2009 Innovator: Tree of Life #8

Tree of Life Transforms Transportation Operations

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Tree of Life Transforms Transportation Operations

Tree of Life, a distributor of natural, organic, specialty, ethnic and gourmet food products in the United States, was using a homegrown AS/400-based host system for sales order entry and warehouse management.
However, the system was forcing its buyers to use too much “art” and not enough “science” in their decision making.

Tree of Life’s system, for example, did not have the ability to enter plans, bookings or automatically adjust for lead time changes. As a result, the distributor’s procurement process provided a very narrow view of what inventory was needed and when.

In addition to overhauling its procurement process, the St. Augustine, FL-based distributor also needed to revamp its inbound and outbound logistics network to battle rising freight costs, improve delivery performance and address growing transportation complexities.

To more efficiently flow products from its suppliers to its customers, Tree of Life transitioned from a regional to a national procurement structure.

Each Tree of Life buyer is now responsible for managing a defined group of suppliers in a specified region for the entire company. This provided a single point of contact within Tree of Life for each supplier.

Tree of Life also transformed into a centralized transportation and logistics operations to increase visibility into its inbound and outbound logistics network. As part of this transition, Tree of Life now has dedicated transportation specialists making carrier-based decisions for thousands of weekly shipments. With shipment optimization and consolidation as their top priority, the team looks for every opportunity to work with carriers proven to deliver the top rates and performance.

To support its organizational and operational changes, Tree of Life licensed and implemented several solutions from JDA Software Inc., Scottsdale, AZ, including the following: Advanced Warehouse Replenishment; Transportation Planning; Fleet Management; and Space Planning

According to Laurie Johnson, Tree of Life’s vice president of inventory management, JDA solutions have been instrumental to its business transformation.

“Over the past few years we’ve transformed our strategy and our business model,” says Johnson. “At the same time, we’ve become very self-sufficient with the technology and, not coincidentally, very successful in achieving our business goals. Certainly we’re delighted with these accomplishments and recognize we’ve gotten to this point with the help of JDA Software.”

As a result of its supply chain reorganization and JDA solution implementation, Tree of Life has realized impressive results, including the following:

• Increased truckload shipment capacity from 60-65 percent to 80-85 percent by identifying ways to consolidate shipments into bigger loads;
• Reduced the number of truckload and LTL carriers from 200 to 40, including 30 core carriers;
• Decreased inventory levels by 12 percent in the first eight months following the JDA implementation;
• Improved economies of scale, communication and supplier compliance/relations by assigning each supplier with a single point of contact within Tree of Life;
• Increased forecast accuracy and fill rates;
• Streamlined planogram creation for major grocery customers from a process that would formally take one to two days to now taking one to two hours.