Selecting the Right Logistics Provider to Help Grow Your Business

The natural products business is expanding rapidly beyond niche markets, with larger conglomerates eagerly entering the industry. To manage growth and keep up with the competition, look toward your supply chain partners. The right carrier or logistics provider will help propel distribution and expand your bottom line, decreasing costs while enhancing service to retailers.

Starting Out, Sailing Ahead

The logistics needs of most smaller natural products manufacturers likely circle around frequent parcel shipments via FedEx and UPS, the occasional pallet to major retailers and delivering the tradeshow booth to the next big event. A smaller company size actually affords an advantage, as taking the time to map out the entire supply chain now means building a solid foundation from the start without making the mistakes that come with hasty growth.

Right now, carriers are the primary interface, so the most proactive step is to track and manage the quality of all carriers, creating a matrix of score cards if there are several being used. Develop relationships now and set up a comprehensive way to measure carrier performance. For scoring, rate delivery costs, on-times, customer service, ease of claims processing and overall shipment transaction. It can be as simple as creating a checkbox hand stamp or as sophisticated as entries in a tracking system. This will be especially useful when it becomes time to find a full-solution provider that offers a combination of warehousing and transportation. Evaluating past services is the perfect way to begin.

Finding Full Solution Providers

Many small and mid-sized companies leave the supply chain planning to the warehouse guy or the shipping person. This approach forces a company to react to spikes in demand instead of acting off business needs. Moreover, tethering revenue to consumer buying patterns leaves the bottom line vulnerable. Proper logistics planning involves executives across multiple departments including sales, planning, customer service, shipping and even accounting. Communicating a companys unique needs accurately to a full-solution provider can only be accomplished with cross-department integration. For example, the logistics manager might not know customer service is overwhelmed with creating shipping status reports. Providers that create automated reports or allow third-party portal access might alleviate financial or labor strains.

The next step is to evaluate current capabilities and measure them against anticipated growth and future needs. A company that is currently shipping parcel and full pallets needs to plan for a provider that can also handle the foray into mixed pallets, labeling, display building, pick and pack, etc. Examine future warehousing needs. Consider providers with experience handling food clients and those that are upfront with food-grade certification, including some states additional organic certifications. Specialty manufacturers, for example, one needing kosher certification, need to determine whether a given provider knows the concerns inherent in that type of business. Can the finished products be repackaged for seasonal sell or do they need additional upgraded parts? Finding a provider with expertise in building and staging assembly will reduce outsourcing costs. Value-added services, such as kitting, ticketing, assembly, display building, etc, also allow companies to work with multiple retailer-specific policies without missing a beat.

Enhancing Business

Retailer-driven consolidation programs, offered by companies such as CaseStack and DSC Logistics, can be the best way for mid- to large-size businesses to enhance an already-established supply chain. While other types of consolidation rely on timing and depend on outside orders, retailer-driven consolidation programs pool a group of manufacturers headed to the same retailer into a single purchase order. This maximizes each truckload because the logistics provider can deliver a full truckload headed to a single distribution center rather than shipping multiple LTLs (less-than-truckloads). Combining orders thereby reduces costs and delivery times. Retailer-driven consolidation, by design, is a sustainable consideration as well; it takes trucks off the road, lowers carbon emissions and eliminates the wasteful practice of shipping partially empty trucks.

Natural Life Pet Products, an all-natural pet food manufacturer, opted for a logistics infrastructure centered on the cost and sustainability benefits of participating in a consolidation program. Over the last year, the natural pet food market experienced a growth surge due to foreign recalls. As demand increased, Natural Life met that insistence by participating in CaseStacks consolidation program to Wal-Mart. The program is especially accommodating to smaller-load, higher-frequency order practices and easily expands to higher-loads from order to order. This order volume flexibility, coupled with the ability to ship smaller orders, helps their growing enterprises stay nimble.

Most savvy industry execs are dialed in to the sustainability movement sweeping across all manufacturing industries. There are many more options available, from packaging to pallets and warehousing to fuel. For example, CHEP, a pallet provider, offers pallets in polling programs to maximize the life of each pallet used, making them environmental by definition. Also consider presenting carriers with options to help them become a greener and more efficient service. These could include alternative fuel, smart idling policies, capped speed to maximize mpg (miles-per-gallon) and route optimization softwaresome are even integrated with alternative fuel station locators. Choosing sustainable solution providers that cut costs can maximize a companys revenue. Their new ideas should grow both businesses for long-term success.

Sum-Sum Chan is the director of marketing and communications at CaseStack, a sustainability-focused logistics company providing shipping and warehousing solutions. She oversees the to-market strategy and brand building of 3PL. Chan previously held the position of marketing director at Hint Mint, a gourmet confectionery company. CaseStack.com, [email protected] .