The editorial staff and the editorial advisory board of Material Handling & Logistics congratulate Kraft Foods, Komplett ASA, Jack Wolfskin and Pepsi Logistics Co., Inc., for being selected as MH&L’s first class of first-class innovators.

Candidates for MH&L’s Innovation Awards are selected from among the stories run in the magazine and online during the course of a year. Winners are selected not only for their smart application of science and technology, but for integrating those elements into their corporate culture, in support of business goals and societal needs.

MH&L also congratulates the technology vendors who partnered with our winners on these projects:

On the following pages, their stories are summarized and updated. You’ll also see some of our judges’ comments, explaining why we thought these companies are exemplary innovators.

Kraft Foods: Excellence in Sustainability

Kraft Foods has built sustainability into its business strategy. Through the EPA-sponsored SmartWay partnership, Kraft adopted new technology like auxiliary power units to reduce idling at distribution centers and many plants. It also reduced its governed top speed on all over-the-road tractors from 65 to 62 miles per hour.

Trucking Alternatives: Kraft ships wheat via waterways to its Toledo, Ohio, flour mill. Now, ships make bigger deliveries less frequently. The company has saved a million road miles, replaced 10,000 truck shipments and reduced 2,000 tons of CO2 emissions in the process.

Packaging: Kraft came up with new designs that use less material and let it ship more products per pallet, meaning fewer trucks on the road. For example, its redesigned Crystal Light powdered beverage packaging uses nearly 10% less material per package and 25% less material in its shipping trays. That eliminated 250 tons of packaging per year. Kraft can fit 33% more packages per pallet, meaning fewer trucks on the road.

Facilities: Kraft’s 400,000-square-foot Springfield, Mo., warehouse is actually underground, using natural caves to warehouse products. The caves maintain a cool temperature, and facilities use about 65% less energy than conventional warehouses, and reduce CO2 emissions by about 4 million pounds annually.

The company’s 800,000-square-foot Morris, Ill., warehouse is LEED-CI Gold certified. It uses energy-efficient fluorescent lighting with multi-level lighting controls, resulting in a 60% reduction in lighting energy usage. Its HVAC ventilation system improves air quality and reduces power consumption by 40%.

High Technology: Through its “Super Truck” initiative, using software provided by Transportation/Warehouse Optimization (TWO), Kraft can optimize outbound replenishment truckloads, maximize weight and cube and ultimately put more products on fewer trucks. It has already taken the equivalent of about 1,500 trucks off the road, which takes over a million miles off of the U.S. highway system.

Kraft Foods’ private fleet and its top 50 carriers use Oracle Transportation Management to measure truck movements and design new trip segments to minimize “empty miles.” Last year this helped the company eliminate more than 500,000 miles.

Since Kraft’s story ran in MH&L:

In May Kraft announced expanded sustainability goals to include its Cadbury and LU businesses acquired since 2007. By the end of 2015 Kraft Foods plans to:1

  • Increase sustainable sourcing2 of agricultural commodities by 25 percent;
  • Reduce energy use in manufacturing plants by 15 percent;
  • Reduce energy-related CO2 emissions in manufacturing plants by 15 percent;
  • Reduce water consumption in manufacturing plants by 15 percent;
  • Reduce waste at manufacturing plants by 15 percent;
  • Eliminate 100 million lbs. of packaging material;
  • Reduce 50 million miles fromtransportation network.

“As we near the end of 2011, we’re making steady progress toward our expanded transportation/distribution sustainability goal,” says Mike Cole, senior director, North America transportation, for Kraft Foods. “Our success is the result of many individual projects. We’re looking at our supply chain end-to-end around the world for opportunities, as our approach is about all of us taking steps, big and small, to do our part.”

Judges’ Comments:

“I found it interesting that such a large company attacked multiple issues with clear common sense approaches to lower costs and improved performance.”—Thom MacLean

“Kraft illustrates that most companies have lots of ‘fat’ they can reduce, whether through environmental/sustainability initiatives or just blocking-and-tackling efforts.”—Ron Giuntini

“Kraft does not rely on the implementation of a single technological solution. Instead it optimizes many areas across the company through design and process improvements. While not all of these changes would be applicable to all companies, the mindset of evaluating potential reduction in materials, pollution and costs should stimulate thinking on the part of others to evaluate their own operations.”

—Bert Moore