{"id":6720,"date":"2018-08-28T09:28:24","date_gmt":"2018-08-28T16:28:24","guid":{"rendered":"https:\/\/blog-prod.qad.com\/blog\/?p=6720"},"modified":"2018-10-05T11:48:34","modified_gmt":"2018-10-05T18:48:34","slug":"offsetting-rising-transportation-costs-food-beverage-industry","status":"publish","type":"post","link":"https:\/\/www.qad.com\/blog\/2018\/08\/offsetting-rising-transportation-costs-food-beverage-industry","title":{"rendered":"Offsetting Rising Transportation Costs in the Food and Beverage Industry"},"content":{"rendered":"<p>[vc_row][vc_column][vc_single_image image=&#8221;6721&#8243; img_size=&#8221;full&#8221;][vc_column_text]<span style=\"font-weight: 400;\">It is becoming increasingly more expensive to be a food and beverage manufacturer in the U.S. Rising inventory costs, stricter federal regulations and an increasing demand for fresh and <\/span><a href=\"https:\/\/www.qad.com\/industries\/food-beverage\/data-sheet\/frozen-foods.pdf\"><span style=\"font-weight: 400;\">frozen foods<\/span><\/a><span style=\"font-weight: 400;\"> globally can affect year-end profits. One common expense, however, is forcing manufacturers to revisit their supply chain strategy altogether: Transportation.<\/span><\/p>\n<h2><span style=\"font-weight: 400;\">Food (and Beverage) for Thought<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Transportation is one of the highest, yet most common costs associated with supply chain management within the Food and Beverage industry; the steep prices to transport goods are often non-negotiable and steadily increasing. There are a number of factors affecting these cost increases, too, including higher fuel prices, a shortage of skilled drivers forcing higher wages and an increase in the number of shipments due to more frequent deliveries. In fact, <\/span><a href=\"https:\/\/www.qad.com\/solutions\/demand-supply-chain-erp\/data-sheet\/qad-transportation-management-system-data-sheet.pdf\"><span style=\"font-weight: 400;\">transportation<\/span><\/a><span style=\"font-weight: 400;\"> issues are forcing manufacturers to change distribution and production schedules in an attempt to better absorb the financial hit.<\/span><\/p>\n<p><span style=\"font-weight: 400;\"><a href=\"https:\/\/www.qad.com\/solutions\/manufacturing-erp\">Manufacturing<\/a> costs increase when the supply chain is mismanaged or poorly synchronized. This is especially true for <a href=\"https:\/\/www.qad.com\/industries\/food-beverage\">food and beverage<\/a> manufacturers as their products have limited shelf lives and demand varies in each location, though costs can increase even with an optimized supply chain. One way to combat rising costs is by implementing item level forecasting, which takes note of each item\u2019s demand individually by using the historical demand data for the particular item. This helps to avoid products spoiling on the shelf and the redeployment of excess inventory that goes to the wrong location.<\/span><\/p>\n<h2><span style=\"font-weight: 400;\">A Synchronized Supply Chain<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Transportation may be seen as a necessary cost to a food and beverage manufacturer, but as these costs rise around the world, manufacturers will need to find ways to adapt. In a <\/span><a href=\"https:\/\/www.foodlogistics.com\/transportation\/blog\/21018195\/rising-transportation-costs-in-food-manufacturing-a-problem-or-an-opportunity\" target=\"_blank\" rel=\"nofollow noopener\"><span style=\"font-weight: 400;\">recent article<\/span><\/a><span style=\"font-weight: 400;\"> written for <\/span><i><span style=\"font-weight: 400;\">Food Logistics<\/span><\/i><span style=\"font-weight: 400;\">, QAD\u2019s Steve Dombroski discusses the effects of high transportation costs on food and beverage manufacturers and the necessary steps to minimizing unnecessary costs. He speaks to the importance of a synchronized supply chain and the analysis of each piece of the chain to further improve operational efficiency.<\/span><\/p>\n<p><i><span style=\"font-weight: 400;\">\u201cSynchronizing the supply chain is the best approach to solving this problem and will help take a great deal of sting out of increased transportation costs. A synchronized supply chain can allow manufacturers to reduce distribution, manufacturing, inventory and procurement costs, which will in turn increase profits.\u201d \u2013 Steve Dombroski, Sr. Marketing Manager, Consumer, Food &amp; Beverage Markets, QAD<\/span><\/i><\/p>\n<p><span style=\"font-weight: 400;\">To learn more about transportation costs in food manufacturing and the benefits of a synchronized supply chain, <\/span><a href=\"https:\/\/www.foodlogistics.com\/transportation\/blog\/21018195\/rising-transportation-costs-in-food-manufacturing-a-problem-or-an-opportunity\" target=\"_blank\" rel=\"nofollow noopener\"><span style=\"font-weight: 400;\">read the full story<\/span><\/a><span style=\"font-weight: 400;\">.<\/span>[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column][\/vc_column][\/vc_row]<\/p>\n","protected":false},"excerpt":{"rendered":"<p>[vc_row][vc_column][vc_single_image image=&#8221;6721&#8243; img_size=&#8221;full&#8221;][vc_column_text]It is becoming increasingly more expensive to be a food and beverage manufacturer in the U.S. Rising inventory costs, stricter federal regulations and an increasing demand for fresh and frozen foods globally can affect year-end profits. One common expense, however, is forcing manufacturers to revisit their supply chain strategy altogether: Transportation. Food (and [&hellip;]<\/p>\n","protected":false},"author":56,"featured_media":6721,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[182,199],"tags":[535,142,534,309,92,118,517,533],"class_list":["post-6720","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-featured","category-manufacturing-trends","tag-distribution","tag-food-and-beverage","tag-food-and-beverage-erp","tag-inventory","tag-supply-chain","tag-supply-chain-management","tag-transportation","tag-transportation-erp"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.7 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Offsetting Rising Transportation Costs in the Food and Bev... | QAD Blog<\/title>\n<meta name=\"description\" content=\"Transportation is one of the highest, yet most common costs associated with supply chain management within the Food and Beverage industry; 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