Doing What’s Best For Our Partners: Custom, Cost-Saving Solutions For Business Growth

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There are various ways to combat the rising costs of food manufacturing. However, many of these solutions can be expensive and complicated, making them hard to implement. These solutions include operational automation, redesigning packaging, changing suppliers, or using less expensive ingredients. They all promise to save money, but often come with different challenges, and it may take a long time to see any cost benefits if they do at all.

With inflation reaching levels not seen since the 1980s, shoppers are turning to store-brand and off-brand products to save money at home. This change in consumer behavior is impacting food manufacturers.

Recently, a well-known food manufacturer and long-time customer, contacted Skidmore Sales looking for help cutting costs. They believed this meant possibly using different ingredients, changing suppliers, or changing production lines to meet their cost-saving goals. None of these solutions were ideal.

Following a fact-finding meeting with the customer, the Skidmore Sales team promptly established a task force dedicated to this challenge. This team included members from many of our operational departments, and each team member delved deeply into the account data, focusing on their area of expertise. Their objective was to identify potential cost-saving opportunities for this customer.

To the customer’s delight, the team returned quickly with a proposal that reduced costs without altering ingredients, suppliers, or production lines. The plan created a custom, streamlined logistics corridor for the company, utilizing the Skidmore network of nationwide warehouses. This enabled the manufacturer to consolidate orders and freight, resulting in one truck making deliveries to multiple manufacturing locations within the same region. The deliveries arrive on the same day each week, providing a set schedule that simplified the work required of their operations and procurement teams. This, in turn, allowed the company to manage fewer orders and invoices while avoiding the costs associated with shipping less-than-truckload (LTL). Most importantly, the cost savings were immediate and significant, with the average freight per pound costs dropping nearly 80% within a month of implementing the program.

Our customer was delighted with the results, and they are now exploring ways to expand the corridor project, including incorporating more ingredients in the shipments and establishing shipping corridors within their other geographic regions.