“These stipulations are difficult to achieve without a consolidation program,” says Sommavilla. “And our customer is also producing a report card on Coles’ performance. They know if we are a day late or a day early. So by consolidating with several other food manufacturers in our region, we can fill the truck, share the freight, and get there on time. These guaranteed weekly deliveries run like clockwork, and the program eliminates all the aggravation that could occur in servicing one of the biggest customers in the country.”
Coles operates two manufacturing facilities—one in Muskegon, MI, and the other in North Liberty, IA. Both facilities send product via third-party carriers to Hanson’s consolidation center in Hobart, IN. “It could be once a week using five trucks, or it could be using those five trucks over two or three days during a week,” explains Sommavilla. Inventory is received at Hanson’s dock and either flows through for delivery or it is put away for a few days until it is married up with the other vendors in the program.
Beyond the benefits of reduced costs and increased service levels, the MVC program allows Coles to focus fully on the specific needs of its customer. “We can deliver to each of their multiple national DCs with ease, and yet our sales team doesn’t ever have to be concerned about having to take calls from the retailer asking where its shipments are,” Sommavilla says. “We also don’t have to worry about having to defend our service position when our sales team meets the customer because of our excellent report card—which leads to additional sales and additional SKUs sold.”
Another benefit is worry-free billing. “There are zero issues with the accounting process involved,” Sommavilla reports. “Some MVC programs out there are a nightmare, like when they bill you for things like pallets that get out of rotation in the warehouse. We don’t run into accounting wars in our relationship with Hanson that people sometimes encounter with other providers out there.”
“The beauty of having Hanson handle the logistics and transportation for us is that it allows us to focus on what we do well, while the transportation and logistics experts get our products to our customer on time,” continues Sommavilla. “They are the last ones to see my customer, so Hanson plays a monumental role in protecting the Coles brand for us.”
Here’s To You!
Gehl Foods provides ready-to-drink beverages for a major international retailer, shipping nearly 1,000 trucks annually through the MVC program it operates with CaseStack in Fayetteville, AR. “We began this program in May of 2010 in response to our customer’s increased attention to on-time delivery and its associated savings in the supply chain,” explains Slawny. CaseStack is the customer’s preferred MVC provider, who has significantly reduced for Gehl the number of outbound shipments required while eliminating any concerns about securing on-time delivery appointments.
Slawny adds that Gehl could not afford to take a chance on the LTL open market for meeting these strict deadlines 100 percent of the time. “We chose to partner with CaseStack because we knew they had an existing relationship with our customer. They had guaranteed slots and guaranteed trucks in the lanes we required. So for us, this program eliminates those doubts about spot-buying transportation achieving 100-percent on-time delivery.”
Because of the assurance that shipments will arrive on time, Gehl does not have to budget for increased costs for late deliveries.
The process is strictly a cross-dock operation. The product is produced at Gehl’s manufacturing plant in Germantown and CaseStack manages transportation from Gehl’s dock to CaseStack’s cross-dock facility in Chicago. “So we have only one contact to schedule all of the loads for this customer, instead of having to worry about scheduling multiple separate inbounds.”
CaseStack picks up on Monday and Tuesday and cross-docks the product by mid-week. Gehl’s products are pooled with products from other vendors in the program and consolidated loads are delivered to each of this customer’s national DCs. “So our product could be at my customer by Friday of that same week.”
Slawny reports that the program required a change in Gehl’s production calendar. “It was painful for about seven days. But once we got used to the new schedule, it worked out just as well and sometimes better than our old schedule. Once you get the new system in place, you have to adjust to it only once.”