Sunny Delight Gains Sweet Supply Chain Savings
2004 was an exciting time for Sunny Delight Beverages Co. The company was sold off by Procter & Gamble to private equity firm JW Childs, and quickly began building up its business infrastructure, which included the need for a scalable transportation management and shipment system. During this time, P&G had agreed to provide service and support for up to a year, and SunnyD had to move quickly to establish a solid infrastructure in order to get its products to market without any significant gaps.
Cincinnati-based SunnyD, which at the time of purchase had annual sales in excess of $550M, did not have private or dedicated fleet service to its North America customer base, and existing carrier contracts were about to expire as capacity was not secured.
SunnyD needed a smooth transition to help ensure the right products would be on store shelves at the right time. “The scale, technology and knowledge of the industry that is required to be successful was not something SunnyD wanted to take on,” says Jim Glendon, supply chain director for SunnyD. Instead, the company decided to completely outsource its transportation management to a third party logistics (3PL) provider, which allowed the company to shift its focus to continuing the growth of its business and strengthening its core competency of producing juice-based drinks.
Solution:
Looking to leverage a 3PL’s people, processes and technology to effectively manage the transportation function, SunnyD issued an RFP in July. There were five companies vying for SunnyD’s transportation, which would be all via refrigerated trucks — a challenge at that time due to a capacity shortage in the market. The field was then narrowed down to two finalists, where site visits were conducted and ultimately, SunnyD electing to partner with Transplace. “Transplace was right for us, both from a cost as well as a technology standpoint,” says Glendon. In addition, having done some work for P&G, Transplace was very familiar with SunnyD’s operations. Glendon sites, “It was Transplace’s scale, ability to negotiate good rates from carriers, impressive team and the fact that their technology was very thorough in terms of their project management and how they planned to bid our business that won us over.”
Transplace was selected in September 2004 and by February 1, 2005, the Transplace system was up and running, including carriers under bid. According to Glendon, “Transportation-wise we were able to separate from P&G – a full six months ahead of the required separation date.” That April, SunnyD cut all logistical ties with P&G when it moved to a new ERP system. The transition to Transplace “was very fast and efficient. We had the total package in place and for us, it was a very smooth start-up,” adds Glendon.
In 2007, SunnyD acquired two additional brands from Kraft, Fruit20 and Veryfine, which was new territory for the company where dry van transportation was added along with another production facility. Again, SunnyD also had to move under a short timeframe. “The whole transition for us was 120 days, from when we closed the deal to when we cut over from Kraft,” says Glendon. “Transplace delivered in record time. Sitting on our integration team, they had a thorough understanding of the project – putting together our carrier package out of the new plant in Littleton, Mass., and we ended up with a very good carrier base, both from a cost and service standpoint.”
Today, Transplace handles all of Sunny Delight’s outbound transportation and the majority of its inbound. Transplace negotiates rates with carriers and does the day-to-day carrier management, which includes tendering the loads, scheduling them into plants, and handling freight payment. It also sends each carrier a monthly performance scorecard. “We have annual carrier reviews, where I go to Transplace’s offices and we sit down with our top ten carriers and talk through cost and performance issues and any other areas that either one of us needs to address”. Glendon has stressed over the years that he wants “our carriers to see SunnyD and Transplace as partners so they know that when Transplace talks to them, it really is SunnyD.”
In addition there is a semi-annual business review between Transplace and Sunny Delight’s management teams. “This last review though, we changed it up and had Transplace come out to our Littleton plant. We’re going to start doing these regularly at the plants so the folks there have a chance to understand more about Transplace and vice versa.”
To meet SunnyD’s transportation challenges swiftly, Transplace implemented the following solutions:
Outsourcing its logistics management to Transplace has increased visibility and yielded bottom-line benefits. “We saw a 40 percent reduction in line-haul rates through the first 5 years of our relationship,” Glendon says. This was the result of several initiatives, including use of a dedicated fleet in some areas, better consolidation of LTL shipments and use of Transplace’s Collaborative Bid Module. “Of course, cost doesn’t really matter unless we are getting the service, and the service has been right at our target,” he says. “The technology Transplace has, in terms of their business intelligence reporting and exception reporting and their whole transportation management solution, helps maintain our high service levels.”
Areas of Savings Delivered
Additional Value
As Transplace has grown in the CPG industry, Glendon cites the opportunity to work with other customers such as Del Monte, Colgate-Palmolive, and Chicken of the Sea to explore potential collaborative opportunities, discuss common CPG challenges, and share industry expertise. Adds Glendon, “We’re utilizing the scale and their technology they bring to the table to help improve our costs as well as service.”
SunnyD’s relationship with Transplace continues to grow. Glendon utilizes Transplace’s market knowledge and shares that with others across the company. “I’ve been able to share results from our semi-annual reviews with our CEO and show our transportation costs over the last five years and the savings we’ve realized,” adds Glendon.
Glendon also commends Transplace for its use of carriers that participate in EPA’s SmartWay program. “As a company, SunnyD issues a sustainability report annually. It is great that we can report that we are SmartWay certified because of the carriers that Transplace is using on our accounts. This is important to us because we know those carriers are not only doing what is good for the environment, they are doing what is smart from a business standpoint and that saves us money.”
“We certainly feel that we made the right decision in outsourcing this part of our business, and that we chose the right partner. It’s a relationship that has continued to grow as our business has expanded and Transplace has more than met the challenge in providing new or different services and at the same time, working hard to reduce our costs,” concludes Glendon.
Cincinnati-based SunnyD, which at the time of purchase had annual sales in excess of $550M, did not have private or dedicated fleet service to its North America customer base, and existing carrier contracts were about to expire as capacity was not secured.
SunnyD needed a smooth transition to help ensure the right products would be on store shelves at the right time. “The scale, technology and knowledge of the industry that is required to be successful was not something SunnyD wanted to take on,” says Jim Glendon, supply chain director for SunnyD. Instead, the company decided to completely outsource its transportation management to a third party logistics (3PL) provider, which allowed the company to shift its focus to continuing the growth of its business and strengthening its core competency of producing juice-based drinks.
Solution:
Looking to leverage a 3PL’s people, processes and technology to effectively manage the transportation function, SunnyD issued an RFP in July. There were five companies vying for SunnyD’s transportation, which would be all via refrigerated trucks — a challenge at that time due to a capacity shortage in the market. The field was then narrowed down to two finalists, where site visits were conducted and ultimately, SunnyD electing to partner with Transplace. “Transplace was right for us, both from a cost as well as a technology standpoint,” says Glendon. In addition, having done some work for P&G, Transplace was very familiar with SunnyD’s operations. Glendon sites, “It was Transplace’s scale, ability to negotiate good rates from carriers, impressive team and the fact that their technology was very thorough in terms of their project management and how they planned to bid our business that won us over.”
Transplace was selected in September 2004 and by February 1, 2005, the Transplace system was up and running, including carriers under bid. According to Glendon, “Transportation-wise we were able to separate from P&G – a full six months ahead of the required separation date.” That April, SunnyD cut all logistical ties with P&G when it moved to a new ERP system. The transition to Transplace “was very fast and efficient. We had the total package in place and for us, it was a very smooth start-up,” adds Glendon.
In 2007, SunnyD acquired two additional brands from Kraft, Fruit20 and Veryfine, which was new territory for the company where dry van transportation was added along with another production facility. Again, SunnyD also had to move under a short timeframe. “The whole transition for us was 120 days, from when we closed the deal to when we cut over from Kraft,” says Glendon. “Transplace delivered in record time. Sitting on our integration team, they had a thorough understanding of the project – putting together our carrier package out of the new plant in Littleton, Mass., and we ended up with a very good carrier base, both from a cost and service standpoint.”
Today, Transplace handles all of Sunny Delight’s outbound transportation and the majority of its inbound. Transplace negotiates rates with carriers and does the day-to-day carrier management, which includes tendering the loads, scheduling them into plants, and handling freight payment. It also sends each carrier a monthly performance scorecard. “We have annual carrier reviews, where I go to Transplace’s offices and we sit down with our top ten carriers and talk through cost and performance issues and any other areas that either one of us needs to address”. Glendon has stressed over the years that he wants “our carriers to see SunnyD and Transplace as partners so they know that when Transplace talks to them, it really is SunnyD.”
In addition there is a semi-annual business review between Transplace and Sunny Delight’s management teams. “This last review though, we changed it up and had Transplace come out to our Littleton plant. We’re going to start doing these regularly at the plants so the folks there have a chance to understand more about Transplace and vice versa.”
To meet SunnyD’s transportation challenges swiftly, Transplace implemented the following solutions:
- Transportation Management Solution (TMS) – controls the planning and execution for all shipments from SunnyD plants to retail locations and mass merchandisers nationwide.
- Collaborative Bid Module (CBM) – this solution enabled SunnyD to lock in rates and establish committed carrier capacity for an estimated 30,000 annual refrigerated loads. A routing guide was also developed providing reputable, dependable carriers at all locations nationwide.
- Scenario Pro Technology (SPT) – provided optimization solutions such as mode selection, LTL consolidation, carrier assignment, continuous move mating and shipment routing. This tool was essential for Transplace engineers to analyze and develop solutions that were specific to SunnyD’s specific needs.
Outsourcing its logistics management to Transplace has increased visibility and yielded bottom-line benefits. “We saw a 40 percent reduction in line-haul rates through the first 5 years of our relationship,” Glendon says. This was the result of several initiatives, including use of a dedicated fleet in some areas, better consolidation of LTL shipments and use of Transplace’s Collaborative Bid Module. “Of course, cost doesn’t really matter unless we are getting the service, and the service has been right at our target,” he says. “The technology Transplace has, in terms of their business intelligence reporting and exception reporting and their whole transportation management solution, helps maintain our high service levels.”
Areas of Savings Delivered
- Lane Rate Savings (contract rate negotiation)
- Annual sourcing event utilizing Transplace’s Collaborative Bidding Module
- Increased Intermodal usage
- Dedicated fleet utilization
- Truckload Consolidation
Additional Value
As Transplace has grown in the CPG industry, Glendon cites the opportunity to work with other customers such as Del Monte, Colgate-Palmolive, and Chicken of the Sea to explore potential collaborative opportunities, discuss common CPG challenges, and share industry expertise. Adds Glendon, “We’re utilizing the scale and their technology they bring to the table to help improve our costs as well as service.”
SunnyD’s relationship with Transplace continues to grow. Glendon utilizes Transplace’s market knowledge and shares that with others across the company. “I’ve been able to share results from our semi-annual reviews with our CEO and show our transportation costs over the last five years and the savings we’ve realized,” adds Glendon.
Glendon also commends Transplace for its use of carriers that participate in EPA’s SmartWay program. “As a company, SunnyD issues a sustainability report annually. It is great that we can report that we are SmartWay certified because of the carriers that Transplace is using on our accounts. This is important to us because we know those carriers are not only doing what is good for the environment, they are doing what is smart from a business standpoint and that saves us money.”
“We certainly feel that we made the right decision in outsourcing this part of our business, and that we chose the right partner. It’s a relationship that has continued to grow as our business has expanded and Transplace has more than met the challenge in providing new or different services and at the same time, working hard to reduce our costs,” concludes Glendon.