Food and Beverage

Challenge:

This OHL customer purchased a meal replacement and nutritional supplement product line and signed a long term contract to produce these products. This product line requires a quality assurance hold period of 72 to 96 hours after production to ensure there is no contamination. A limited volume history forced this company to establish an initial retail channel strategy based on assumptions. OHL also discovered that they had additional need to ship to multiple channels that needed to be incorporated into their strategy.

Approach:

OHL located a 217,000 sq ft facility to meet this customer’s current and future forecasted volumes and integrated OHL’s Warehouse Management System (WMS) to the existing system. OHL provides transportation management and provides shipment consolidation for this customer. Once the retail hub for this customer was established OHL began a data and scope gathering for their other business units. OHL was able to utilize the data and designed an 800,000 sq ft multi-channel distribution center to support this customer’s requirements. The facility was operational in 180 days from design.

Value:

OHL created a labor and equipment sharing environment that lowered the customer’s operating cost. An extensive analysis of shipment patterns was conducted. OHL implemented the Oracle® Transportation Management System (TMS) for the company and provides TL, LTL and parcel service to this customer. OHL also provides value added services for this company to meet retailers’ requirements. OHL expanded TMS services to their other product lines.

Return on Investment:

OHL was able to demonstrate significant cost savings and flexibility. The 217,000 sq ft requirement actually increased to 300,000 sq ft during initial manufacturing runs. OHL flexed the space up to meet the demand and after 3 months reduced back to the original 217,000 sq ft. By optimizing and consolidating outbound shipments, OHL has reduced this customer’s transportation costs 12.2% from original budget forecasts.

Challenge:

In 1999, this globally recognized U.S. brewing company realized it was spending too much money on loading direct and required greater support on special projects and promotional campaigns. The company also wanted to enhanced its security to protect its tightly controlled product and a flexible staffing solution. This company turned to OHL and we provided them with savings on direct loading and their desired value added services.

Approach:

In the brewing market, time to market greatly impacts product quality. OHL addressed this challenge by offering a strategically placed distribution center. The relationship continued with a packaging solution for a unique assortment of products for a promotion. The distribution center consolidated the various components into promotional packaging, palletizing the product and distributing it to retailers.

Value:

Value added services for special projects and promotional campaigns can make the business cycle look seasonal with peaks and valleys in resource and space demands. Since OHL can flex in space and people, this customer saw no interruption in service levels and ultimately realized savings in return.

Over the years the relationship has grown and OHL now operates over 185,000 sq ft of value added distribution center space for this beverage company.

Return on Investment:

Our customers’ business values become our values. We recognize the impact of cost savings measures for both our customers and their clients and focus on continuous process improvement. With this priority, we manage our KPIs, goal setting and performance management.

For this beverage company, the percentage of their direct load shipments increased from 58% to 75% with a cost savings in labor and transportation due to a reduction in freight handling claims. In addition, 97.9% of packages shipped from our facility are 18 days or fresher, compared to an industry average of 92.9%. This translates into increased customer satisfaction and overall savings for this customer and their clients.