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3PL helps mower-blade supplier
sharpen its game
As business grew, parts supplier Rotary Corp. struggled to maintain service levels while keepinglogistics costs in check. A 3PL helped it rein in expenses and get its operations running smoothly again.
ROTARY CORP. HAS COME A LONG WAY SINCE THEdays when company founder J.D. Harvey sold replacementparts to lawn mower dealers and auto parts stores fromthe trunk of his car. What started in 1957 in Harvey’sSoutheastern Georgia garage has grown into the world’slargest supplier of outdoor power equipment parts, tools,and accessories, with eight regional DCs nationwide and anaffiliated manufacturing division.
Now based in Glennville, Georgia, the company haslong prided itself not just on its parts but alsoits service—which includes a promise ofsame-day shipping on most orders. But asits sales grew and operations expanded,Rotary struggled to maintain its highservice levels while keeping rising logis-tics-related costs in check.
For help tackling those challenges, Rotary turned toits long-time partner Transportation Insight, a Hickory,North Carolina-based third-party logistics services company (3PL) that specializes in logistics optimization. Aftera review of Rotary’s end-to-end supply chain, companyleaders agreed on a multiphase plan that included a processoverhaul; the establishment of a “Co-managed LogisticsPartnership,” in which Rotary’s logistics team handles theday-to-day shipment execution with tools and technologyprovided by the 3PL; and ongoing support services, such asthe implementation of continuous improvement initiativesthroughout the enterprise.
OPERATIONAL OVERHAUL
Based on the results of the initial evaluation, the partnersdecided to tackle freight spending first—beginning withRotary’s small-parcel spend and later expanding to includeits less-than-truckload (LTL) and full truckload expenditures. The 3PL’s first move was to fine-tune its client’scarrier base, reducing costs initially through a strategiccarrier-sourcing program. Once that step was completed,Transportation Insight took over ongoing responsibilityfor negotiating and managing carrier contracts on Rotary’sbehalf. It also took charge of freight bill auditing and payment for its client, auditing all invoices to within $0.05 ofRotary’s contracted carrier rates and helping it resolve anydiscrepancies that arose.
Next on the docket was automation—specifically, auto-
mation of the many transportation-related functions—
To help control costs on the inbound side, Transportation
Insight also implemented a user-friendly vendor rout-
ing compliance solution for Rotary. Among other
capabilities, the software directs suppli-
ers to a portal on Rotary’s website to
find preferred carriers and provides
real-time routing designed to minimize
freight costs.
The process overhaul wasn’t limited tothe freight side, however. While its logisticsexperts were concentrating on Rotary’s transportationoperations, Transportation Insight’s lean consulting expertswere working with the supplier to boost productivity insidethe warehouse. As part of that project, which included optimizing order pickers’ paths and maximizing the use of floorand shelf space, the 3PL worked with Rotary to reduce itsspending on corrugated packaging and associated supplies.
DOUBLE-DIGIT FREIGHT SAVINGS
As for how the program has been working out, the resultsare downright impressive. According to TransportationInsight, the annual financial impact includes logistics costreductions of 20.2% on parcel shipments, 8.2% on truckload shipments, and 24.0% on LTL shipments and whatit calls “carrier rate increase avoidance.” That’s on top of1.1% in administrative cost savings (all modes) and 2.9%in “invoice-error cost avoidance (all modes).” The company has also realized a 15.5% reduction in its corrugatedpackaging costs.
Given the extent of the savings, it’s little surprise thatRotary’s leaders give their 3PL partner positive reviews.“Every component of the Transportation Insight solutionhas proven invaluable as Rotary continues to grow itscustomer base, deliver shipments on time with excellence,… mitigate increasing supply chain costs, and remain themarket leader in the outdoor power equipment replacement parts industry,” Donald Fountain, Rotary Corp.’s vicepresident of operations, said in a statement. n
