Technology September 13, 2019
technology | Transportation Management Systems
Outsourcing its transportation and logistics function is allowing snack manufacturer Lenny & Larry's to better manage growth and focus on its core competency: making cookies.
By Victoria Kickham
Snack manufacturer Lenny & Larry's faced a classic "good news, bad news" scenario just a few years ago. The good news was that demand was skyrocketing among the health and wellness set for its flagship protein-packed cookie, opening new markets for the product nationwide. The bad news was that the Southern California-based company was crumbling under the weight of transportation and logistics challenges as it worked to get cookie orders out the door faster than ever before.
That's when leaders at Lenny & Larry's turned to third-party logistics service provider (3PL) BlueGrace Logistics, which now manages all of the manufacturer's transportation planning and execution, allowing Lenny & Larry's to focus on product development and expansionall while reducing costs and enhancing on-time performance rates.
"BlueGrace [has] allowed Lenny & Larry's to focus on making the best protein cookies and improving internal operations while providing a consistent and stable platform for managing all outbound logistics," says Andrew Klucznik, sales and operations planning director for Lenny & Larry's. "[It has] also very effectively reduced logistics costs and pushed on-time performance to world-class levels."
One measure of success: Lenny & Larry's is now a nationwide distributor to Target, having been considered an "at-risk vendor" by the retail giant just a few years ago.
THE PROBLEM: LOW VISIBILITY, OUTDATED SYSTEMS
Bodybuilder and former American Gladiator competitor Benny "Cyclone" Turner founded Lenny & Larry's in 1993 with the goal of introducing a tasty, healthy protein-based snack to the health and wellness market. Over the next several years, the snack maker experienced what company leaders describe as "explosive growth" that left it bursting at the seams in 2013. During that period, Lenny & Larry's went from handling just a few shipments a day to local West Coast markets, to coordinating upward of 20 shipments a day for delivery nationwide.
Company leaders quickly realized that their distribution infrastructure wasn't up to snuff and that handling logistics processes manually was too much of a burden for the small but fast-growing business. The firm's on-time and must-arrive-by-date (MABD) performance rates were low, keeping it from meeting the stringent demands of many major retailers. Managing its logistics challenges was distracting the company from its main focus: making cookies.
THE SOLUTION: NEW SOFTWARE AND A PROCESS OVERHAUL
Riverview, Fla.-based BlueGrace entered the picture around 2016, first implementing its standalone transportation management platform, BlueShip, which provided Lenny & Larry's employees with a more streamlined system for booking shipments. The partnership grew from there, as BlueGrace uncovered deeper problems that were keeping the manufacturer from meeting some of its production and delivery goals. As BlueGrace Regional Vice President Christopher Kupillas explains, Lenny & Larry's needed to get a better handle on the data in its IT (information technology) system as a way to provide a fuller picture and more forward-looking view of orders and delivery requirements. That is to say, the firm needed to do more than just automate the shipping process in order to keep up with its growth.
"A lot of the things they did as a smaller business, moving two to three shipments a day, just wouldn't work anymore," Kupillas says. "When you start moving 20, 30, 40 shipments a day, you have to do some things to adjust to that."
BlueGrace took on a larger role by automating its client's entire logistics function. The 3PL started by eliminating cumbersome paperwork and introducing best practices and continuous-improvement processes for transportation and logistics. Its team of logistics experts drilled down to the on-time performance rates of specific customer locations and compared them with carrier-performance ratings to create an optimal carrier mix. They then developed new ship-date logic that matched the Lenny & Larry's production schedule, helping the firm reach on-time rates of more than 95 percent with big-box retailers and grocersan impressive jump from rates that hovered around 50 percent prior to working with BlueGrace, leaders from both companies say.
"Their support immediately alleviated the workload on our warehouse team, who could now focus on improving the order-fulfillment processes, accuracy of orders, and fill rates," Klucznik explains. "Aside from small parcels, which are still booked internally, BlueGrace manages the booking of all outbound transportation for our two distribution centersone on the West Coast and one on the East Coast. Once a week, we meet with BlueGrace to review the on-time performance to our customers as well as the cost performance of our distribution network."
THE OUTLOOK: MORE GROWTH AHEAD
Lenny & Larry's ships about a half-million pounds of product every week to more than 100 retailers and is more focused on growth than ever before, thanks to its new logistics partnership. Klucznik says BlueGrace acts as an extension of Lenny & Larry's, and that the two partners are working together to grow the business. Kupillas agrees, and says the opening of the company's East Coast distribution center in late 2018 perfectly illustrates the point.
BlueGrace was instrumental in the decision to open the East Coast facility, thanks to a cost-analysis study that grew out of its routine analysis of its client's data. More than a year ago, BlueGrace's logistics experts saw that the manufacturer was planning a new-product launch that would affect the weight, class, and mileage of its shipmentsultimately increasing shipping costsKupillas explains. That led the BlueGrace team to run some numbers to see whether adding an East Coast facility would mitigate the cost increases that were coming down the pike. Kupillas says the team found that a new facility would dramatically reduce costs for Lenny & Larry's on a cost-per-cookie basis; more importantly, it would help get the product to the customer faster, improving on-time delivery rates.
"Lenny & Larry's is a very future-focused company that is always looking on the horizon and focused on continuous improvement," he says, emphasizing the value to BlueGrace of knowing ahead of time how the new-product launch would affect shipping and logistics. Essentially, it allowed the two companies to develop a longer-term strategy for the snack maker's growth.
"If you can have those strategic conversations from a high level, as well as conversations at the tactical level ... it's the best possible scenario," Kupillas adds.
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