Transplace has been providing supply chain and logistics management services for leading beverage producer Sunny Delight Beverages Co since December 2004.
A producer of juice-based drinks for North America and Western Europe, Sunny Delight had very specific needs for shelf-stable and refrigerated product to be shipped across the nation, especially in light of its separation from its parent company. When creating a new supply chain infrastructure, Sunny Delight beverage company found its needs could be served well by Transplace's distinctive blend of 3PL resources and technology.
A new supply chain recipe
Though Sunny Delight was launched in Florida in 1965, the Sunny Delight Beverages Co was formed in 2004 from brands acquired from Procter & Gamble by J W Childs, a Boston MA-based private equity firm. Upon breaking away from P&G, Sunny Delight had annual sales in excess of $550 million, conducting business in eight nations across North America and Europe. The company has its United States headquarters in Cincinnati OH and its European headquarters in Barcelona, Spain; manufacturing facilities are located throughout the United States and Europe. The company produces and markets such brands as SunnyD Original, Intense Sport, and Baja. Upon its acquisition, Sunny Delight clearly had the products, staff, and brand recognition to stay successful in the marketplace, but lacked the infrastructure to support itself independently in certain areas.
At the time of sale, J W Childs charged Sunny Delight with developing a new technology and business infrastructure, which included its transportation and shipment systems. Executives at Sunny Delight viewed this as both an opportunity and a challenge. When considering a logistics and supply chain system, the beverage company faced the standard challenges of any company taking control of its transportation network for the first time, plus the opportunities that come with needing specialized refrigerated inbound and outbound cartage at its production facilities. The company chose to address its domestic needs immediately — Sunny Delight has four US plants and ships its entire product directly to customers.
A path of least resistance for Sunny Delight would have been to move forward with a logistics provider that strictly focuses on refrigerated logistics, but Sunny Delight had other ideas in mind. The company was looking for a company with a best-in-class technology platform that would take care of all its supply chain needs, not just the concept of refrigerated logistics.
Since Sunny Delight was now being challenged to build its supply chain from scratch, the company determined that rather than trying to move outside of its own core competency, it needed to pick a company that could provide shipment consolidation; load planning; carrier management; freight payment and auditing; cost and service reporting; carrier scheduling; a trailer pool; dock scheduling; management of its less-than-truckload shipments; automated routing guide; and engineering services. Through a rigorous RFP process, Sunny Delight chose Transplace. Sunny Delight did not have its own refrigerated carriers, so Transplace's first step was to perform a carrier bid to find enough capacity to handle an estimated 30,000 annual refrigerated loads.
“Executing the transportation procurement event by incorporating our standalone best-in-class transportation management technology and services, Transplace was able to develop the most efficient, cost-effective supply chain strategy consisting of all the elements and objectives that Sunny Delight was aiming to achieve,” said Tom Sanderson, president and chief executive officer of Transplace.
Transplace's Specialized Services Group based in Stuttgart AR has been a major value driver in the Sunny Delight/Transplace relationship. This division of Transplace, specializing in temperature-controlled transportation management, is a core transportation provider for Sunny Delight. The Transplace Carrier Bid Module (CBM) was used and a bid invitation was sent to refrigerated carriers. More than 80 percent of the carriers responded to the bid, and in a soft second round of negotiations were then personally contacted by the operations team to confirm capacity. Transplace created the routing guide, and Sunny Delight was able to select from strong and dependable carriers. Other services provided to Sunny Delight are shipment planning, shipment consolidation and routing, carrier management, carrier selection, carrier shipment tender, Internet shipment status, freight payment and audit, cargo claims management, coordination with client locations, operations staff at Transplace locations, and appointment scheduling.
Beginning in summer 2006, the Transplace operations team expanded their relationship with Sunny Delight by adding the management of Sunny Delight's inbound freight, which has enhanced the offering even further.
SunnyD savors substantial savings
Since the decision to move forward with Transplace and use the Stuttgart facility, SunnyD now enjoys savings of $160 per load by employing Transplace's dedicated truck scenario, which equates to an estimated savings of $65,000 annually. Sanderson said, “When Sunny Delight approached us with a unique opportunity to create a lasting partnership, we knew that our capabilities would align with all of SunnyD's qualifications, as well as providing customers with groundbreaking savings.”
In addition, Sunny Delight has the luxury that based on changing market and company dynamics, the company can adjust how much, or how little, managed services and technology solutions Transplace provides, which in the end will achieve the appropriate balance for a successful supply chain.
For Sunny Delight customers, the transition from P&G managed logistics operation to Transplace has gone virtually unnoticed. This is due to careful planning and Transplace's ability to rapidly create a logistics infrastructure from scratch, resulting in a true ‘delight’ for both Sunny Delight and its clientele.