Del Labs Gets the Freight Out (and In)
Del Labs, a leading manufacturer of cosmetics and over-the-counter pharmaceuticals, sought to improve its bottom line and its supply chain logistics.
Working with Del Labs’ existing employees, Supply Chain Edge assumed responsibility for Del Labs’ transportation function. Following a spend analysis, Supply Chain Edge renegotiated Del Labs’ long-term carrier contracts and helped improve critical transportation processes.
These changes enabled Del Labs to save approximately $3 million in 18 months.
Since 1961, Del Laboratories has been a leading manufacturer of cosmetics and over-the-counter pharmaceuticals sold through distributors, licensees, and partnerships, with operations in more than 60 countries. In 2005, Del Labs, a publicly traded company, was taken private by the Kelso Group, a private equity firm. Two years later, Kelso sold Del Labs to international fragrance giant Coty Inc. The acquisition was primarily driven by the strategic fit of Del products with Coty’s diversification plans, but would not have been possible without tremendous improvements in the Del supply chain during the Kelso-owned years.
When Kelso purchased Del Labs it had good market share, very strong marketing and sales, and excellent customer relationships. However, the company also had an opportunity to improve its bottom line as well as its processes and practices for managing freight, moving finished goods to customers and bringing raw materials in from suppliers.
Del Labs asked Supply Chain Edge to help it understand how the company was spending its money on transportation, and then to optimize its freight management systems to create consistency, provide reliability, improve quality and reduce costs to strengthen the bottom line. Because of the scope of the effort, Del Labs executives determined it would be best served by outsourcing the company's entire transportation management function to Supply Chain Edge.
Shortly after assuming responsibility for Del Labs' transportation function, Supply Chain Edge focused on collecting the transaction data necessary to identify exactly how and where the company was spending its money. Once it had those figures in hand, Supply Chain Edge immediately began renegotiating the company's long-term contracts with its carriers. With carrier contracts in place, Supply Chain Edge then took aim at improving key transportation processes to meet customers' service expectations more effectively.
With deep insights into its transportation spend, new and more favorable carrier contracts and substantially improved transportation, distribution, and sourcing processes, Del Labs experienced a savings of approximately $3 million in 18 months. With help from Supply Chain Edge, Del Labs was able to improve its bottom line substantially and, in the process, make not one but two owners happy.