Leading cheese specialist chooses Culina Logistics for consumer brand contract

Dairy Partners Ltd a UK manufacturer of cheese ingredients and sales and marketing partner for EU produced consumer branded dairy products, has awarded a contract for the storage, picking and distribution of its retail product range to Culina Logistics, the market-leading provider of logistics services for food and drink companies. The contract became fully operational in June 2011 and is managed from the Culina Logistics depot in Stafford to utilise a shared user model across the company’s network of ten sites to optimise transport with minimum vehicle movements and delivery lead times.

“Following a highly successful trial period using Culina Logistics as our distributor we are delighted to have awarded our distribution contract to them,” says Robert Peel, Director at Dairy Partners. “We look forward to growing our business with Culina over the coming years.”

Dairy Partners is a leader in the UK cheese industry. It serves the foodservice, manufacturing, wholesale and retail sectors. In addition to being one of the largest suppliers of Grated Cheese in the UK the company also markets a range of retail dairy products including the popular Peelable Cheese brand.

The company awarded the contract to distribute its retail lines to Culina Logistics after reviewing its operations. One of the main reasons for the decision to switch suppliers was Culina Logistics’ ability to provide an economical, flexible and scaleable solution. Palletised products are delivered to Culina Logistics’ Stafford depot from Dairy Partners’ producers in Europe by third party transport. Culina Logistics utilises its established shared user model and network of ten depots throughout the UK and Ireland to manage storage, picking and distribution. This ensures the efficient and timely delivery of products to Dairy Partners customers including major high street multiple retailers and food service sector wholesalers.

“We’ve configured this operation to provide Dairy Partners with a solution that meets its current requirements but which can be scaled up easily as their retail business grows across the UK,” says Mark Baldwin, Account Manager at Culina Logistics.

Culina Logistics operates a highly efficient model where storage and distribution infrastructure and services are shared between users throughout its network. Any vehicle on the road will be carrying products for multiple customers while individual pallets might also contain products from different suppliers but with a common, shared destination. In this way Culina optimises not only the resources utilised in each depot and throughout the network but ensures each vehicle is filled as fully as possible for effective and economical transportation. Supply chain efficiencies and economies of scale allow the company to provide an efficient and cost effective solution to customers of all sizes which can be scaled up and down to meet seasonal peaks and the demands of promotions.

Strengthens senior leadership to build business growth

Culina Logistics has promoted Nick Thompson to the role of director with responsibility for chilled operations. Nick joined the company in July 2011 and served as  chilled operations manager until the new appointment. Prior to joining Culina Logistics he was most recently with one of the UK’s major food service suppliers where he was responsible for running regional and national distribution centres. He will be based at Culina Logistics’ head office in Market Drayton and report to chief executive officer, Thomas van Mourik.

“We have a great team and an excellent track record for delivering innovative added-value for our customers,” says Nick Thompson. “Since joining the business and discussing our operations with stakeholders I’ve recognised that there is scope to add even more value and raise the service bar higher in the food & drink sector.”

A key aspect of the role will be to develop the Culina Logistics offering for chilled operations and share best practice with the company’s rapidly growing ambient service, which will include identifying synergies and opportunities for greater efficiencies. As part of this process Nick has been meeting with client managers at customer sites to discuss the services available to them and looking at how continuous improvement can add value across the chilled operation.

As an example, one of the company’s clients was already achieving a highly creditable on-time delivery success rate of better than 95 per cent but wanted to do more. Working with the client Culina Logistics introduced a series of incremental improvements that have led to on-time delivery rates consistently reaching 99+ per cent. This success has enabled the client to offer an enhanced level of service into the market place and create new customer-facing messages about the significant improvements it had made.

“We want to think more strategically about how to get the most out of all parts of the business,” says Nick Thompson. “The delivery rates improvement we introduced with this client illustrate what can be achieved by working even closer with the customer.”

The new appointment is the latest stage in company’s plan to double the size of the business within the next five years.

Result? Shorter supply chains and improved on-shelf availability

Tesco, the UK’s biggest retailer, is asking its suppliers to shorten their supply chains by introducing “next day” deliveries for ambient products. In industry parlance this is known as “Day One for Day Two” which perhaps more accurately describes how the process works; orders received before a predetermined time on the first day are delivered within an agreed window on the second. Order picking and transportation typically takes place during the evening and overnight.

In fact this is a tried and tested process for chilled and fresh products where items need to be delivered in the shortest possible times so that retailers can offer consumers the best possible combination of service, quality and availability. The perceived wisdom has for some time been that ambient - in other words, non perishable - items did not need to be delivered as quickly. Instead the ambient grocery sector has historically operated with orders being placed on Day 1 for delivery on Day 3 across a Monday to Friday cycle.

But times are changing and retailers recognise that stock tied up in the supply chain - in the warehouse or on the road - requires more capital and generates costs that can be reduced. Moreover, aligning processes for chilled and ambient should in the long run provide synergies and efficiencies for retailers, suppliers and supply chain operators.

A number of major multiples have been driving demand for a Day 1 for Day 2 deliveries for ambient products to reduce working capital tied up in their supply chains and to improve on-shelf availability to enhance their customer service. Tesco has stated its desire to reduce ambient lead times and has been working with its suppliers and third party logistics providers to introduce this new way of working on a cost-neutral basis across its distribution network. Initial implementations of this service, including one managed by Culina Logistics, will cover a six-day, Monday to Saturday cycle.

This new operation commenced at the end of January 2012 and has been operating successfully since then, achieving these benefits for Tesco and its suppliers. The infrastructure and processes in place to support next day deliveries from Monday to Saturday mean the option to expand to full seven-day service is available if required by Tesco and its suppliers.

Although the lead time requirements of the ambient and chilled grocery markets are converging the profile and sensitivities of the products and the processes within many supplier and retailer distribution networks mean that the respective supply chains will remain largely independent for the foreseeable future. However, supply chain service providers who have significant operations in both sectors will be well placed to identify and take advantage of opportunities and synergies that lead to more efficient supply chains.