____A leading candy manufacturer (CM) based in Mexico began exporting their products during the late 1980s to the US and very quickly became a product well recognized and demanded by the Hispanic population. Right after Source Logistics opened its doors in Los Angeles, CA, this CM recognized the potential opportunity to work with a company that understood its needs. Source Logistics helped the CM quickly expand their product distribution throughout the US. As a result of their success, this rapid growth caught the eye of a multinational company, which ultimately expressed interest in acquiring CM.
FACTS & CHALLENGES
____In order to grow in California, CM needed to develop a program to fulfill smaller orders and expand its supply to a larger number of distributors and wholesalers. They decided to go with the first option, and after 12 months of operations they lost a great amount of sales, market share and customer satisfaction. They had to make decisions and determine how to operate in a more cost effective manner, in order to be able to service all customers no matter what their size and conditions were. This meant they needed to have visibility and traceability of their products in the supply chain, including possible recalls.
Once CM was purchased by the Multinational Company, there was no understanding of the Hispanic business distribution and it was time for the Multinational Company to decide whether the product was to be moved to the Multinational Company’s DCs, or to modify their sales strategies for delivering larger orders to a smaller number of distributors. They decided to go with the second option and after 12 months of operations they lost a great amount of sales, market share and customer satisfaction. They were also affected by higher costs of operation from their own DC’s.
___The multinational company approached Source Logistics, and received a fully developed logistics solution to service the Hispanic and Anglo Market throughout the US by utilizing Source’s strategic locations and technology. This allowed the multinational company to lower their cost, improve service and gain market participation.
Source Logistics developed a custom made order fulfillment program and combined it with three days a week order delivery, which helped CM expand their customer distribution from 4 customers to 450 smaller Distributors and Wholesalers in the West Coast. Source Logistics accomplished all of this within 8 weeks.
Source Logistics prepared all documentation and worked alongside the CM and the Multinational Company’s team, to put the proper Supply Chain management into place in order to achieve an accuracy of 99.6% on all inventories and orders.
KPI’s specific to CM were created in order to measure every variable that could be improved in the Supply Chain. This helped better monitor their services and cost saving opportunities.
___CM has been able to not only recover lost customers, they have sustained a constant and accelerated growth in current and new markets as well. At the same time, they have been able to control their logistics costs by having a scalable logistics and distribution platform. This is all thanks to Source Logistics’ infrastructure and technology.