Increasing Flexibility

Details

Serving as a strategic arm of a Fortune 500 food customer’s supply chain, CJ Logistics worked with the customer to rapidly expand their network. In a two-month period, on time and on budget, CJ Logistics collaborated with the customer on identifying, setting up and staffing a new site, ensuring it was ready for first receipt and first ship.

Situation

CJ Logistics manages the North American distribution network for a Fortune 500 food customer, providing warehousing, transportation and supply chain packaging services. At the start of our partnership, we implemented a three-site network over a six-month period, transitioning the customer’s current distribution centers over to CJ Logistics warehouses. This was their first experience outsourcing their supply chain. During this time, our customer made a brand acquisition and needed to further expand their network, rapidly.

Solution

CJ Logistics and the customer collaboratively identified an optimal location based on projected volume and anticipated destination points. This location allowed us to shift product from their Southeast and Southwest sites to the new location to service the Midwest region and some of the Plains and Mountain states, thus reducing transportation costs, in-transit damage and order lead time.

To meet first receipt and ship requirements, we had two months to set up and staff the new location. To align costs with workload, we phased in staffing while building inventory. Quickly placing the facility manager and core customer service and inventory control teams, we then transferred approximately 25% of CJ Logistics’ existing workforce to the new site and conducted job fairs to recruit additional staff.

To maximize time for training, we used our nearby facility as a training ground for new hires prior to obtaining a certificate of occupancy for the building, leveraging experienced CJ Logistics operators from previous implementations for this customer to help onboard new staff and train them on leading practices.

Managing the complete set-up of the building included installing 70,000 square feet of racking, a cooler room and a cage for aerosols, and conducting systems and EDI testing. Installing the cage required working with the township for code compliant fencing and specialized fire protection. While this was in progress, we were also building inventory for 1.5 months prior to first ship.

Three to four weeks prior to start-up, we determined we could reduce costs by including a supply chain packaging operation in the new building rather than operating it at a different location in the network. This meant quickly re-designing the building layout with a packaging area, including corrugate storage, and hiring and training a packaging department with a lead manager and three additional forklift operators.

Result

First receipt and first ship were achieved on time and on budget. By shifting product from a location in Texas, we achieved a transportation savings of approximately $1.5 million. This implementation reinforced the strength of our partnership, further establishing CJ Logistics as a true strategic partner to this customer.