CLIENT SUCCESS

America’s Favorite Sandwich Cracker Brand Celebrates 100th Anniversary with Supply Chain ExcellenceManufacturer Cites Supply Chain Visibility as Essential to Exceptional Growth

How many 90-year-old brands are still growing at a rapid pace? Many businesses nearing the century mark have established themselves as industry icons and are maintaining slow, steady growth. Not the Lance brand, now part of Snyder’s-Lance, Inc. The brand was just hitting its stride at age 90 and then nearly tripled in size over the next decade. Celebrating the 100-year anniversary of the Lance brand, the company attributes its strategic advancement to the logistics sector and its strategic partner Transportation Insight. A decade earlier, Lance was already a very successful brand. Based in Charlotte, North Carolina, the brand had earned a 60% market share in the Southeastern United States, with most of its revenue coming from strong organic growth. Their momentum was supported by a superior customer service network – the foundation for Lance’s future growth. The ChallengeTo grow long term and become a major national player, Lance knew that they needed to expand geographically and simultaneously broaden their reach into new product streams and delivery channels. After acquisitions of brands such as Tom’s Foods, Archway Cookies, Cape Cod Chips and many others, Lance merged with Snyder’s of Hanover, widely known for their variety of pretzel snacks, to form Snyder’s-Lance, Inc. The $1.8 billion powerhouse now features many nationally and internationally recognized snack food brands in its portfolio, including the 100-year-old Lance brand.

Over the past decade, this strategy of growth through acquisition presented challenges of integration on many levels: information systems, production lines, company culture and product branding to name a few. But the most critical element associated with acquisitions executed with excellence was the integration, redesign and optimization of the snack food company’s ever-growing, complex supply chain.

As Snyder’s-Lance broadened its market reach, the company needed total visibility to a network containing more than 40 distribution centers and 3,400 store locations. Operating costs were rising while profit margins were shrinking.

Because Snyder’s-Lance was growing so fast, many of its acquired entities were operating in silos with independent supply chains and technology platforms that performed similar functions. Numerous labor-intensive processes, such as GL coding, freight charge quoting and shipment tracking existed across the enterprise, adding significant dollars and hours to the company’s cost to serve its customers. It became clear to company leadership that process controls and reviews needed to be improved.

Acknowledging the importance and complexity of solving these challenges to achieve its growth strategy through acquisitions, the company formed a partnership with Transportation Insight to develop a co-managed enterprise logistics solution to improve freight visibility, reduce transportation costs and, as a result, reduce freight as a percentage of revenue to improve its narrowing profit margins.

The SolutionUnder the umbrella of the Extended LEAN® methodology, Transportation Insight developed a scalable enterprise logistics solution in partnership with Snyder’s-Lance. The multi-faceted program focused on the continuous improvement and increased visibility of its end-to-end supply chain. The strategy aimed to connect all elements of the Snyder’s-Lance supply chain and help the company plan for future growth. True to its Co-managed Logistics® approach, Transportation Insight’s team made recommendations based on expert analysis, but Snyder’s-Lance maintained total decision-making control. The end in mind was to give the Snyder’s-Lance team total visibility to its transportation network and provide supply chain analytics, so that the company could make accurate supply chain decisions very quickly at both a tactical and strategic level. Improvements included the following:

Reduce freight costs as percentage of sales n Service improvement with strategic LTL and Truckload sourcing programs n Contract management of Snyder’s-Lance 150 carriers used across all modes (LTL, Truckload, Refrigerated, Intermodal)

Integrate TMS Technology with Oracle ERP across the entire enterprise n Receipt of orders – All open orders flow from Oracle to Insight TMS®. n Preparation of transportation – Snyder’s-Lance employees work in Insight TMS and load optimization applications if needed.

n Completion of arrangements – All trips are finalized in Insight TMS and routed to Oracle. n Tendering of shipments – All shipments are tendered through Insight TMS across all modes.

Automate the freight invoice auditing and payment process n Integration with ERP to match Bill of Lading (BOL) files to shipments n Automated GL coding to product level n Decentralized structure – single consolidated invoice for each location

Execute tendering and tracking of shipments as needed n Load tendering n Event managementProvide actionable supply chain reporting and analytics n Static reporting n Carrier metrics n On-time performance n Least-cost carrier metrics

Create a customized interactive metrics package n Freight as percentage of invoice – analyze true cost to serve customers n Linehaul, cube metrics, accessorials, fuel surcharge costs and mode mix against benchmark n Freight accruals n Carrier scorecards

Determine least landed cost of products with network modeling and continuous analytics n Distribution strategies – What-if scenarios n Integration of acquired companies’ transportation networks into the Snyder’s-Lance system n Zone shipping modeling n Regional shipping modeling n Facility closure costs and redistribution analytics n Product launch strategies n Co-pack vs. in-house production

The ResultsThe partnership between Snyder’s-Lance and Transportation Insight has resulted in many accomplishments. Not only has Snyder’s-Lance been able to maintain its growth strategy by carefully managing its logistics costs, but also the company has instilled a culture of continuous improvement throughout its supply chain and across its workforce. The successes the partnership has achieved include the following:

Improved visibility n Enterprise-wide collaboration – removal of the silos n Informed decision-making with a predetermined set of key company metrics

Establishment of common order fulfillment processes across all business units through implementation of LEAN principles n Process automation n Dramatic time and labor savings

Reduced supply chain costs and improved customer service n Transportation costs were reduced by lowering freight rates and eliminating overcharges. n Strategic carrier sourcing program aligned carrier strengths with Snyder’s-Lance strategic target markets (warehouse clubs, big box retail, grocery) and improved meeting of Must Arrive By Date (MABD) requirements. n Common logistics technology with Insight TMS aided in shipment optimization and execution.

Continuous optimization of supply chain network n More frequent, incremental revisions to network redesign by Transportation Insight Supply Chain Analytics significantly reduced costs related to network redesign and modifications when compared to total network redesign. n Improved supply chain flexibility has enabled quicker adjustments to changes in raw material supply, production capacity and customer demands.

Enterprise-wide continuous process improvement and personnel development n Comprehensive continuous improvement assessments and follow-up events at multiple facilities n Multiple on-site LEAN training sessions n Numerous Kaizen (positive change) events across multiple channels: n Total productive maintenance (TPM) n Changeover reductions n Order-to-cash improvements n Scheduling improvements n Physical material flow improvements n Continuous improvement education across the enterprise – more than 75 Snyder’s-Lance employees have attended public LEAN workshops

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©2017 Transportation Insight, LLC. All rights reserved. R2FS 2/2017

“Each acquisition, as well as our merger with Snyder’s, presented different challenges. But supply chain visibility was always key to our success. For more than a decade, Transportation Insight has provided horsepower that

drives our continuous supply chain optimization efforts.”

Doug McCraven, Director of Transportation ServicesSnyder’s-Lance, Inc.

Going ForwardThe forward-thinking union of LEAN principles and unsurpassed logistics expertise has fueled growth of the Snyder’s-Lance enterprise at a pace far ahead of its competition. By employing the Extended LEAN methodology of continuous improvement across its supply chain, Snyder’s-Lance continues to improve communication and collaboration inside the enterprise while partnering with Transportation Insight to harness the power of actionable supply chain data. The company is also able to successfully fine-tune its entire supply chain to more quickly respond to changes in external factors such as raw material costs and customer demand.

The resulting supply chain excellence is the foundation for the future of the enterprise. Knowing this, Snyder’s-Lance continues to build a best-in-class supply chain management operation that will enable the snack food icon to maintain its position as a market leader for the next 100 years.

Annual Financial Impact

n Logistics Cost Reductions: LTL shipments 26.27% n Logistics Cost Reductions: Truckload shipments 9.80%n Logistics Cost Reductions: Invoice error corrections 2.52%n LEAN process improvements: Overall lead time reduction from concept to market 30%n Company revenue growth during the first ten years of partnership with Transportation Insight 289%