Dutch firms combine logistics to cut costs and pollution
operations for frozen products with Douwe Egberts and Masterfoods
in order to make significant environmental and cost savings.
As from this autumn, retail outlets will receive Douwe Egberts coffee and Unipro Bakery products from the same lorry and at the same time. Masterfoods is scheduled to join the scheme from March 2005.
Products from all three firms will be stored and frozen at a new distribution centre in Utrecht by logistical service provider Van Heezik.
This could be the shape of logisitics operations in the future, especially in the high-cost field of frozen food where energy costs have shot up. And with retailers reluctant to raise prices, it is suppliers and manufacturers who have had to bear the burden of rocketing energy prices.
On top of the cost element, there is increasing government pressure on manufacturers to cut out harmful emissions wherever possible. The EU ETS scheme comes into force next year, obliging companies to be more aware about their emission levels.
The three firms involved certainly believe that the innovative partnership will be of great mutual benefit. Due to customer overlap, the collaboration will not only allow the three parties to improve their customer service, but will also lead to significant environmental benefits.
Unipro estimates that hazardous emissions such as CO2 could be reduced by up to 30 per cent.
"These environmental benefits are mainly caused by the reduction in the number of trips and the increased load sizes," said Unipro supply chain manager Hugo Jans.
CSM has long believed in increasing efforts to achieve synergies within CSM group divisions. What makes this scheme so interesting is the fact that the group has looked to other industry leaders in order to make supply chain improvements, specifically in the fields of transportation and distribution.
"The combined extradition of our products will produce not only greater efficiency for all partners, but will also raise the standard of service to our customers," said Jeroen Janssen Lok, international supply chain director at Douwe Egberts and a key initiator of the project.
The number of participants in the scheme might even be increased further in the future. Distribution costs for frozen products are high, and other firms might well show an interest in the concept as a viable means of cutting down on costs.
"Supply and distribution of frozen products is an important matter," said Dick de Brouwer, market logistics manager at Masterfoods.
"We expect that more manufacturers to dovetail themselves into this formula and this way of doing things as there are major environmental advantages to be gained."
The partnership was officially given the green light by K.M.H. Peijs, Dutch minister of transport, public works and water management. Peijs said that the project was a good example of innovation in the Dutch government's Transport Savings Programme.
"The market takes the initiative, the government creates a good innovation climate and support through, for example, feasibility studies," said the minister.
Unipro Bakery specialises in the development, production and sale of a wide range of bakery ingredients and frozen products for professional bakers and bake-off outlets in the Netherlands. The main brands are Molco and Waldkorn.
Masterfoods, a Mars business unit, operates in the Netherlands from two establishments, and manufactures snack foods and main meals. Douwe Egberts, owned by Sara Lee, specialises in high-end coffee.
