The leading manufacturer of jams and jellies alters its distribution network and reaches out to a third-party logistics provider for the first time. Bruce True, manager of distribution planning, and Carl Neverman, vice president of client solutions with Weber Distribution, talk about how the two companies made it work.
Welch's is a farmer-owned co-op with sales of $850m a year and around 1,000 employees. According to True, the company decided to close a manufacturing distribution site that had served the entire West Coast out of Washington state. The plan was to move production into existing Welch's facilities in Michigan and Pennsylvania. But the company still needed a distribution point for servicing the western portion of the country.
Much of its business in that region was located in the Southwest, so that's where Welch's went looking for a third-party logistics provider that could handle warehousing and distribution. At the outset, it was determined to seek a partner instead of continuing to handle that aspect of the supply chain by itself.
Welch's began its search in Southern California, drawing up a list of a dozen companies and sending out requests for proposals to each. Based on their feedback, it narrowed the choices to three, then sent out cross-functional teams to visit each finalist. The delegations consisted of representatives from supply chain, quality, IT and customer service.
True says the manufacturer needed a partner that could support emerging technologies such as radio frequency identification and a greater reliance on advance shipping notices. In addition, Welch's customer base was demanding more in terms of specialized services, such as customized pallets.
Welch's choice was Weber Distribution, a 3PL with warehousing, transportation and information-technology capabilities, and a focus on food and beverage, retail, chemical and the paper industry. Neverman says the two companies had a prior relationship, with Weber having supported value-added club-store services for Welch's. "We were happy to participate further," he says.
Weber had its own cross-functional team that worked closely with Welch's to implement the new arrangement, says Neverman. Together they devised a series of time-lines, expectations and specific goals for the project.
In its first experience working with a 3PL, Welch's quickly learned the importance of deploying cross-functional teams on both sides. As a result, says True, "we were able to work through obstacles along the way." To address some of the inevitable "hiccups" that arise with any new implementation, the company dispatched members of its own staff, who were familiar with West Coast customers, to remain on site for two weeks. "That really smoothed things out," says True.
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