When a family run ice cream company based in the Pacific Northwest was purchased by a private equity company, they brought in a new leadership team to help transform the organization.
When a family run ice cream company based in the Pacific Northwest was purchased by a private equity company, they brought in a new leadership team to help transform the organization. The leadership began the process of re-developing all of their internal strategies in order to accelerate growth and improve profitability. Surprisingly, problems began to uncover as the difficulties of manufacturing and transporting ice cream started to overflow.
Many family run businesses find difficulty in managing systems, processes, and costs when they experience significant growth. For example: their customer service department was responsible for managing the supply chain. Their problems ranged from material flow issues and temperature-control issues with their shipping providers. When we visited them in the Pacific Northwest, we found a way to improve these issues and more.
In our diagnosis we found they faced issues finding quality LTL carriers who specialize in frozen products. Not only is it is very tough to find quality LTL frozen carriers in the marketplace, many of them are inefficient at temperature control, which is crucial for the customer’s products.
Their warehouse operations included an off-site frozen storage facility operated by a third-party, as well as their own facilities adjacent to their plant. Their own facilities, however, were in need of a better warehouse management system and locator system. Utilizing a FIFO (First In, First Out) process for their product, we witnessed the challenge of process improvement firsthand. Lastly, the cost of transportation was rapidly growing. Their goal (and ours) was to improve costs, processes, and efficiency.
The LRG Solution
We created three different shipping categories in which to operate after analyzing their systems, processes, shipment patterns, routing, and rates with their carriers. First, we re-routed an eastbound multi stop truckload move that kept carriers from having control over how the product was routed. Then we initiated a full truckload volume move in the southwestern US that would operate very similarly to their current operation. Finally, we implemented multi-stop truckloads to deliver to their West Coast customers who had previously received their shipments via LTL carriers.
Using an MSTL approach aided us in reducing delivery temperature issues and managing the order flow to enhance the cost per pound delivered. Last-but-not-least, we redesigned the warehouse flows, product location, and created a effective, and inexpensive locator system that they could implement and then provided the necessary training.
Finishing On Top
The long-term results included a much more efficient productivity environment in their warehouse. This reduced the headcount needed to pick their product because they were able to locate them accurately and efficiently. In addition, we improved their FIFO ratios using a locator system to ensure food quality standards were met. The transportation design and implementation resulted in a life-to-date savings in excess of thirty percent! Perhaps the best news of all is our switch from LTL frozen activity to a multi-stop truckload strategy. This improved the overall temperature control, ensuring the product would arrive in mint condition.
MORE ABOUT OUR CUSTOMER
Our customer has years of experience in product development creating frozen dessert products including yogurts, sorbets and sherbets, as well as non-dairy coconut, soy, rice, fruit and vegetable desserts. We currently make products for many of the largest U.S. Grocers, as well as for specialty dessert companies.