster through this one simple change.
- Centralized warehousing allows optimization of the pallets and loads
- Once we understand your purchasing rhythm, we will be able to deliver load savings by
reducing number of trucks - Leverage pick-up efficiencies – we work with your current suppliers
- Our goal is to fill every pallet space every time
- Reduces carrier pick-ups
- Allows immediate and stronger negotiation with carriers
- Savings through reducing number of trucks required and freight rates per truck
Savings Through Inventory Management
Inventory is improved because consolidation allows optimization of the outbound trucks. Instead of planning your purchasing around filling a truck with product you may or may not need, or leaving truck space because you couldn’t fill a truck, consolidation puts exactly what you need on a truck and delivers it at the exact cadence. This means fresher product with more shelf life- nothing more or less.
Also another point of savings, when you don’t have enough of an item with your orders, sometimes you turn to local terminal market buys. These typically are at peak market rates and may be old inventory, so you end up paying a premium for less-than-optimal quality. Optimization of your orders reduces those high dollar buys.
- Less Stales & Out of Stocks
- Higher frequency of deliveries
- Faster response to changes in demand or product issues
- More purchasing control
- Better utilization of your warehouse
- Reduces hard to manage LTL shipments
- Savings through reduction in waste and maximizing of sales
Savings Through Freshness
As mentioned above, less pick-ups means more consistent cooling of produce because as each truck stops to pick up at a grower, the doors are opened causing fluctuation of temperatures. Consolidation takes that time and inconsistency out of the picture because it all goes directly from grower to one facility. Time and consistent temps are the key to capturing as much quality and shelf life possible.
We also consolidate for multiple customers which means everyone benefits from economy of scale.
- Trucks dispatched and on the road faster and with greater frequency
- Reduces Shrink
- Less loading activity means better handling of product
- Savings with longer lasting, higher quality product
Savings Through Direct Relationships
One worry you may have with consolidation is that you’d have to buy our product, change to our grower network, and give up the relational capital you’ve developed in your own purchasing. Not at all! The great thing with consolidation is that we may already be working with your vendors, and we respect your direct relationships. We are also bringing in more opportunity to connect with other grower / processors, giving you a chance to discover your next find.
The great thing about consolidation is that we are using connection and coordination to benefit more people in the supply chain and not less. We know savings comes through strong networks and the more the merrier!
- Negotiate directly with a broader base of producers
- This expanded base of producers supports continuity of supply
- Less reliance on 3rd parties & LTL
- Greater access to small and/or specialty producers and product lines
- This results in more vendors competing for your business
- Savings through better deals
Savings Through Supporting Your Operations
You may be thinking, consolidation sounds great, but there is simply too much work for my team and myself. Yes, consolidation done well does take dedicated team members, and some in our industry offer the idea of consolidation but not the dedicated consolidation team. That’s not us, we bring you consolidation and access to a dedicated team.
We understand the constraints of buyers but know consolidation offers savings of costs, time, environmental, and quality that we built a business to support our customers who would gain through consolidation. Again we see costs savings begin in the millions, and that is without putting more burden on your exiting ops team.
- Independent quality checks at source (the least disruptive place to spot problems)
- More frequent inbound
- Optimizes truck utilization – fewer trucks to manage
- Right-sized orders arriving more frequently drive better utilization of
valuable warehouse space - Comprehensive reporting and tailored communication based on your needs
Savings Through Supporting Your Team’s Capabilities
At this point you’re thinking, a consolidation team sounds great but it also sounds expensive to consolidate trough Fresh Avenue. What if I have my own team handle this?
This can put extra pressure and work on your existing team and then there’s training time and the learning curve of consolidation. Asking too much of your team may increase your company’s attrition rates.
This is a classic case of hiring the specialist that understands the job and are the experts— so there is not the additional stress to your team or cost of time, learning curve, or additional overhead on your part to make consolidation happen. Our team partners with you to support your team with consolidation.
- Lightens your workload
- Supported by the Fresh Avenue purchasing and logistic team and their 20+ years
of consolidation experience - Dedicated Fresh Avenue team members assigned to your account
