2017 INDUSTRY MEETING 

FOR 

USDA FOODS CONTRACTORS AND SUPPLIERS

OCTOBER 24-25, 2017 

ARLINGTON, VA
Business Management 

Improvement

Dave Tuckwiller

Director, AMS, CPS
Business Management Improvement 

(BMI)

• Business Process Review/Re-engineering of 

the USDA Foods program

• Sponsored by FNS & AMS

• Initiated October 2015
 Improve product availability

 Improve on time delivery / shorten delivery periods

 Improve product variety for small states

 Minimize storage and distribution expenses

 Increase demand and supply visibility

 USDA Foods complement program operations

USDA Foods BMI Goals
 Reduce order management administrative overhead

 Address technology challenges

 Integrate more seamlessly with industry commercial 

operations

 Reduce expenses providing little program value

 Redirect savings to more food and customer service/ 

program improvements

USDA Foods BMI Goals
BMI Activity

• Developed the business case for the opportunities 

that came out of the “To-Be” process documentation

• Developed an implementation plan

• Created workgroups (FNS & AMS)

– Determine and finalize the scope for all opportunities

– Identify, determine project success factors, and implement 

pilot tests 

– Develop project plans for full rollout of the business 

changes
Opportunities

•
Processing Program – Current High Level 

Process 

Local selection 

of Processors 

and 

Distributors

Orders Placed 

by States in 

WBSCM with 

Delivery 

Periods and 

FTL –

Entitlement 

Adjusted

USDA procures 

and delivers 

raw FTL to the 

processors –

Entitlement 

Re-adjusted

Draw down 

of inventory 

based on 

actual sales 

to recipients
Processing Program – BMI High Level 

Concept 

Local selection 

of Processors 

and 

Distributors

RA/States 

allocate $ of 

entitlement to 

processing -

Forecast

USDA procures 

through LTC 

and processors 

request 

deliveries 

when needed

Draw down 

of inventory 

& 

entitlement 

adjusted 

based on 

actual sales 

to recipients
• Forecasting

• Long-term Contracting (at least 1 year)

• FOB Origin vs. FOB Destination

• Processor pulling inventory

• Value pass-through

• Transparency through Distributor

• Entitlement Draw Down

Processing Program Challenges and 

Discussion
Direct Delivered (Brown Box) – Current 

High Level Process 

Orders placed 

by States in 

WBSCM in FTL 

quantities –

Entitlement 

Adjusted

USDA procures 

based on 

orders FOB 

Destination –

Entitlement 

Re-adjusted

Vendor 

responsible to 

make 

appointments 

and deliveries 

within 15 day 

window

Payment 

made when 

invoice 

submitted 

and GR 

entered
Direct Delivered– BMI High Level Concept 

USDA/SDA/SFA 

forecast volume 

of product 

needed to 

purchase

USDA 

procures 

when 

Industry 

needs based 

on forecast -

FOB Origin

USDA 

determines 

product for 

DC

Orders placed 

by States in 

WBSCM in 

FTL/LTL/Pallet 

quantities with 

delivery day –

Entitlement 

Adjusted

USDA fills orders 

from DC or 

direct from 

vendor in FTL –

transportation 

management

Vendor 

payment 

made upon 

shipment of 

product

Delivery 

made on 

delivery day

Transportation 

payment made 

upon delivery –

Entitlement Readjusted
• Forecasting

• Long-term Contracting (at least 1 year)

• FOB Origin vs. FOB Destination

• Order quantity – FTL, LTL, Pallet

• USDA Inventory Management

• USDA Transportation Management

• Entitlement Draw Down

Direct Delivered Challenges and 

Discussion
Vendor Input

• We asked for volunteers to participate with us

• We asked for comments/concerns after last year’s 

Industry Meeting

• For those attending ACDA’s annual conference, we 

gave another opportunity for comments/concerns

• Responses have been somewhat limited
Breakout Session – It’s Your Turn

• Each table has a facilitator

• Each table has a set of questions meant to 

facilitate discussion

• We would appreciate your feedback for the 

next approximately 2 hours
Breakout Session - Topics

• Forecasting

• Supply Planning

• Long-Term Contracting

• FOB Origin Purchasing

• Transportation Management

• Checkloading

• Distribution Centers

• Supplier Management

• Processing Program

• Electronic Capabilities

• Assortment Planning
Discussion
Wrap Up

• We hope the discussion doesn’t stop here –

talk to others in your organization, ask the 

questions, and send responses to us

• Next steps

– Pilot test, then pilot test

– System changes and updates

– No big bang, will take time
Additional Questions/Comments

CP-BPRINFO@ams.usda.gov