March 2003 | Case Studies | Reader Profile

Lewis Dibert: Spinning Red Into Gold

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Despite an affable disposition, Lewis Dibert spends his days seeing red. As director of logistics for Red Gold Inc., each day from July through October he moves hundreds of truckloads of tomatoes from fields in five states to be packed into cans at three Indiana production plants.

The rest of the year, he brings in 20 railcar loads of tomato paste each day, plus corn syrup and other ingredients for cooking up culinary staples such as ketchup, spaghetti sauce, and salsa. He also ships his company's finished products to distribution centers and customers throughout the United States.

When tomatoes are your business, what makes for a great day at work? "I find it fascinating solving problems and coming up with the big 'Ah-ha!'" Dibert says. That could mean finding a more economical transportation mode, implementing a new process, or satisfying a customer's special needs.

Early in life, Dibert's love of problem-solving fed not on red fruit but on electronic circuits, as he prepared for a career in engineering. But once launched in life, he soon gravitated toward supply chain problems.

He managed distribution facilities, organized intermodal transportation, and oversaw production and distribution of salt products for Akzo Nobel. He ran a regional operation, including plants, warehouses, and a distribution network for chemical manufacturer Ashland. In 2001, he came to Red Gold to solve a specific puzzle—how to make the leap from regional to national logistics operation.

Having purchased a major competitor, Red Gold saw its market—traditionally the Midwest—suddenly balloon to encompass the entire country. "The company's growth was double- digits at that point," Dibert explains. "My job was to figure out the best way to manage the overall business, taking it to the next step and going national."

In part, that meant losing the habit of relying entirely on trucks. To reach a national market, Red Gold first tried supplementing its private fleet with other over-the-road carriers.

"But only so many trucks are going to come through the Indianapolis area," Dibert observes. And for shipping to the West Coast, he says, "trucking becomes completely out of the question because of the cost."

Dibert started shifting loads bound for the East and West Coasts to rail. He found a bonanza in intermodal containers that carried goods from the Pacific Rim to major retailers' Midwestern distribution centers, often returning empty to West Coast seaports.

"Because of the density of our product, we were able to load these 40-foot containers and reposition them back to the West Coast at very economical rates," he says.

The biggest challenge was showing management, sales staff, and customers what it would take to make a successful transition, and how they stood to gain from the change. For customers who felt nervous about the extra transit time that rail transportation demands, Red Gold established regional facilities to hold safety stock. That way, for example, if a snow storm stalled shipments to the Northeast just as shoppers were rushing to stores to stock up on canned goods, store managers would have a supply of Red Gold products near at hand.

But the real key, Dibert says, "is being able to reach out from Indiana and ship directly to customers anywhere in the United States. If we can ship directly to customers via intermodal, boxcars, or truck, without having to go through an intermediate distribution center, we are able to be the low-cost provider."

The Big Questions

What are you reading?

Chicago magazine, various business magazines, and Popular Science.

What's in your briefcase right now?

What do you do when you're not at work?

I live in Chicago. My wife and I spend a lot of time downtown visiting museums and cultural activities and dining out. And I like to ride my motorcycle.

Favorite tomato-based dish?

Pasta with sauce and lots of garlic!

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