The next time you stop at a take-out food chain or call for a late-night food delivery, you’ll be joining millions of Americans whose fast-paced schedules have made food “to go” one of the hottest segments of the industry. In fact, more restaurant meals are now served as take-outs rather than as sit-down meals, according to recent studies.
This demand consumes plenty of plastic to-go boxes, as well as tabletop paper products. Among the leading North American providers of these items is InnoWare Inc., (formerly Duni Americas) and it must have an efficient and responsive distribution network to be competitive.
The company provides solutions for any occasion when people consume food and drink, whether at home, in a restaurant, for take-away, at a hotel or within the food service industry. Distribution challenges have presented significant hurdles, some of which it has only recently cleared.
“Until last year our experience with outsourced providers of logistics services had not been very good,” explains Mikael Nordin, COO and President Americas. “At one point our overseas group had trouble with a primary logistics provider, and after we terminated that relationship, we went back to managing the process ourselves.”
He could see, however, that with all the competing demands for time and resources within the company, distribution management wasn’t getting the full attention it needed. For example, on-time delivery was in the low 80s, as was the company’s inventory accuracy rate.
“These rates were clearly not good enough for us to provide an acceptable level of customer satisfaction,” Nordin says. So the company searched again for a third-party logistics partner. “Initially we spoke with some of the larger players and they had the capability but not the flexibility we wanted.”
Finding The Right Partner
InnoWare serves a focused North American market, moving low-density shipments out of locations in Wisconsin and Georgia to locations across the U.S. The characteristics of its shipments were difficult to manage for consistent and efficient delivery. “We had customers buying off of two purchase orders and we wanted to get those down to one purchase order so we could combine shipments for savings,” Nordin says. “We found ourselves with high costs for LTL by weight.”
The trick was to find a third party that was large enough to cover North America and that could handle InnoWare’s volume and complex distribution patterns.
The company has plants in Menomonee Falls, WI, and Thomaston, GA, both of which ship product nationally. An independent consultant studied InnoWare distribution patterns and recommended that it locate primary distribution operations at Nashville, TN. Runners-up were Louisville, KY and Indianapolis, IN.
Subsequent changes in InnoWare’s customer mix have resulted in continuing direct distribution from Menomonee Falls, with Nashville serving as the distribution point for all products from Thomaston, as well as some from Menomonee Falls.
“Once we knew that Nashville was an optimum distribution point for us, we developed a finalist list of three providers that could potentially meet our needs,” Nordin says. “We then conducted an in-depth, objective analysis of each 3PL.” A scorecard system was employed to provide side-by-side comparisons of each company. Criteria included:
- Company interview;
- Executive management involvement;
- Cultural match;
- Financial value of budget presented;
- Bench strength (market presence in Nashville);
- Implementation time line;
- Overall service capability;
- Systems capability (TMS/WMS–Web);
- Transportation services value.
A perfect score was 27, and the contenders’ scores were 10, 18 and 23.
With the highest score, and based on the overall impression of Nordin and others at InnoWare, Ozburn-Hessey Logistics was chosen as the sole 3PL provider. “OH Logistics made a fantastic presentation,” says Nordin. “Plus, our one-on-one discussions were way above anything we’d had before.”