Food has been much on the minds of just about everyone this summer, and not because it's barbecue season. Food costs have been rising fast. According to the Department of Labor's Consumer Price Index Report for June, food prices grew 0.8 percent during the month, including the biggest jump in vegetable prices in four years.
It's not just a U.S. phenomenon: The International Herald Tribune reported in July that food prices in Europe had risen by 6.4 percent in a year. The reasons for the cost increases are manifold. Much of it has to do with production costs. Material and packaging costs are rising, too. And some of it is directly related to distribution expenses, especially the cost of transportation, which has been rising rapidly as a result of high diesel prices. There's not much logistics managers in the food industry can do about rising fuel costs. And most have already taken steps to cut waste from their distribution networks. But there still may be some things managers can do to make those networks even more efficient.
One grocer that has done just that is featured in our cover story this month. The Co-operative, the largest grocer in the United Kingdom, has revamped its distribution network and updated its software tools to better serve its 3,300 stores. The exercise was not aimed primarily at costs. The company needed to coordinate the flows of three different types of products and reduce stock-outs, among other things. As James Cooke reports in the story, which begins on page 41, it took much effort and investment, but it provided a significant payoff for the company.
We lead off this issue's features with an interview with Gen. Norton Schwartz, commander of the U.S. Transportation Command since 2005. The interview is worth reading for the Air Force veteran's insights into a logistics network that's about as complex and challenging as they get. Since our interview, Gen. Schwartz has been nominated by the White House to become the next Air Force chief of staff.
We also offer some more down-to-earth pieces this month. Contributing Editor Mark Solomon reports on how high-tech tools are playing a larger role in one of the oldest and most frustrating challenges for logistics managers—stopping cargo theft. Editor at Large George Weimer looks at improvements in tools for managing lift truck batteries. And we offer a report on how lean principles may be applied to DC labor management. Finally, we add a new column to our lineup. Editor at Large James Cooke, who has had the technology beat for a couple of decades with us and other logistics magazines, offers his perspective on technology for the logistics market. You will find his initial offering on page 39.
Gartner, Inc.
