Food Distributor Builds Window to the World
Efficient Global Supply Chain Management is Nearly Impossible Without a Clear View Into the Pipeline
Consumer Goods Technology, May/June 1999 - By Consumer Goods Technology Staff

Liberty Richter, Saddlebrook, NJ, is using 3rdwave, a global sourcing logistics and distribution application to fulfill orders quickly and completely, reduce excess inventory, and accurately track costs against specific products.

The result: in a low-margin, competitive market, the company is poised for greater growth and profits.

The specialty food importer represents 80-plus brands of international specialty foods. Its primary markets are retail grocery, foodservice and hospitality, and wholesale distributors.

With so many products coming from offshore, Liberty Richter faced two challenges: visibility into available inventory - product on hand and in transit that could be allocated to orders; and effective tracking of product cost to determine brand profitability.

Poor visibility meant the company had an imbalance of inventory - too much or too little - to match supply with demand. With 2,000 customers, many of whom order frequently and in small quantities, coordination between sales and procurement was difficult.

As vice president of finance, John McLennan, needed to give marketing and sales an accurate view of activities on the procurement side, and procurement needed an accurate view of sales.

In 1996, to solve these problems, Liberty Richter chose the Blinco Systems’ 3rdwave (enterprise-wide) import and distribution software. 3rdwave software integrates the key functions of purchasing, inbound logistics and tracking, inventory control, order entry, accounting, and finance. Using 3rdwave, Liberty Richter has significantly reduced excess inventory and out-of-stocks. 3rdwave allows it to determine profitability of each product with far less effort, saving labor costs and further boosting the bottom line.

With 3rdwave, information flows across the enterprise, giving real-time visibility anywhere in the system. Liberty Richter knows what products are in the global supply pipeline. It knows current sales and future commitments. The software identifies the contents of every lot in every warehouse, and the balance against each lot. Damaged products are earmarked and their location recorded. The software identifies which products are date sensitive, and their expiration dates. Lot-specific releasing can occur from anywhere within the physical inventory system, so orders can be cross-docked, further reducing costs.

Whenever a customer orders, the 3rdwave software automatically checks for other outstanding orders so shipments and billing can be consolidated. The savings in this area alone are in the tens of thousands of dollars, McLennan reports.

McLennan identifies four other benefits:

• Information Flow Up: Workflow is streamlined because information flow has improved. iberty Richter now better manages supply-chain relationships.
• Shipping Costs are Down: Customer orders can be combined and consolidated. Results: better shipping rates.
• P/L by Brand Set: By automatically matching all costs associated for a specific brand, Liberty Richter knows exactly how much each contributes to profit. "That will impact how we do business with those brands in the future," McLennan says.
• Sales Plan Tracking: "We need to be able to look three to six months ahead and know whether sales are ahead or behind budget," says McLennan. The company also knows, at any time and in real time, if it has enough inventory to meet sales commitments.

Since this project started, Liberty Richter has nearly doubled in size. Says McLennan, "We'd like to double again in the next four or five years, with minimal increase in head count. We see 3rdwave as helping us do that."

(Footnote to article: By 2003, Liberty Richter had doubled in size, and only added 4-5 additional staff, thus having achieved significant ROI.)

For related information, please go to:
3rdwave Food
3rdwave CGD (for Consumer Goods Distributors)
3rdwave Global Logistics