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More than 75 years ago, Ben Hirsch invented liquid auto polish in the family bathtub. For the company that would become Turtle Wax, it's a little more complicated today to manufacture the pastes and other products to make cars shiny. The Chicago-based company works with multiple contract manufacturers and markets more than 150 SKUs around the globe. That would be tough to do in between showers. That's why the company needs a reliable third-party logistics services provider, one with a comprehensive menu of logistics offerings.
Over the years, Turtle Wax has continued to produce innovative product lines to meet the ever-changing needs of both car consumers and the automotive industry. During that time, the family-owned company’s products have gained visibility, demand and share in the marketplace – servicing 70 countries – but the need to control costs and manage credibility and relationships had been negatively affected by a former 3PL. Simply stated, fill rates weren’t being met; products weren’t delivered on time; and customers weren’t getting the service they deserved. Turtle Wax needed a new partner. It found that in LeSaint Logistics.
Management realized the company required a partner with a solid structure and business model that would allow it to outsource its entire transportation package. The previous partner had not managed either the inbound or outbound legs of the business.
The company would tap LeSaint's ability in that arena. There were a number of components to that, according to Turtle Wax distribution analyst Jeff Steed, two of vital importance.
First, some of the raw materials and components of Turtle Wax products are governed by hazardous materials regulations. LeSaint's extensive experience working with chemical companies was invaluable since it could be counted on to comply with the appropriate government rules and regs.
“We've built that experience into what we offer,” says LeSaint vice president of operations Dan Harmon, “so we bring that to a relationship like this.”
Second, every manufacturer knows it has to comply with retailers' must-arrive-by-dates, especially when a customer constitutes a major account. But satisfying the demands of big-box retailers and other large customers is guaranteed, Harmon says. “We've set a benchmark that beats any requirements set by them. If you don't meet a must-arrive-by-date 90 percent of the time, that's when you get in hot water with some of them. But we meet those MABDs 95 percent of the time or better.”
LeSaint has its own dedicated fleet, and it relies on its transportation brokerage group as well. “It's just not an option for us to go below that 95 percent level.”
LeSaint monitors total performance, and has developed an extensive KPI Transportation Report – one solely for what euphemistically is referred to as “the world's largest retailer” – and one for all other customers.
With daily monitoring, LeSaint is responsive to issues and trends that arise, which ultimately controls cost, says Harmon.
LeSaint holds a detailed review of KPI/metrics with Turtle Wax each month.
LeSaint originally maintained more than 20 different KIP/metrics on the dashboard, which has changed through the years to align with Turtle Wax’s ever-changing business. Today, the focus is on 16 critical KPI/metrics, including dedicated fleet operation, transportation management, carrier claim dollars (open, inventory, and risk areas), chargebacks, and damages. Doing so has significantly improved efficiencies and reduced costs, Harmon says.
For example, effective reporting and measurement has allowed them to spot trends that have resulted in a reduction of chargebacks by 22 percent.
Through this monthly reporting, Turtle Wax now has baseline measurements with tools and metrics in place, which gives visibility into how it is being measured by its customers. It also provides visibility into trends, and Turtle Wax ultimately is able to see the strengths that management wants to maintain, as well as weaknesses and challenges that need improvement.
As important as it is, transportation isn't all that was missing in the previous relationship, in Steed's view. “They didn't have the type of inventory control system that we needed,” he says. That meant that time-consuming and costly audits needed to be undertaken. LeSaint utilizes an account-back system that's operative every time a worker pulls a product or order, and informs them what should be left in inventory. “This eliminates the physical inventory audits periodically.”
He says, “That's huge. Obviously, like ever other company, we operate off of credit. So, we have banks who send people in and want to see that our inventory is accurate. We send audits over to LeSaint all the time, and the fact that we can consistently say our inventory is 99.9 percent accurate is hugely beneficial.” In fact, since the partnership got under way, he says, “I don't think we've ever had an issue with inventory.”
The relationship first began in 2009, and as Turtle Wax's business has grown, its distribution center footprint has shrunk. Harmon says the company utilized 180,000 square feet at the outset of the partnership. By optimizing inventory, the footprint began to drop; today, it stands at 129,000 square feet. The space is co-tenanted, and LeSaint has sold into the available space.
“You might ask, 'Haven't you managed yourself down 50,000 square feet of revenue?', but that's not the way to look at it,” says Harmon. “We managed their inventory and became more accurate. That enabled them to keep less safety stock. We reduced that footprint because it was right for Turtle Wax.”
Value-added service is one of the things taking place in the DC, says Steed. LeSaint takes care of any customers demanding special packaging or special projects.
The relationship between the two is one of continuous improvement, and that's important. “We talk ever single day. We work on projects together, and they help us find solutions.”
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