Washing Away The Late-delivery Fees

High Ridge Brands started buying up health and beauty brands in 2010 when it acquired Zest soap. It gradually added several familiar shampoo and soap brands, such as VO5, Coast, and Thicker Fuller Hair. Next it bought the rights to Brut, Sure, and Pert. And today, the Westport, Connecticut-based company has become one of the largest independent branded personal care companies in North America.

But as the company’s scope and scale grew, so did its challenges. For one, High Ridge Brands was increasingly being hit with noncompliance charges for failing to meet its retailer customers’ demands for on time/in full (OTIF) shipments, incurring late fees and chargebacks from chains like Walmart and Target. 

ONE 3PL TO BIND THEM ALL …

In search of a solution, High Ridge Brands turned to its longtime warehousing and fulfillment service provider, ODW Logistics. The two companies had been partners since 2012, with ODW handling product storage and order fulfillment, while other third-party logistics service providers (3PLs) handled transportation. But in 2020, High Ridge Brands asked ODW to manage transportation as well—specifically, to manage communications between its multiple 3PLs in a bid to cut costs and forge a more holistic supply chain process, all with a goal of reducing fines and penalties.

By conducting a deep-dive audit of High Ridge Brands’ supply chain challenges, ODW Logistics discovered a couple of key things: First, it learned that LTL shipments were not being fully optimized to maximize savings. Second, it found there was an opportunity to build strategic truckload schedules to better meet retailers’ “vendor compliance” measures.

Using the information obtained during the audit, ODW implemented a routine to establish continuous improvements and conduct weekly team reviews. This resulted in ODW reducing High Ridge Brands’ Walmart fines by 40%. Better still, High Ridge Brands saw a 20% reduction in total supply chain costs once warehousing and transportation were bundled. 

BUILDING BETTER LOADS

Many of those gains came from a freight consolidation program ODW established to group less-than-truckload (LTL) shipments from multiple clients—not just High Ridge Brands—into less-costly full truckload (FTL) shipments, according to John Weber, vice president of sales at ODW. 

That might sound like a fairly routine practice, but the consolidation process in this case was complicated by the nature of High Ridge Brands’ merchandise, Weber explains. “[Their] freight is pretty dense and heavy, like bars of soap. So you need to [combine it with lighter freight from other shippers]; otherwise, you’ll weigh out the trailer before it cubes out. So we try to get that mix of heavy pallets and light pallets, and figure out which clients should ship together.”

To find that balance, ODW now feeds shipment data via electronic data interchange (EDI) to its warehouse management system (WMS), which in turns transmits the information to the transportation management system (TMS). That streamlined workflow wasn’t possible back when High Ridge Brands’ 3PL contracts were split between separate warehouse and transportation service providers, says Josh Freson, general manager–account management at ODW. “You can [only] do that when you have one company organizing inbound, outbound, and customer pickups, so you know what to prioritize,” he explains.

Over time, ODW has been able to shift its client’s freight balance so that 60% of High Ridge Brands’ outbound shipments now move in full truckloads—a significant jump from the 40% at the time ODW took over, Weber says. 

As for the results, ODW leaders report that the consolidation program not only trimmed costs but has also reduced loss and damage because fewer “touches” are involved. Under the old system, truckers “were always stopping at different terminals and taking freight off,” Freson explains. “But when you have stops and touches, you can lose a pallet or a case or two, so then you have ‘short’ issues.” Shifting more of the freight from LTL to truckload has helped cut down on those “short issues,” leaders from both companies say, and, better yet, has helped minimize the resulting fines.

 

Source: DC Velocity | https://www.dcvelocity.com/articles/59147-washing-away-the-late-delivery-fees