The slogan “Committed to healthy food, healthy people, and a healthy planet” on Stonyfield Farm's web site sums up the company's mission succinctly. Yet to honor this commitment — and continue its steady growth — the Londonderry NH-based producer of organic yogurt, smoothies, ice cream, milk, and cultured soy products needed some logistics help.
That help came in from Ryder System Inc.
A Ryder fleet customer since 1992 and a transportation management client since 2006, Stonyfield Farm currently leases two tractors and two temperature-controlled refrigerated trailers from Ryder. Miami FL-based Ryder also provides several transportation management services including:
All outbound shipping from Stonyfield Farm's Londonderry plant (refrigerated truckload (TL) and refrigerated less-than-truckload (LTL).
All co-packer inbound shipping.
Ice cream shipments.
Carrier procurement of multi-modal transportation, including rate and service negotiation and contract management.
Freight bill audit and pay (FBAP): auditing, processing and paying carrier freight bills.
Ryder serves Stonyfield Farm's co-packers, as well as some of its partners including Publix, Whole Foods Markets, Kroger, Stop & Shop, ShopRite, Sysco, and United Natural Foods.
Stonyfield Farm also depends on Ryder to lease reefers for national community marketing events, as well as rental vehicles for seasonal marketing events nationwide.
The New Hampshire firm's origins lay in an idea taking marketable form. In 1978, Samuel Kaymen perfected the recipe for what would become Stonyfield Farm Yogurt. “Green” before it became more universally accepted, he and wife Louise Kaymen established The Rural Education Center in Wilton NH. This non-profit organization focused on teaching rural and homesteading skills — with the accent on organic food production.
The center recruited “idea man” Gary Hirshberg as a board member to help develop a business strategy and create financial support. For seven years, the Kaymen and Hirshberg families lived in adjoining apartments in the farmhouse that proved to be the site of Stonyfield Farm's original yogurt works.
Operating from larger quarters
Hirshberg aided the center's trustees in coming up with alternate strategies. One of these ideas: expand the farm and turn yogurt production into a viable financial venture.
Thus Stonyfield Farm came into being in 1983.
The company obtained a $35,000 loan from the Institute for Community Economics, including $25,000 from the Sisters of Mercy as start-up money. Stonyfield Farm produced its first 50-gallon batch of yogurt April 9, 1983, and began making whole milk plain yogurt for sale. That first year, the two families and their seven Jersey cows managed to produce 150 cases of yogurt each week, and annual sales totaled $56,000.
With demand for the yogurt rising — and after a full night of milking cows by hand when a storm knocked out electricity — the families agreed in 1984 to sell their 19 cows and begin buying milk from local farmers.
About 25 years later, the yogurt producer now operates from a 166,000-square-foot facility in Londonderry, with about 350 employees. In 2006, sales revenue totaled about $260 million.
Organically oriented Stonyfield Farm uses quality ingredients (including organic milk, fruit, and sugar) from local suppliers whenever possible. The company just launched an organic energy drink called Shift, targeted to a new demographic and a calcium-rich yogurt, 2-a-Day, for its core women's market.
The firm's local fleet consists of three tractors, two trailers, and one straight truck. Affiliation with Ryder means that there are more than 150 common carrier combinations for outbound loads from Londonderry each week.
As Stonyfield Farm continues to prosper, it is confronting key transportation/logistics challenges. Ryan Boccelli, the company's director of logistics, outlined these:
Partnership yields advantages
Transportation costs continue to rise.
Refrigerated transportation accounts for less than 5% of total United States carrier volume. This forces Stonyfield Farm to be part of a seller's market.
Fuels costs are causing carriers not to be as aggressive on rates and surcharges.
New England is a consumption market, not an industrial market. This causes an increased demand for outbound shipments; however, as with co-packers, there is a short supply for inbound shipments.
Extensive training for technicians
Quality service versus lower cost. Carriers often underbid outbound lanes to get out of New England. This results in unreliable carriers, breakdowns, and no-shows.
TL versus LTL. Stonyfield Farm splits on these modes: 95% to 5% in favor of TL, and TL averages two stops per trip. Multi-stop loads are not preferred by carriers, since this keeps their equipment tied up.
The company ultimately decided to outsource some of its transportation functions. The justification for this? According to Boccelli, with continued growth, and transportation as one of the firm's largest expenditures, more time and effort had to be allocated toward processing and reporting of freight bills. After researching the right sourcing of Freight Bill Audit and Payment (FBAP), Stonyfield Farm discovered several issues had arisen:
A need to alleviate the labor constraint allocated to processing contracts, rates, account coding, and processing of freight bills.
Employee resource allocation for reporting transportation expenditures. Stonyfield Farm needed to increase the capability to report actual costs associated with transportation. The firm was never able to distinguish costs between linehaul, detention, layover, and stop-off fees. Due to its manual environment, it only managed to segregate linehaul, fuel, and lumper fees.
Lack of automated auditing capabilities to match freight bills against contracts for accessorial, mileage, and fuel surcharges.
Along with reporting mileage, using the datato accurately measure the greenhouse gas (GHG) effect from its transportation network — and how to improve it.
As a full-service lease customer, Stonyfield Farm was open to other areas of logistics outsourcing. The key was determining when the time was appropriate to implement newer systems to replace current systems — or what Ryder calls Value Proposition. Boccelli says that the company knew the time was right to turn its attention to transportation management services when labor output for certain tasks was greater than the value obtained.
By partnering with Ryder, some of the benefits Stonyfield Farm has realized include:
Full-service leasing, with full maintenance and shop services within four miles of the facility.
Discounted fuel and a seven-point preventive maintenance check at every fill-up, including tire pressure, which impacts fuel economy directly.
Continuous tractor-trailer turnover to always have reliable, safe equipment that meets the newest Environmental Protection Agency standards.
The ability to advertise on Stonyfield Farm vehicles.
Leveraging greater buying power in the refrigerated transportation market, all through using its incumbent carrier base in 80% of its lanes. Boccelli says this is crucial to maintaining carrier loyalty built over the past 24 years.
The carrier base is now proportionate. Previously more than 60% of Stonyfield Farm's business was with one carrier, and now volume has been spread among 11 carriers.
Technology also plays a leading role in managing Stonyfield Farm's transportation needs. More and more carriers have been turning to electronic data interchange (EDI) instead of paper. The New Hampshire-based yogurt maker has joined their numbers via implementation of FBAP and carrier management. In first quarter 2007, the firm received more than 2,000 freight invoices, of which 95% were submitted electronically. Just 100 invoices were sent as paper. So technology has supported the Stonyfield Farm mission of protecting the environment.
Ryder supplies proprietary information technology systems to process invoices by EDI. This permits Stonyfield Farm's smaller carriers to maintain market competitiveness without the overhead costs for IT infrastructure. A robust portal reports all invoiced data, items previously entered manually by the firm. As it grows, the yogurt company is also using Ryder's engineering support to develop network analysis to build multiple distribution center and fleet optimization opportunities.
Technicians who work for Ryder are extensively trained on refrigerated equipment. They receive two weeks of intensive training along with a one-week follow-up training course. Ryder's trailers are equipped with Thermo King SB-190 30 refrigeration units.
The leasing company's Manchester NH shop services the Stonyfield Farm account. Situated on a lot measuring more than four acres, this facility is equipped with 12 service bays, two fueling lanes, and one vehicle wash bay. The shop is open 24 hours Monday through Friday, 7:00 am to 3:30 pm Saturday, and on Sunday, when the shop is closed, a technician remains on call.
Ryder's breakdown reduction plan also benefits Stonyfield Farm. In it, a breakdown analysis occurs weekly to prevent problems from reoccurring. Ryder parts departments are expected to have 95% of all parts on hand; Min-Max barricading is set up to order parts automatically. The Ryder goal is less than 0.5 breakdowns per year.
Ryder and Stonyfield Farm's relationship transcends the transportation of product. Ryder's National Rental program was initiated with the yogurt producer in 2006 for the company's community marketing division, including an event in Hawaii. Trucks are used as a marketing tool, decaled for recognition.
As Stonyfield Farm assesses the need to expand its local fleet to enhance service and reduce costs, it is eyeing the ultimate goal of using alternative fuels to run this fleet. Its fruitful partnership with Ryder likely will continue, with the transportation and supply chain company a vehicle of innovation bound for new opportunities.