Demand can be fickle, and what’s hot one day from the next changes rapidly for Food & Beverage companies. When rapid growth in certain products occurs, the supply chain and logistics network has to be ready to keep up. Here are the Top 5 indicators to watch in your supply chain to know if your supply chain is ready to handle the increasing volumes of goods that will flow through it; in particular for Food and Beverage logistics.
Consider these top 5 indicators, or symptoms, that your supply chain may not be ready for rapid growth:
- Do you distribute goods (nationally or internationally) from a single location? Could that location create a bottleneck for deliveries and/or elongate delivery times?
- Are your transportation costs going up, as you try to fulfill goods faster and to more customers?
- Are you struggling to fulfill goods to meet customer expectations (ie. same day order/delivery or within 48 hours)?
- Are products damaged when they arrive to customers, due to rushes in packaging or loading?
- Are new employees struggling to get the training and experience to successfully run the logistics operations?
When leading beverage and health drinks manufacturer, FRS Energy, turned to LeSaint several years ago, they were experiencing many of these indicators. Here’s their story:
Advancing Health and Wellness from the Inside Out
In 2004, a group of health scientists found a way to deliver healthy sustained energy to chemotherapy patients. They developed and patented FRS Healthy Energy formula. Today, the benefits of FRS are enjoyed by athletes, fitness experts, nutritionists and others wanting to lead a healthy lifestyle.
Like many successful businesses, FRS was thriving through an initial rapid growth phase. Their supply chain provider, however, lacked the focus and energy to transition the company from a sprint to a marathon.
A major challenge they faced was the inefficient shipping model of distributing products from a single location in Los Angeles to delivery points across the country. The model often caused deliveries to back up, and linger in the warehouse for as long as five or six days. An alarming number of those orders were being damaged during shipping as well.
FRS needed a new 3PL partner that would help deliver “healthy performance” in its shipping and distribution. That’s when they reached out to LeSaint Logistics’ food and beverage logistics team.
New Supply Chain Network Design Paves the Way for Methodical Planning
FRS and LeSaint got started by taking a holistic and comprehensive look at the data surrounding the current distribution network. They identified many opportunities to refine and re-invent the design of the network.
With a new network design in hand, the implementation team hit the ground running. The team routinely started each week with a conference call, which included as many as twenty participants from both companies.
Tremendous amounts of documentation were gathered in order to keep everyone – from the warehouse to the C-suite – updated on the new network’s progress.
“Since our initial meetings, LeSaint has never wavered from listening, asking questions, then delivering solutions with our best interests at the forefront,” says Al McCurdy, Vice President of Operations at FRS.
A Comprehensive Network Approach Yields Better Performance
After thoroughly examining the supply chain, it was determined that two facilities — one in Ohio and one in California — would optimize product delivery.
By decentralizing shipping locations and engaging some of their most seasoned employees to eliminate training time, LeSaint was able to significantly reduce distribution costs. The benefits were two-fold:
Products and orders were shipped more quickly from the warehouse, arriving to customers in days instead of weeks.
There was a substantial reduction of travel time to the customer, which had a big impact on lowering transportation costs.
As the implementation moved forward, new systems and approaches were adapted to make the supply chain immune to damages during product shipments.
On the packaging aspect of the operation, LeSaint and FRS made significant improvements that dramatically cut down on product damages during delivery. They even went as far as changing the actual box size used for shipping the average order.
Finally, FRS gained 24/7 visibility into its supply chain through LeSaint’s TechKnow™ suite of reporting software. FRS now has every piece of essential documentation available whenever it’s needed. This powerful software has also allowed FRS to invoice by the 2nd of every month, closing billing faster and keeping income streams flowing at a more consistent and predictable rate.
Working hand in hand with FRS, LeSaint delivered the full transition in just 27 days.
Performance That Counts
As a result of the comprehensive improvements to the FRS distribution network, the team is projecting an annual cost savings of 15%. In addition, there has been a 30% reduction in overall miles traveled for less-than-truckload shipments.
LeSaint’s ability to take a multi-faceted operation, like what FRS has, and put it into focus is a differentiator for its customers. “We take an in depth look at the customer’s needs and then engineer and design solutions that address those needs. We’re flexible, and that’s what our customers benefit from the most” says Brian Smith, Director of Client Solutions at LeSaint.
So what’s up next for the FRS and LeSaint team? They are looking to find even more value, this time in FRS’ transportation. “We’ll take a closer look at areas like freight management, procurement, scheduling and labor, and see if we can help them trim expenses further,’ says Smith.