Market Overview

Success Is Sweet For Hershey, A Shipper Of Choice

Success Is Sweet For Hershey, A Shipper Of Choice

The Hershey Company (NYSE: HSY) earns recognition as a "Shipper of Choice" because of  efforts to optimize its network and reduce its carbon footprint.

""We are proud of this focus," Hershey spokesman Jeff Beckman said. 

FreightWaves and its partner Convoy conducted a survey to determine the top 25 manufacturers, distributors and retailers that do the best job in removing supply chain inefficiencies. These companies, voted on by carrier members of the Truckload Carriers Association and members of the Blockchain in Transport Alliance, take additional steps to ensure good relationships with their carrier partners through efforts such as providing accessible facilities and fighting driver detention. 

Iconic American chocolatier and sweets maker Hershey tied for 18th place, alongside flooring manufacturer Shaw Industries.

Hershey has focused on creating efficiencies by unloading all inbound shipments to its distribution centers within 24 hours, which reduces the total number of trailers needed and cuts fuel use at Hershey's distribution centers.

"For us, this is a big win, and we have saved unloading detention spend in the process," Beckman said.

Hershey has also focused on increasing the payload on its distribution center-to-customer shipments to reduce the number of trucks on the road, he said.

A desire to work with customers and supply chain partners also makes the sweets maker stand out.

"Communication between supply chain and our commercial partners is necessary to understand and better support the needs of retailers," said Josh Veara, business unit leader for Hershey's Kisses at the West Hershey plant. Veara's comments are from an April 9 post of Hershey's blog, The Plume.

Hershey is in the midst of a multi-million-dollar effort to modernize its supply chain to accommodate consumers' changing preferences to use technology to inform purchasing decisions, according to an October 2018 Supply Chain Dive article. 

"By leveraging consumer insights and new capacity, our team drove strong growth and share gains during the Halloween and holiday sales period, while improving our sell-through and reducing markdowns," Hershey chief executive officer Michele Buck said during her company's fourth quarter 2018 earnings call in January.

Hershey said during its third quarter 2018 earnings call in October 2018 that it has invested more than $150 million in U.S. supply chain advancements. The investments will enable the company to have a more flexible supply chain.

"Hershey is clearly customer-focused, which helps to drive improvement for carriers," said Mary Long, director of the Supply Chain Forum with the Haslam School of Business at the University of Tennessee – Knoxville. Long was previously vice president of logistics and network planning at Domino's, and she has also had extensive supply chain experience through her work at Campbell's Soup, General Mills, Pillsbury and Quaker Oats/Gatorade.

"If the focus shifts to on-time deliveries, then fixing your upstream procedure constraints can improve customer service results," Long said.

The company also recently promoted Jason Reiman to senior vice president, chief supply chain officer. Reiman has over 25 years of experience at Hershey, serving in executive roles in which he oversaw all aspects of the supply chain, including manufacturing, engineering, supply chain planning and logistics for the U.S. and international markets.

Supply chain efficiencies can manifest itself across the board, including areas such as marketing. For instance, Hershey now uses "Simple Packaging," which is the redesign of packaging so that a retailer can use the packaging to serve as a display case. That effort enables a retailer to have more creativity in how to use their floor space, Veara said.

"If we can do something that decreases the work for our retailers while continuing to deliver products customers love, then we're doing our job. In the process, we're driving efficiency not just in our own supply chain, but also in our customers' supply chains," Veara said.

Image Sourced From Pixabay

Posted-In: Freight Freightwaves Hershey Logistics shipping Supply ChainNews General Best of Benzinga


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