Don’t Even Think About Outsourcing Until You Read These Success Stories

From Fortune 50 organizations to startup operations, a growing number of companies are outsourcing components of their logistics and supply chain functions to third-party logistics providers.

Take the New England operation of Greenleaf Automotive Recyclers, a distributor of recycled auto parts. Last year the company decided to outsource its local customer deliveries to improve operations and reduce customer “re-deliveries” of products that were rejected due to damage or were not delivered. Greenleaf ultimately selected Cardinal Logistics Management, Concord, N.C., as its third-party logistics provider.

“When we first contacted a 3PL firm, we were looking primarily at how and where we could improve on our local deliveries,” recalls Philip Montalto, general manager of Greenleaf’s New England operation. “We found that not only could we make our routing and scheduling more efficient, we could also use Cardinal’s technology to help us manage our product loads more effectively, resulting in less damage during transit.”

Working with Cardinal, Greenleaf-New England has reduced re-deliveries from 15 percent to less than three percent, and reduced credits for damage in transit by more than 70 percent.

Another example is Kids’ Headquarters, a large importer of children’s apparel headquartered in New York, which last year tapped Weber Distribution, Santa Fe Springs, Calif., to handle its West Coast distribution and warehousing needs.

The 3PL picks up Kids’ Headquarters containers at the ports of Los Angeles and Long Beach, draying them to Weber’s paperless warehouse in Norwalk, Calif. There, the products are prepared for direct distribution to more than 1,500 retailers.

Transitioning to a paperless warehousing environment and leveraging Weber’s advanced warehouse management system has enabled Kids’ Headquarters to improve visibility and take four days out of its supply chain, increasing inventory turns and improving cash flow substantially.

Strength in Outsourcing

Hercules Incorporated, a $1.7-billion global chemical manufacturer and marketer of chemical specialties, changed its approach to logistics outsourcing last year after performing an in-depth analysis to determine business improvement opportunities.

Transportation and logistics, identified as top candidates for improvement, were seen as non-core operations with costs then accounting for about five percent of the company’s total revenues.

Hercules had previously worked with a variety of third-party logistics providers that focused on one or two transportation modes. To get a holistic view of its multi-million-dollar transportation expenditure and reduce costs, Hercules decided to outsource its entire transportation function to a single provider, ultimately selecting Odyssey Logistics & Technology, Danbury, Conn.

Odyssey serves as lead logistics provider in all transportation modes; redesign Hercules’ logistics network; process shipments; audit and pay freight invoices; and ensure that all aspects of the product delivery to customers are executed cost effectively. Companies that work with a 3PL can reap great benefits, but there’s no guarantee that an outsourcing effort will be successful.

“Missed deliveries, unfilled orders, customers who are screaming, and technology that doesn’t work are all potential consequences that you risk if you don’t pick the right 3PL,” warns Julie Baylin, president of Harkness Wilder LLC, Evanston, Ill.

What NOT to do When Outsourcing

You can avoid contributing to a shaky foundation for your outsourced relationship, according to Julie Baylin, president of Harkness Wilder LLC, and Clifford F. Lynch, principal, C.F. Lynch & Associates, Memphis, Tenn. Lynch is author of Logistics Outsourcing: A Management Guide. Here’s how.

DON’T consider outsourcing itself as the strategy. “Outsourcing is a tactic to achieve your logistics strategy,” Lynch explains. “It’s not the strategy itself. If you consider outsourcing as a strategy, you haven’t looked at the total picture.”

The first step is to make sure your logistics strategy is aligned with your corporate strategy. Then, Lynch advises, go through a rigorous make-or-buy evaluation process before making the decision to outsource.

DON’T outsource what you don’t understand. “One of the biggest reasons for failure is that the outsourcing company doesn’t totally understand what they’re outsourcing,” Baylin observes.

“Many companies try to outsource problems,” notes Lynch. And he should know: Lynch has both used and worked with third-party logistics providers and testified as expert witness at several court or arbitration hearings between 3PLs and their clients.

“If users don’t know the solution to the problem themselves, it’s unrealistic for them to expect the provider to find a solution in the short term,” he says, warning that a relationship built on such a shaky foundation “is doomed to failure.”

Lynch advises companies to first go through a rigorous self-study and establish a benchmark against which the 3PL’s performance can be measured. “If you don’t do this, you’ll start the relationship off wrong,” he says.

DON’T make the outsourcing decision in a vacuum. In some cases, the top logistics or operations executives making the outsourcing decision don’t include lower-level managers in the decision-making process. “Those people who are closest to the operation may have some requirements that are critical to consider when evaluating a 3PL,” Baylin says. They may also have a different perspective on what to look for in a 3PL.

“Executive-level people are furthest from the action; they can’t make the outsourcing decision in a vacuum,” she says. She urges companies that outsource to have a single outsourcing vision throughout the company “that everybody buys into and has input into forming.”

DON’T neglect to document your requirements. “Whether or not you issue a formal RFP—even if you think you know the 3PL you want to work with—document your requirements,” Baylin advises. “The exercise not only gives you an opportunity to spot glitches in the system, it also forces you to take a comprehensive look at your operation.”

Documenting your requirements enables you to give potential providers the greatest amount of insight into your operation. “The more information you provide the 3PL about what it takes to make the operation work, the more successfully the 3PL can respond to your needs,” Baylin notes.

While most companies won’t knowingly provide a 3PL with bad data, they may provide information that is incomplete or inaccurate because that’s the best data they have. In addition, critical sources of information—such as operations personnel out in the field—may not be asked to provide data, as they’re left out of the outsourcing process.

As a result, it’s not uncommon for the provider to discover that the job it bids on is not the work it winds up doing. The gap can be significant. That’s why Lynch advises agreeing to a clause in the contract that allows the partners to reopen rate negotiations if, after six months of working together, the account profile is off by 150 percent or more.

DON’T skimp on the selection process. Some users rush into outsourcing, and don’t invest the necessary time for evaluation and selection.

“Evaluating 3PLs is a very time-consuming project,” Baylin warns. That’s why many consultants suggest narrowing an initial long list of perhaps eight to 10 providers down to a short list of three to five providers, at which you take a really hard look.

“You need to evaluate their responses, go on site visits, and talk to the people who manage those facilities,” she advises. Check out the daily operations. For example, if you’re considering a warehousing provider, “watch the facility fill orders. Observe the process, see how the orders get out the door, and look at the technology they use.”

Check references carefully. In addition to talking with clients the 3PL gives you, see if you can identify and talk with other clients, too, so that you can get a true picture of the provider’s performance. “It’s understandable and expected that there have been some problems,” Baylin notes. “What’s important is how the problems were handled, and whether they were resolved.”

If technology is to be a key part of the relationship, “do a conference room pilot,” she advises. “Not every system will give you what you want,” so check it out carefully.

DON’T overlook lesser-known providers. “There are a lot of lesser-known, very strong third parties that are all about serving their customers well,” Baylin points out. But they may get overlooked by companies that consider only the best-known providers.

“Just because you haven’t heard of a provider doesn’t mean it can’t supply you with very good service,” she says, advising that you do some networking with people whose opinion you trust to identify competent but lesser-known alternatives to the household names.

DON’T expect the moon and the stars. While 3PLs can improve your logistics and supply chain capability and performance, they generally don’t perform magic. Yet users, particularly those new to the outsourcing process, may have unrealistic expectations that are difficult to achieve.

“One of the biggest mistakes that users make is believing that outsourcing to a third party is always going to save them money,” says Julie Baylin. “For some companies with logistics costs that are higher than reasonable, the 3PL can come in and reduce operating costs.

But for companies with solid logistics operations, a 3PL can provide better logistics competencies” but may not necessarily achieve savings such as a cents-per-case reduction, she says.

To avoid getting off on the wrong foot, make sure that you’re realistic in your expectations regarding savings—and service.

“Companies that outsource often expect more of their providers than they would expect of themselves,” Lynch observes. He advises companies “to have long, hard discussions in advance of the deal” to ensure that the provider understands—and can meet—your true expectations.

Press the provider to be equally realistic and open. “Providers are often so anxious to get a deal that they’ll price it not on what it will actually cost to do the work, but so that they can beat their competitors’ prices,” Lynch says. “Then they have to go back and increase costs in six months.”

DON’T expect problems not to occur. Even in the most successful relationship, difficulties are bound to crop up. Anticipating the types of issues that may occur can enable you to talk through potential solutions before you need them. That’s why Lynch suggests discussing potential friction points when you first set up the relationship with your 3PL.

“Ask questions such as, ‘What if the account profile turns out to be different than we expect it to be?’ ‘What if a merger or acquisition occurs?’ ‘What if you’re not happy with the manager assigned to the account, or bad chemistry develops between the two partners?'” he advises.

In addition, include a termination or orderly exit strategy,” Lynch suggests. While many contracts are written as if the relationship will last forever, “most don’t—they eventually go away. That’s why you need to have an orderly, congenial way to end the relationship written into the contract,” he says.

DON’T overlook the importance of the relationship. Despite all the sophisticated systems that are an integral part of logistics today, “outsourcing is still a personal relationship,” Cliff Lynch observes. “We’ve gotten so hung up on e-mails that no one talks to anyone in person anymore.”

Forming and nurturing a solid relationship provides a strong foundation that can help you get through the rough spots with your logistics partner. Lynch advises that both parties—user and provider alike—take the time to travel to their partner’s location on a regular basis to keep the relationship healthy.

TruServ Nails New Outsourcing Approach

Chicago-based hardware cooperative TruServ Corporation has been working hard to streamline its supply chain and improve operations. The company provides marketing, procurement, and logistics services nationwide to a network of 6,000 independent retail outlets and rental service companies. TruServ operates 12 distribution centers and a private fleet of more than 400 power units.

As part of its improvement process, TruServ three years ago started looking at a new model for handling transportation. “We were using a legacy system that worked well, but was very reactionary,” says John Strauss, director of inbound logistics for the company.

“We were looking for an opportunity to move ahead to a more proactive and systematic approach, and to integrate all our locations using the same procedures,” Strauss explains.

At the same time, TruServ wanted to convert from an operation where vendors routed more than 80 percent of freight prepaid to taking a more active role in inbound transportation management. This move was seen as a strategic initiative that was of great importance to TruServ.

“We were undergoing some drastic changes and realized that, if we wanted to get to the next level of performance, we couldn’t continue to do what we were currently doing,” Strauss says.

To make the change, TruServ decided to partner with a 3PL with demonstrated success. A cross-functional team was named, headed by John Strauss. It included senior representatives from merchandising, logistics, transportation, and buying, with input from finance.

The company’s previous experience with logistics outsourcing had been limited to drivers and transportation equipment, so the team invested roughly a year in planning and preparing for the change.

“We had great support from the top; this has been a strategic initiative,” Strauss says. Top management, including senior vice presidents of logistics and merchandising, have been fully engaged and supportive of the change.

Not A Guinea Pig

“We had several different vendors in mind,” Strauss recalls, most notably companies with proven retail experience. “We didn’t want to be a guinea pig. We were looking for someone that had already blazed the trail.”

The team sent a Request for Proposal to about one dozen vendors. While a few declined to participate, eight potential third-party providers made presentations to TruServ. After narrowing the list down to three semi-finalists, the team conducted on-site visits and talked with current customers.

After completing a thorough due diligence process, in October 2001 the team selected Transplace Inc., a provider of logistics and transportation management services headquartered in Plano, Texas, in part because of Transplace’s proven model and methodology.

Just a few months later, TruServ began its transition from a reactive, freight-prepaid environment to one that is preplanned, with Transplace providing collaborative transportation planning and execution services in support. TruServ looked to Transplace to spearhead the implementation. The 3PL used a methodology called LADDERS, an acronym for Launch, Analyze, Design, Develop, Evaluate, Rollout, and Support. Tammy Rice served as Transplace’s dedicated implementation manager.

At a kickoff meeting between TruServ and Transplace, the partners clarified roles, responsibilities, and expectations.

In addition, notes Chad Palmer, vice president of integration for Transplace, the companies discussed a scope change process, agreeing that anything that came up during the implementation that would change the relationship between TruServ and Transplace would be documented, outlining the impact on cost, personnel, and timing. This process laid the groundwork for dealing with the types of changes that inevitably occur during a new relationship of this magnitude.

From As-Is to To-Be

The next step was for Tammy Rice to document the existing, or as-is, process and plan for the transition to the to-be process. In addition, TruServ interviewed Transplace’s candidate for its account manager, Andy Trout, who would be situated in TruServ’s headquarters in Chicago. Trout came onboard in January of last year, working next to John Strauss.

“That was by design,” Strauss says. “Given the size and complexity of the change, we wanted that ongoing dialogue.”

Now in the second year of the relationship with Transplace, TruServ has nearly 600 vendors using the new collaborative process, and is seeing a definite improvement in cycle time and carrier performance. “We’re seeing improved vendor performance metrics, and a big improvement in our private fleet’s productivity,” Strauss says.

TruServ’s experience with logistics outsourcing has been very successful. The relationship is so seamless that Strauss thinks of Transplace as TruServ’s logistics team.

“We don’t like to refer to the operation as Transplace, because that connotes a ‘we and them’ environment,” he says.

It’s all part of his commitment to treating the third-party provider as an integral part of TruServ’s operation.

BriteVision Has 3PL Success Up its Sleeves

BriteVision Media produces and distributes coffee sleeves—cardboard insulators slipped around cups of hot beverages to make them more comfortable to handle. BriteVision has added a unique twist to the sleeves, turning them into a targeted marketing vehicle that is distributed to the company’s cafe network of 4,000-plus upscale coffeehouses around the world. The sleeves have been used to advertise a range of products and services, from gum to cars.

BriteVision is growing fast, printing and shipping more than 20 million coffee sleeves one month this spring. “We go where the population is,” notes Luke Zaientz, vice president of operations for the San Francisco-based company. “We started in New York, San Francisco, Los Angeles and Chicago, and are now in smaller markets.”

BriteVision runs monthly campaigns for its advertising customers, so “there’s a tremendous burst of production during the second and third weeks of the month,” says Zaientz, and product moves at the end and beginning of each month.

When BriteVision first started operations, handling its product was no problem. “Our product fits in a 23-pound box, and ships easily via parcel carrier,” Zaientz says. “If we didn’t care about cost, we could run the whole country from a single warehouse.”

But shipping the sleeves, which are printed in California, across the country became costly, and volumes increased sharply. So BriteVision began looking for warehouse space in Chicago. “We found New Age Transportation, and put some of our product in its Chicago-area facility,” Zaientz says.

While the relationship with New Age started out in a limited way, it has steadily expanded. “Over time, we’ve developed a more significant relationship. New Age today is our transportation department; we rely on them for shipping to Chicago,” Zaientz notes. New Age also coordinates the company’s eastbound multi-stop truckloads, manages inventory for the Chicago warehouse, and handles returns.

“New Age offers a lot of services that have saved us a tremendous amount of time,” Zaientz says, and that’s crucial for a busy company with fewer than 20 employees. “We have so many priorities other than logistics to manage,” he notes.

“In our frenetic environment, there has to be absolute clarity of mission and data,” Zaientz says. “Everybody has to be on the same page.”

To make the process work more smoothly, Zaientz creates a monthly master shipment plan, which enables New Age to plan more effectively—especially crucial when arranging transportation capacity during harvest time in California.

In addition, he says, “we try to provide New Age with a three- to four-day forecast of what types of trucks they will need, which has helped manage scarce capacity problems.”

Part of the success of the relationship between BriteVision and New Age is that it has evolved over time. Chances are good the relationship will continue to grow, especially because BriteVision is on track to double its revenues this year.

Goodyear Shifts Outsourcing From Tactical to Strategic

The Goodyear Tire & Rubber Company, Akron, Ohio, is integrating its supply chain from order to cash, reports Patrick Hurley, the tire company’s vice president-supply chain. Hurley, who stepped into his position when it was created earlier this year, has been charged with bringing together functional organizations such as planning, the call centers, order management, pricing administration, distribution and delivery, and the billing and accounts receivable process.

To help drive the change in its North American Tires division, Goodyear recently entered into a formal Supply Chain Management partnership with Exel, which serves as Goodyear’s lead logistics provider. The partnership is a new model for Goodyear, which had previously used third-party logistics providers (including Exel) largely to operate its distribution centers and perform other functional duties.

“Exel operates many of our DCs, and our load planning center,” Hurley says. “Now it operates as our high-level strategist in this supply chain management organization.”

The transition to a strategic outsourcing relationship began in 2002, when North American Tire, a $7-billion Goodyear unit, was charged with using its supply chain to create a strategic competitive advantage. Goodyear recognized that it would have to engage its 3PLs, who “had the competence and skill sets around supply chain management,” in order to achieve its goals, says Hurley.

John Loulan, then Goodyear’s vice president of manufacturing and supply chain, began evaluating what third-party providers could do beyond the traditional roles of warehousing and transportation.

After talking with its existing third-party providers and a handful of other 3PLs, Goodyear narrowed the list of potential strategic partners to two. The two providers demonstrated their capabilities to Goodyear, hosting the evaluation team at several sites, then completed a second round of presentations in May 2002. One month later, Goodyear selected Exel as its SCM partner/lead logistics provider.

The next several months were invested in establishing the relationship. Goodyear and Exel formed a high-level steering team that meets quarterly. It includes five Goodyear executives, including North American Tire’s global vice president for logistics, and vice presidents of finance, marketing, supply chain, and manufacturing. It also includes Exel’s Americas CEO, the president of Exel’s Automotive Americas sector, and that unit’s vice president of operations, Franklin Littleton.

“We had two meetings with the steering team to establish a direction and to negotiate the contract,” Littleton says. “We made a list of items we each wanted to see in the contract, identified potential problems, and discussed how we would divorce if the relationship didn’t work out.” The companies combed through the lists, establishing priorities, and agreeing how the relationship would work.

A major topic of discussion was how the partners would share risk and rewards. The result was a formal gainsharing program designed to be fair to both partners and to motivate all parties to drive cost out of the supply chain. “We’ve had unsuccessful gainsharing agreements in the past with other vendors,” Hurley says. “But this one was done right.”

Hammering out the gainsharing agreement early in the negotiation process was key to success. “By being brutally honest about our motivations and fears, we came up with a very fair system,” says Littleton.

Exel began assembling a new supply chain management group to supplement the existing operations group, which operates warehouses and dedicated fleets for Goodyear. The Akron-based supply chain management group, which consists of a supply chain consulting group and a transportation group, is headed by Mike Clark, senior director of operations of Exel’s Automotive sector. The team focuses on improving logistics operations and driving costs out of transportation and warehousing.

Goodyear also broadened its concept of the supply chain. “We now have a full focus across the entire order management process,” Hurley says. As a result, Exel is being asked to move beyond tactical operations and transportation issues and assume a more strategic role.

“The original focus of the relationship was for Exel to be the lead logistics provider, specifically in operations and transportation. Now I want them to be a strategic partner, to start looking at things more broadly—from order to cash,” Hurley says.

Changing the relationship required changing the way the partners worked together. Soon after moving into the new vice president-supply chain position, Hurley worked with Exel to reprioritize its projects, shifting the 3PL away from tactical items to more strategic ones involving inventory deployment, order management, and redesigning Goodyear’s distribution network. The core supply chain management team, which works with DC managers from Exel as well as Goodyear’s other third-party providers, performs the strategic work.

The makeup of the core team has evolved to respond to its broader mission. “Originally, we had strong transportation and warehouse management people. We added an analyst, and are changing others,” says Mike Clark, “bringing in individuals with more order management and consulting experience to handle the additional responsibilities.”

In addition, Exel has tapped resources throughout the company where needed to supplement its core Goodyear team.

The SCM team “is tasked with looking out for Goodyear’s best interests,” Clark says. “We’re focused on improving the supply chain. In some cases, that may be at the expense of an Exel operation.” It’s in the Exel SCM group’s best interests to do so, Clark says. “If Exel receives new operational revenue without going through a bidding process, our gainsharing component is reduced.”

The changes Goodyear and Exel have achieved are just the beginning, Hurley says. “I intend to expand the relationship we have with 3PLs strategically. Goodyear’s core competence is not logistics—but we do need to make the supply chain a competitive advantage. The only way we’ll do that is by partnering with world-class companies to get the job done.”

When Hurley says “partner,” he means it, says Clark. “We are extremely close to Goodyear,” with the two groups eating lunch together and Clark attending Goodyear organizational meetings.

The partners share core values and complementary cultures, enjoying mutual respect, trust, and commitment at all levels. “If you don’t have strong relationships among all management levels, you will not be successful,” Hurley says.

Lander Crafts a Supply Chain Beauty

Lander Co. Inc., Englewood, N.J., manufactures health and beauty care products under its own brand, store brands, and private label brands. With customers that include mass merchandisers and dollar stores, the pressure is on for Lander to keep margins low and service levels high. Logistics plays a major role in making that possible.

So director of logistics John Lister knew he had to move quickly when he found out in mid-March that Lander had to be out of the facility operated by its current third-party logistics provider in Los Angeles just two and a half months later.

Lister spent several days putting together the company’s requirements for West Coast distribution, then flew out to Los Angeles to see five 3PLs he had identified as potential providers.

“I provided them with our requirements and volumes plus details on our customers, and asked them for pricing,” Lister explains. With the 3PLs’ responses in hand when he returned to company headquarters the following week, Lister began evaluating the providers.

To identify the provider that best fit Lander’s customers and business, Lister made site visits to provider facilities, evaluating the potential providers’ operations, services, customers, location, service area, and systems. He narrowed the list to potential providers that he felt were a good fit. “Then the pricing came in and broke the tie,” he says.

At the end of March, Lister returned to Los Angeles with Lander’s IT director and EDI coordinator to meet with the finalist, ServiceCraft Logistics, Los Angeles. Lister negotiated the deal, then the team ironed out systems requirements and began the complex process of setting up the EDI infrastructure.

The two companies then began making the arrangements that would enable ServiceCraft to take over distribution and transportation for seven states. That included consolidating Lander’s shipments with those of other customers.

Making the Move

To prepare for the move to the new 3PL, Lister developed a detailed transition plan and timeline, soliciting feedback from manufacturing, information technology, finance, and sales and marketing. To make sure the transition to the new company stayed on schedule, Lister held weekly conference calls with ServiceCraft as well as Lander’s manufacturing unit and inventory planning department.

Lander began shipping inventory to the ServiceCraft facility in early May in preparation for the May 19 go-live date. Lister and the manager of Lander’s warehouse in Binghamton, N.Y., traveled to the new facility in mid-May to work with ServiceCraft.

“We spent a week there to make sure they understood customer requirements,” Lister explains. While a few glitches occurred early on, “I’m very happy with everybody’s performance,” he says.

“Considering the aggressive timeline we had, we did a great job.”

Just a few months into the new relationship, ServiceCraft’s consolidation of Lander products with those of other customers is going very well, Lister says. While it’s too early to evaluate transportation savings achieved through the consolidation, there have been no service shortfalls.

“In fact, it’s just the opposite,” Lister notes.

Beverage Group Writes Its Own Outsourcing Menu

Logistics outsourcing was always part of the business plan for The Beverage Group Inc., Pasadena, Calif., a wholly owned subsidiary of AMCON. The Beverage Group distributes premium beverages such as Hype Energy Drink, XTERRA, Royal Kona Blend, and Hawaiian Natural Water.

The Beverage Group distributes via a network of six warehouses, located in California, Oregon, Illinois, New Jersey, Texas, and Georgia. Its products are generally sold in LTL quantities to all classes of trade, including retail, convenience stores, mass merchandisers, club operations, and military outlets.

“With the types of services offered by today’s 3PLs, we decided early on that it didn’t make sense for a company like The Beverage Group to have logistics people on staff,” says Thomas Van Dixhorn, the company’s vice president of operations.

“We put a lot of effort into the 3PL selection process, doing our homework to determine industry averages and understand what types of service were available,” he notes.

Then the company began defining requirements. “We started with a clean sheet of paper,” Van Dixhorn says. The top item on The Beverage Group’s priority list was a provider’s capability to consolidate outbound LTL shipments. Because it would facilitate consolidation, “we also wanted providers who had clients with similar products going to the same customers,” he notes.

In addition, he says, “we were looking for a full-service 3PL with warehousing operations that were strategically located close to our customer concentration. We also wanted online, real-time inventory and freight information systems.”

The ability to handle all modes was particularly important for The Beverage Group, which has international and domestic suppliers as well as a plant in Hawaii. “We looked for cost efficiency in warehousing and inbound/outbound freight, as well as ocean cargo, intermodal, and over-the-road distribution capabilities,” Van Dixhorn says.

Van Dixhorn put together a Request for Proposal and sent it to three potential providers. “We requested specific warehousing costs as well as consolidated LTL rates and full TL costs to and from specific ZIP codes,” he says.

Los Angeles-based CaseStack Inc. stood out for The Beverage Group. In addition to CaseStack’s strong consolidation capabilities and robust web-based information system, “its warehousing locations fit our concentration areas,” Van Dixhorn says.

Van Dixhorn arranged for a negotiation session with CaseStack. Two decision-makers from each company attended. In about two hours, the negotiation was completed. “Going into the negotiation, we were very clear about our requirements. That helped expedite the process,” he notes.

CaseStack began receiving and shipping product in February of this year. Because both companies do business electronically, “on a transactional, day-to-day basis, the majority of communication is handled online,” Van Dixhorn says.

Using exceptions-based communications, “the personal touch is there whenever we need it.”