Rough seas make stronger sailors

Thanks to the power of collaboration and strong business relationships, the world’s second largest cruise operator, Royal Caribbean Group, is getting ready to bounce back after the Covid-19 crisis

For many people, the name alone is enough to conjure images of turquoise seas and sunsets on wide horizons. Royal Caribbean Group operates some of the most popular and recognizable cruise brands in the world - including Royal Caribbean International, Celebrity Cruises and Silversea Cruises - and has continuously redefined cruise vacationing for its guests since 1969.

Serving a large portion of the 30 million people that embark on cruises each year, Royal Caribbean has become known for its friendly and engaging service, adventurous itineraries and onboard innovation that includes a number of industry RCG afirsts, such as rock climbing, ice skating and surfing at sea. After years of hard work, the company has earned its reputation as a well-loved and respected vacation provider, and so it was with great sadness that the world received news of the challenges Royal Caribbean and its cruise sector colleagues faced in 2020.

“The travel industry has been hit extremely hard by the Covid-19 pandemic, but you will not find a subset of the sector that has been hit harder than the cruise lines,” declares Paul Litvinov, Royal Caribbean’s Vice President of Global Supply Chain Management. “Rightly or not, cruising was perceived early on as something that causes easy transmission of the virus and so all sailing was suspended. As opposed to hotels and airlines that are able to achieve some revenue in some parts of the world, cruise lines were not able to sail anywhere at all for many months.

“As always, the safety of our passengers and staff was our number one priority throughout,” Paul adds. “In some instances, the crisis meant that there were no flights available so we sent ships from Florida to Asia full of crew. It’s our duty to keep our crew safe, so we were happy to do it.”

Understandably, as the cruise industry battled the impact of the pandemic, its suppliers began to feel the strain. While Exxon, Coca-Cola and the rest of Royal Caribbean’s multinational partners were able to mitigate the damage of Covid-19 to their businesses, smaller, independent companies suffered greatly.

With no sailing for nine months, travel advisors were affected more than most. Having forged excellent working relationships with its partners and suppliers in over half a century of business, Royal Caribbean acted in solidarity with the travel sector in December 2020 and introduced Pay It Forward, a $40 million pool of funding available to qualifying travel advisors as they look to rebuild their businesses.

The goodwill and cohesion on display in Royal Caribbean’s Pay It Forward campaign has been reciprocated in other areas of the industry. Working closely with its long-standing suppliers, the cruise operator was able to extend payment terms for many goods and services as the sector worked together to tackle the downturn.

“We continue to pay and we continue to honor our obligations as much as possible because we still have consumption in areas like technical part suppliers that way. Of course, it is much less than what we operate with normally, but it is not insignificant and we are providing companies with business in a tough time.

“In addition to Pay It Forward, we have also created a workstream with Ernst & Young to guide smaller suppliers towards a more efficient way of applying for government assistance. The US has a lot of initiatives in place, such as the Paycheck Protection Program, to help businesses with loans and keep that workstream going.

“Right now, we are working with suppliers to understand their inventory position so that when we resume cruises, we can start pulling product that has been sitting on their shelves because it is good product, within the expiration dates. We just want to support these valued partners. Our relationships have been built over many years of trust and collaboration, which is really helping us and them to come through this situation in a big way.”

Though it is difficult to confirm an exact timeline due to the unpredictability of Covid-19, the ongoing rollout of a vaccine for the virus means that Royal Caribbean is already preparing to bounce back. Short cruises out of Singapore were the RCG bfirst to return in December 2020, and the firm’s joint venture with TUI Cruises in Germany resumed sailing in a limited sense earlier this year.

Royal Caribbean aims to start operating on a larger scale as soon as possible, but customers will not be back on the high seas until the company and industry regulators are absolutely comfortable with cruise liner safety. In 2020, the company joined with Norwegian Cruise Line to form the Healthy Sail Panel – a taskforce of globally recognized medical and scientific experts that develop recommendations for establishing the strongest protocols in the travel industry. Panel-led rules and procedures will play a huge role when Royal Caribbean ships next leave port.

“It’s difficult to predict when things will get back to normal, but we are very focused and working extremely hard on our return,” Paul reveals. “We have new suppliers and we are buying a lot of medical equipment so that we can test people prior to the cruise and exclude any guests or crew if there are any unfortunate Covid-19 cases. We want to create an airtight bubble onboard, but ultimately the vaccine will help us the most. We are staying motivated and will start cruises as soon as it is safe.

“There is huge pent-up demand at the moment for people who really want to go on a cruise,” Paul continues. “Everyone is sick and tired of being inside and they want to take vacations. Bookings are very strong for later this year and 2022. Just recently, a big oil company came to me and said they wanted to buy hundreds of cabins for its employees on the first cruise back, so we have a lot of reason to be optimistic. When we bounce back, I think we are going to bounce back in a very, very big way.” 2020 was a tremendously challenging year for Royal Caribbean, but the company has weathered the storm and is confident that smoother waters lie ahead. One thing customers can be sure of is that when the operator’s cruises return to the seas, they will still be among the most modern, innovative and revolutionary in the world.

“There is a very clear distinction between us and the rest of the industry. A lot of it comes down to that spirit of innovation that began when we brought out the monumental Voyager class back in the early 2000s,” Paul explains. “Our cruise liners have the most creative and advanced hardware in the market, from the world’s tallest viewing deck on a cruise ship to onboard replicas of Central Park and Coney Island. We were the first company to transform a private island into a blend of theme park and luxury resort in the Bahamas. We are almost the Apple of cruises in that way – we come up with the features that people have never even thought of and before they know it, guests cannot imagine cruise ships without them!

“Up until the pandemic, Royal Caribbean had been smashing records year on year and we were really set up for huge success,” Paul summarizes. “I am confident that this success will resume once the crisis is over. We still have a lot of ships being built, including a brand-new cruise liner launching in April. I know 2021 won’t be easy, but we have exciting hardware ready for release, and we have great relationships with our customers, suppliers and travel advisors, so I think the future is very bright.”

Royal Caribbean Group
www.royalcaribbean.com
Services: Global cruise holding company

New year, new opportunities

The year 2020 was a non-stop ride for Purple, yet thanks to its industry leading supply chain infrastructure and company-wide performance it enters 2021 firing on all cylinders

As Vice President of Supply Chain for one of the leading disruptive direct-to-consumer multi-channel brands in the mattress industry, Purple Innovation, Mike Schultz’s responsibilities within this rapidly growing and evolving business are understandably numerous. Having joined Purple at the beginning of 2018, Mike today oversees a number of functional areas throughout the organization, which are broken up into departments. Said areas include purchasing and production planning, sales and operations planning, quality control, logistics, transportation and global trade compliance, sourcing – both domestic and international – warehousing (which encompasses inventory control) and fulfilment (which includes Purple ahome delivery).

When Mike came into the business, Purple was already turning over approximately $200 million in annual revenue, yet he freely admits that, at the time, it lacked the necessary infrastructure to support the high rates of growth that it was experiencing. Fast forward to January 2021, however, and the efforts of Mike and the rest of the Purple team have put the company in a much stronger position than arguably ever before.

“I strongly feel that with the team and infrastructure we have in place today, Purple is in the best possible position to maintain its strong rate of growth, while continuing to fine tune itself in order to become increasingly profitable,” Mike states. “We remain incredibly focused on our customer centric activities, and therefore our fulfilment and delivery operations continue to get a lot of attention. We also work continuously on operation discipline in order to minimize mistakes and channel our efforts into managing our growth, as opposed to spending time fighting fires.

“Meanwhile, moving forward more of our efforts will be channelled towards achieving greater efficiencies. When a business is in a high growth mode, it can be easy to experience death by 1000 cuts when it comes to waste, shrinkage and so forth. Therefore, it falls upon us in the supply chain – and indeed throughout Purple – to minimize such things wherever possible. I believe that we have done an excellent job in doing so to date, and we will continue to work to get the best out of Purple, whilst maintaining a culture that is based around high performance.”

At the heart of Purple’s achievements to date has been its people. “It takes a certain type of personality and mentality to handle a high growth, high pressure type of environment like the one we have here at Purple,” Mike explains. “What it often comes down to is temperament and work ethic, and we look for those qualities

in everyone who comes into the business, from the top down. We have people within the business who come from a variety of backgrounds, from veterans to extreme sports enthusiasts (in a previous life Mike himself was a keen ice climber), and they share a desire to perform and to win, even if that means having to suffer for it at times!”

Possessing the right temperament and personality also comes into play when selecting which suppliers and vendors Purple forges relationships with. “Due to our brand profile and the fact that we excel in what is a premium space within our industry, a lot is expected of Purple as a brand, and we expect a lot in return from the suppliers and vendors we work with,” Mike adds. “From the outset, we are wholly realistic with said businesses about what our own expectations are, as well as what our limitations may be. We also do not shy away from the fact that we do push our vendors at times to get as much out of them as possible, so their ability to handle this and be flexible to our requirements is also a matter of high consideration. If they are seen to be able to meet such demands, and have a personality that matches our own, then we are confident that both parties will be a great fit for one another.”

Reflecting on the year just gone (2020), much of the company’s efforts were understandably dictated by the effects of Covid-19 and how Purple could continue to operate in a manner that – first and foremost – protected its people, yet also meet the growing demand for its products. “Employee safety was clearly paramount for us throughout 2020, and this required us to pivot the way our manufacturing operations work in order to keep everyone looked after,” Mike confirms. “In addition to implementing various CDC recommendations, such as sanitization protocols, face masks, temperature checks, social distancing and contact tracing, we also ensured that our professional staff had all the tools needed to effectively work from home.”Purple b

By enabling the business to function efficiently during the pandemic, Purple has also been able to continue to grow. In fact, from January through September last year, Purple hired an additional 900 employees, and saw its direct-to-customer business increase by an incredible 97.5 per cent. In that time, it has also opened up a number of new showrooms in locations throughout Texas, Virginia, Ohio and California, and has witnessed expansion within its distribution model.

Purple has also continued to push forward with various long-term investments that will support its future prosperity. “In October 2020, we rolled out what I would describe as a semi-automated fulfilment solution within our Utah facility. This non-conveyable, pick-to-cart system was installed with barely any disruption, and it has already helped to expand our capabilities considerably,” Mike continues. “Furthermore, we are excited to be on the cusp of opening up a brand new, 500,000-square foot facility in Atlanta, Georgia, during the first quarter of 2021, and among the different systems that will exist within this location, will be a new pick-and-pass mezzanine solution.”

Indeed, when Mike describes the last 12 months as a “non-stop ride”, one can certainly see what he means. What the company’s experiences have done, however, is help ready itself for 2021 and beyond. “Personally, I am really optimistic about the future,” he declares. “Everyone at Purple has worked tremendously hard to get to where we are now, and we are truly firing on all cylinders. We have fantastic infrastructure surrounding us, and with the opening of our Atlanta facility this will help us to begin playing at a whole new level. We recognize, however, that this will require us to continue to up our game, and this will call for further focus on things like the development of technical skills, achieving ever-greater efficiencies, minimizing waste, and managing our relations with vendors and suppliers through higher levels of communication and understanding. I am excited to see what new opportunities our efforts will bring, and I am confident that what we will see is yet more growth, which we will certainly have a lot of fun with!”

Purple Innovation
www.purple.com
Products: Mattresses, pillows, bedding and bases

HT a

Understand and deliver

One of the UK’s largest independently owned logistics companies, Howard Tenens provides flexible, tailor-made supply chain solutions across a diverse range of sectors

For Howard Tenens, everything starts with integrity and transparency. According to the company’s CEO, Jamie Hartles, it is this honest, uncomplicated approach to business that differentiates the firm from its competition.

“From an ethos perspective, we always do what we say we will,” he states. “When we make a commitment, we fulfil it and we invest time, effort, and capital in our relationships to make sure they are long-term. We don’t provide prices to undercut the market simply to secure new business and we always seek partnership relationships over transactional ones. As a company, we are very selective in the business we undertake and will always ensure there is mutual value in everything we do, whether that be with employees, suppliers or customers.”

With roots dating back to 1953, Howard Tenens is a family company with various business interests but is primarily focused on commercial property ownership and third-party logistics services. In 1983, perhaps the biggest year in the company’s history, Howard Tenens’ Chairman and majority shareholder Peter Morris completed one of the UK’s first management buyouts, purchasing the firm and making it a privately-owned business. Still a private company today, Peter’s sons, Ben and Dan, are now actively involved with Howard Tenens, providing added continuity to the operation and further solidifying its credentials as a family organization.

“Even today, in 2020, we still have some of the original customers that Peter brought with him in 1983,” Jamie reveals. “Clients stay with Howard Tenens because of our partnership approach to business and commitment to mutual value. As a privately-owned firm, we are not under the same pressure to grow as a listed company. This means we can expand organically and sustainably in collaboration with our customers and not sacrifice service or safety by overreaching.”

Favoring a bricks and mortar approach to business, Howard Tenens has always strived to own the properties from which it runs its logistics operation. The freehold commercial property portfolio has now grown to over four million square feet of warehouse space across the UK, and not only gives the company great flexibility when serving customers, but also represents a robust financial foundation, enabling the firm to invest in future growth. The logistics side of the business occupies around one third of the company’s owned warehouse space, with the remaining two thirds being rented to external clients as storage and commercial parking.

Serving customers across a broad spectrum of industries, including fast moving consumer goods, automotive parts, linens and medical scrubs, white goods, and construction and industrial products, Howard Tenens is a company unafraid to prove its worth to new clients. “Typically, customers start by giving us a smaller, more challenging aspect of their supply chain, but soon enough they realize we deliver where others fail. That’s when customers entrust us with additional work,” Jamie explains. “Our team try really hard to understand a customer’s requirements and ensure the solutions being implemented are as safe and efficient as possible. Our promise to provide exceptional service means we are not just storing a product and distributing it but undertaking value-added services to increase profit for the customer in question.”

Challenging conventions
Though the majority of its business comes from the food and drink sector, Howard Tenens is guided by customer demand and has recently experienced a significant increase in e-commerce activity. The agile nature of the firm means it remains open to change and is always prepared to adapt.

“At the moment, we have no plans to expand into other sectors, but it really depends on the client and requirement,” Jamie says. “If a customer asks for support in a new sector, we will always provide a solution for them.

“We are fortunate to work with numerous household names and blue-chip brands who come to us seeking value for money and great service. Our customers include companies like Honda, with whom we have established a strong relationship, built on trust. We serve every Honda dealership in the UK, every night, and the company provides us with keys and codes to its locations, knowing it can rely on us to put stock away so that parts are available to workshops in the morning.

“We also service Lavazza Professional on a dedicated, high quality coffee network,” he adds. “We have large alcohol duty bonded sites in the south east and south west providing flexible storage solutions to cater for the large seasonal peaks HT bof the beer industry. Across the board, we are increasingly encountering e-commerce online retailers who need solutions requiring heavy capital investment in conveyor systems, which we are happy to support.”

At the heart of Howard Tenens’ offering is the company’s ability to work in partnership with a client to deliver customizable solutions that challenge convention, while proving good value for money. Whether it’s a first-time outsource or a transfer from a third-party provider, the firm boasts a proud track record of creating open dialogue in its collaboration with clients, committing itself to learn as much as possible about its customers. Jamie suggests that the company’s work with Mole Valley Farmers is a particularly good example of the way in which Howards Tenens operates.

Bespoke scheme
“It was clear from the first meeting that Mole Valley Farmers was going to be an excellent cultural fit for us. The company is committed to ensuring greater choice and protecting farming members from the impact of fewer suppliers and the threat of higher costs,” he asserts. “They also aim to offer superior levels of customer service and the widest range of keenly priced, quality products.

“Mole Valley has grown significantly over the last few years and wanted a consolidated national distribution center, with a transport solution that ensured high-quality service levels. We have worked closely with the company since then and have now implemented a bespoke logistics scheme, servicing their store estate across the UK and making sure on-shelf availability remains high.”

As we move towards the halfway point of 2020, (at time of writing), Coronavirus continues to present challenges for businesses across the world. Due to the diversity of its customer base, and the vital nature of its work, Howard Tenens has remained operational throughout the pandemic, employing a number of initiatives to help mitigate the risks to its workforce.

“First and foremost, our focus has been on our people and keeping our amazing employees safe,” Jamie declares. “This has meant investment in personal protective equipment and significantly enhanced cleaning and hygiene standards. We are committed to ensuring that the people who work at Howard Tenens are kept in the loop, especially those working from home, and that the health of all our employees is protected as much as possible whilst they fulfil their important role as key workers.”

Environmental credentials
Though the company’s two-person vending machine delivery and installation service has been forced to shut down - Howard Tenens has offered an enhanced financial package to furloughed employees on the Government Job Retention Scheme - some areas of the business are not only operating, but thriving.

“Online retail is very busy,” Jamie reports. “We have supported our customers by either increasing resources to cope with such a large and sustained uplift in volume, or by helping them pivot their offering from a storefront solution to one based in e-commerce.

“There has also been an increase in demand for warehouse space, the finding of which is one of our key specialisms. Our Property Division has exceptional contacts in the marketplace, which means we have access to flexible areas that may already be let to other tenants, as well as vacant spaces on our own estate.

“It’s a two-sided process though, and huge thanks must go to all of our clients who have helped us through this unprecedented time. Where we have had to review a commercial arrangement, we have received support from our customers, large and small, and will continue to work in partnership with them to evolve the solutions we provide until we arrive at a new normal.”

What exactly the new normal will be, nobody yet knows, but Howard Tenens has already got its eyes on the future. The company recently signed a six-year lease for Neptune Works, a 145,000 ft² warehouse in Newport, taking its overall number of commercial sites to 18. The firm has also received planning permission for the development of further locations, totaling approximately 600,000ft².

“Where we own the land and the site, we typically commission the facilities ourselves,” Jamie remarks. “The size and layout of the warehouse will vary, but typically, we make them as versatile as we can, with plenty of access and exit points and as much height as feasible, given the build parameters.

“All our new buildings are constructed to an extremely high standard, ensuring maximum natural light, and where possible, environmental features such as ground source heat pumps and photovoltaic or motion-activated low energy LED lights. Having strong environmental credentials is important to us and so we work hard to ensure our buildings take that into consideration.”

Recognized on numerous occasions for its environmental work - including Gold Status in the company’s EcoVadis CSR Supplier Evaluation - Howard Tenens remains a leader in sustainable logistics. An early adopter of dual-fuel vehicles, the firm operates seven sites powered by solar energy, saving around 200 tons of CO2 every year. Over the next five years, Jamie expects to see more investment in sustainability initiatives, eco-friendly technology, and automation as Howard Tenens pushes towards a target of £125,000,000 turnover. Having reported years of back-to-back growth – including a 20 per cent increase in turnover in 2018 – Jamie is confident that the current pandemic will not prevent the company from reaching its goal.

“Competition in the logistics market is fierce and Howard Tenens continues to be successful by hiring and retaining the best staff, who understand the firm’s objectives and work together for the betterment of each other and our customer base,” he proclaims. “The impact of COVID-19 will be far reaching and will undoubtedly change our habits and requirements for good, but Howard Tenens has weathered numerous economic storms before and is exceptionally well placed to come through this one where some of our competition might struggle. We will continue to invest in the business and our customers throughout this process and will emerge even stronger as a result.”

Howard Tenens Logistics Ltd
www.tenens.com
Specialty: A proactive logistics company, providing innovative solutions

Food for thought

An effective and convenient weight loss platform, Nutrisystem provides everything customers need to accomplish and sustain their weight management goals, delivered right to their doors

A preeminent direct-to-consumer nutrition and weight management brand, Nutrisystem has helped millions of people lose weight safely and effectively for almost 50 years. The company’s portfolio of entrées, snacks, and shakes is Nutrisystem acomplemented by various live counselling options, including trained weight loss coaches, registered dietitians and certified diabetes educators that are available seven days a week.

Anyone starting a weight loss journey is looking to make some improvements to their life, and indeed, Nutrisystem itself has also been through some dynamic changes since it was last featured in Supply Chain World. In December 2018, Tivity Health announced that it would acquire the Nutrisystem brand, and just a few months after that deal was completed, it saw another evolution when, in December 2020, Kainos Capital took over the brand.

As David Burton, Chief Operating Officer, explained, Nutrisystem saw this as an opportunity to become a standalone business again and is very excited that Kainos Capital is the private equity firm that ultimately decided to go ahead with the purchase. “Kainos Capital is focused exclusively on the food and consumer industry, and its vision is to develop a world class direct-to-consumer e-commerce health and wellness platform. We are focused on expanding our digital capabilities and also on our product innovation to reach more consumers and help them on their health and wellness journey.

“We are just in the beginning stages of the partnership, but we are very excited that we are now part of a firm that really understands the food industry, and the health and wellness space. We are looking at an opportunity to leverage the shift in the industry to e-commerce and direct-to-consumer, and how we can build a platform that helps us reach more consumers in the industry.”

The customers that David refers to come to Nutrisystem to benefit from its balanced and clinically proven approach to weight loss. It offers portion-controlled foods specifically designed to meet consumer needs that are conveniently delivered directly to customers’ homes. Nutrisystem also provides a free digital app, NuMi, that helps customers track performance and achieve their goals. “We have a great solution that helps individuals lose weight, help them get healthier, stay active and improve their health outcomes,” added David.

Clearly a resilient business, Nutrisystem hasn’t been distracted by the changes it has been through and has maintained a high level of activity and of growth in 2020. “We have gone through changes of ownership, but our mission and vision remain the same and that is to help individuals to live happier, healthier, lives,” agreed David. “Over the past year, especially with the pandemic and the challenges of Covid-19, health and wellness is top of mind for consumers. As the largest direct-to-consumer health and wellness company in the country, we have seen tremendous double-digit customer growth over the past year, and they are staying with us longer. That gives us strong momentum as we head into 2021.”

David identified one of the big contributors to Nutrisystem’s success has been an alteration in how it is reaching its consumers. “Historically, Nutrisystem has been heavily focused on TV advertising but we are seeing a shift in the industry where digital marketing and advertising are playing a more significant role,” he explained. “We have been investing heavily in digital platforms, and we have focused on a digital transformation of our business, really looking at how we can better target and reach our consumers. This has also included improving our consumer database platform (CDP) and our messaging through digital channels, and this has been a big contributor to driving our growth.”Nutrisystem b

The second big focus for Nutrisystem has been on adapting its product range, and as David highlighted, this began two years ago, when the business launched a program focused on personalization. “We know that one size does not fit all when it comes to weight management and weight loss products, so we are creating a program that is more personalized to each consumer, based on their lifestyle, their food preferences and their body type.

“By introducing that, we have been able to have a more effective program that helps our customers on their weight loss journey. Each year, as part of our product pipeline, we introduce more elements and features around that personalization, which are delivered through our food development program and also through our NuMi App.”

The App that David referred to gives customers the ability to track their own program, weight loss and activity, and it also provides content around lifestyle changes and how they can adapt the Nutrisystem way of dieting into their own lifestyle. “All of those digital options have resulted in an increased level of engagement from the customer, and ultimately, this means that they are getting better results and achieving their health outcomes. They lose more weight, are learning how to keep it off, and they are seeing more success.”

While it is clear that Nutrisystem has thrived in 2020, what makes that success even more impressive is the fact that it was achieved at the same time as the company, and the world, had to cope with the challenges of the coronavirus pandemic. David admitted that there was no single part of the organization that went unaffected by Covid-19 and gave some details about how the business has coped with the dramatic changes that the virus has wrought.

“First of all, I am very proud of the resiliency of our business through this pandemic, as we had to adapt quickly and the reactions have been excellent,” he stated. “We shifted our messaging from a marketing standpoint, we introduced working from home and through all that we have still seen great growth.

“Specifically, from a supply chain standpoint, there have been challenges across every link, including food manufacturing, fulfilment and transportation. Thanks to the relationships and partnerships that we have established, and the amazing reactions from everyone, while there were disruptions, we have been able to pivot, reallocate and redirect resources where necessary, such as shipping volume from to one geographical area to another. This meant that when one part of the supply chain was under pressure then there were other parts that were able to alleviate it. It really was a balancing act of having open communication across all of our partnerships and working through those challenges every day.”

Having referred to the essential role that its close supplier relationships played in dealing with the new demands on the supply chain, David elaborated further on what Nutrisystem looks for in a partnership. “Having a shared value in keeping the customer at center is really important. We need to have the same vision around meeting consumer needs when it comes to health and wellness. We always ask, ‘how can we collectively work together to try and solve some of the health challenges that we have in our country?’ Every part of the Supply Chain plays a role in serving the customer on a daily basis.

“Another key aspect is common goals and making sure that from each side of the partnership there is an understanding of what we are trying to accomplish and make sure our goals line up with each other. This means that we have a lot of openness and transparency with our suppliers when it comes to developing new products or operating plans, and I think as long as we are all working towards that common shared goal and those shared values then it’s mutually beneficial for us.”

David also explained the symbiotic relationship between Nutrisystem, its customers and its partners, as it is more than simply ordering and delivering a product. “Weight loss is a very emotional journey, and it is a tremendous decision for people to embark on a weight loss program,” he said. “We want to make sure that we are helping to get them on board as quickly as possible, so it is very important that we are able to process orders, and deliver them to the consumer as fast as we can. Our delivery capabilities in a direct-to-consumer model are extremely important, and our partner FedEx is tremendous in this area. One of our key goals is to continue to improve that delivery experience with the consumer, and we can’t do that without partnerships such as those we have with FedEx and also with our 3PL, Geodis.”

Having highlighted the importance of prompt and reliable deliveries, David then stressed that this is only one part of its interactions with customers, and a key priority for Nutrisystem is to continuously improve its customer experience from end to end. “We are introducing innovation in the supply chain, and one part of this is the implementation of a new demand supply planning system from John Galt Solutions, and the focus there is to give us better visibility and collaboration across the supply chain around our demand supply planning. That in itself is going to improve the customer experience, because it helps us make sure we have the right product, in the right location, in the right quantities.

“We will also continue to look at automation within the warehouse, as our business grows and with some of the current labor challenges of the market, we need to look at how we can improve our efficiency in the warehousing and fulfilment of our orders. We are in the beginning phase of exploring different levels of automation to help us in that process.

“Lastly, we are examining how we can better utilize the data that we are collecting on our customers to achieve their tailored offering, and how that impacts not only their experience through our app and website but also ultimately in the products that we develop and deliver for them. We want to mine that data and really understand the consumer at a deeper level so that we can deliver on that personalized experience.”

The direct-to-consumer system adopted by Nutrisystem has been very successful but that doesn’t mean it is the only way that customers can purchase its products – they are also stocked by a range of retailers and David describes its omni-channel approach as one that has been evolving and developing over the past three to four years. “We wanted provide an infrastructure that enabled us to support consumers wherever they are on their journey and wherever they are shopping,” he said. “So, we have built core capabilities to support all of our online retailers, including amazon.com, walmart.com, target.com and kroger.com, and we wanted to make sure that as the industry and consumers shift how and where they are purchasing and consuming products, we are supporting retailers in how they serve their customers. We were the first dropship vendor that partnered with Walmart to deliver frozen food, and I think that was a great accomplishment. We were able to help Walmart and their consumers in providing that capability and the infrastructure to fulfil and deliver product on their behalf.”

Nutrisystem’s superlative delivery model also came into its own during the pandemic when it was able to come to the aid of people who were struggling to keep themselves nourished. “With our partnership with Tivity Health we were able to support those people that were finding access to food a challenge, especially seniors, and we continue to do that post divesture,” said David. “We are supporting health plans and local agencies that are focused on delivering and providing Nutrisystem cfood for those in need. While our primary business is focused on weight loss and weight management, we are able to provide nutritious meals for those individuals that are food insecure.”

This caring approach to the community is part of a wider social responsibility remit, and David was able to reveal a newly launched product that is part of Nutrisystem’s green agenda. “We have introduced an eco-friendly cooler as part of our initiative to improve sustainability, which uses environmentally-friendly packaging materials,” he said. The new coolers are biodegradable up to 92 percent over a four-year period, and are made with thermally robust materials, and can be reused or repurposed. The coolers are part of Nutrisystem’s commitment to reducing the environmental impact of its products and the company is excited about their launch. “It is something new for us and it is an investment that we made because we felt that it was the right thing for the environment,” David added.

As we start the New Year, Nutrisystem continues to concentrate on improving its performance, using the lessons it has learned through 2020 to make sure that is it operating effectively across all levels of the organization. “From a food standpoint, we continue to enhance and build our frozen and cold chain capabilities, and I think one of the key learnings we discovered was that we needed to have more redundancy across our supply chain,” said David. “At the beginning of the pandemic we had a bit of redundancy which definitely shielded and protected us from any major disruptions, but through the past nine months we realized there is an opportunity to increase that redundancy and to take even more pressure off and have more contingency plans in place. So, as we head into 2021 that has been a focus – looking at the areas of the supply chain where we need more redundancy and contingency, and actively putting those in place.”

These activities are being undertaken alongside work on a new premium line of frozen products, the introduction of new programs and a continuing focus on personalization, as well as other ways to improve that all important customer experience. “We are looking to launch those over the next six months, and they all have an impact on the supply chain and our fulfilment. So, we are also examining how we are designed across our network to make sure we are able to deliver that. As we integrate with Kainos Capital and really focus on driving better experience, we will continue to build and focus on all these areas and more!” David concluded.

Nutrisystem
www.nutrisystem.com
Services: Commercial provider of weight loss products and services

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Nutrabolt a

Thunderous success

Recently named among the Top 100 Best Companies to Work for in Texas, Nutrabolt’s ability to build strong relationships has helped it become the leading sports nutrition business in the world

Like the sports nutrition drinks and powders for which the company is renowned, Nutrabolt is reliant on a number of key ingredients. Though each component is vital, it is really in combining the separate elements that the business has discovered a true recipe for success.

Grit and determination helped take the firm’s early products from small-town Texas to GNC stores nationwide, where its pre-workout brand, C4, and post-workout brand, Xtend, became popular mainstays in the sports nutrition market. Since featuring in Supply Chain World in 2016, Nutrabolt has been a ‘rocket ship of growth’, declares Vice President of Procurement, Brendan O’Toole.

“In the 24 months prior to Covid-19, our mix of products developed in line with changing consumer demand and shopping habits,” Brendan reports. “We have been building more of a digital presence, and whereas GNC and other distribution stores were previously our breadwinners, we have adapted how we operate from a supply chain performance standpoint. Nowadays, everyone wants to be in Walmart, everyone has to play with Amazon, and so we are becoming a true omnichannel partner.”

Along with the ability to reach more customers, the omnichannel approach has reduced risk for Nutrabolt, something that has been especially pertinent in 2020 with Covid-19 leading to the closure of many GNC stores across the US. This is why Brendan believes that, when it comes to the supply chain mix, volume and diversity are highly beneficial.

“If you are beholden or leveraged to a certain customer channel, it can create a dicey situation, and the same goes for the co-manufacturing side of our business. An omnichannel presence gives us a good solid mix and means we are not overly leveraged at any one site,” he states.

GNC’s bankruptcy was not the only issue Nutrabolt faced during the height of the Covid-19 pandemic. Around 65 per cent of the firm’s ingredients are sourced from China, which meant the company had to act quickly in order to ensure it was not left short of materials. Having negotiated this challenge, Nutrabolt was then presented with a precipitous drop-off in sales as a result of lockdowns and gym closures. Thankfully, the firm knew that it could rely on its well-established supply network to help make it through.

“Back in March and April, everything moved so fast, but our strategies and ideas happened even faster,” Brendan says. “We had a mountain of raw materials because we’d made sure we insulated ourselves against a shortage, so it was really about buckling down financially and making some hard decisions internally on how best to weather the storm. A lot of that came back on our co-manufacturers and we worked with them to produce what we could, strategically peeling down those amounts, and cooperating over payment terms and financial obligations. We became very orchestrated, right up to now when the floodgates have reopened and we have started to get back to normal. When times were toughest though, collaboration and partnership helped all of us through it.”

What then is the key to creating vendor and co-manufacturer relationships strong enough to withstand a global pandemic? Brendan deems that, like any relationship, it is important to build upon core pillars of trust, communication and respect.Nutrabolt b

“We really treat our co-manufacturers as an extension of our own company,” he insists. “From the beginning, I go through a very meticulous operational vetting process to make sure they are a viable fit from both an operational need and a business continuity purpose. Some of the questions I ask are tough, but they are the right questions because it sets up something mutually beneficial and protects us and them from a failed relationship. It’s all about building up that trust, respect and communication up front and maintaining it throughout.

“At the end of the day, our product is just a bunch of ingredients formulated into a jar or a can,” Brendan adds. “We are not a manufacturer ourselves, we are a distributor. Whether it be on the co-manufacturing side, on the raw materials end, or even in packaging, without our partners we would not have a product. These partnerships and these relationships are the true magic behind Nutrabolt.”

As Brendan suggests, collaboration is an essential part of how Nutrabolt operates, but the company still has to find a way to keep customers returning for more of its products and this is made possible through the firm’s strong brand ethos. Every product released at Nutrabolt is supported by exhaustive market research and a meticulous stage gate review process. Now available in over 100 countries, the company’s range of drinks and powders has thrived on a global scale thanks to a two-pronged focus on flavor and packaging.

“Firstly, if a product doesn’t consistently taste good, the customer is not going to want to buy it again. We do a lot of R&D work around flavoring and invest a lot of money into that area because we want to have the best tasting products out there,” Brendan claims. “We also spare no expense on packaging. We work with a label supplier that has won awards through our partnership and we were one of the first companies to come out with a chrome-look bottle that many of our competitors have since copied. Strong brand presence like that creates easy recognition and sustained brand loyalty.”

Always looking to evolve, Nutrabolt aims to introduce BlueJay Solutions software and a new ERP system into the business in 2021. The addition of both programs is part of a wider investment into improving the sophistication and formality of operations on the freight and warehousing side of the business. Brendan also hopes that the company can now start building on the many lessons it has learnt in 2020.

“Having adapted to the challenges of a difficult year, we are not just going to rest on our laurels,” he asserts. “We are going to press down on the gas and I am very excited and optimistic that this company can really come out of this virus even stronger.”

The progress Brendan covets will be measured by how much further the company can expand, supported in 2021 by plans for more targeted consumer research and a digital footprint set to shape Nutrabolt’s brand identity.

“We will continue to enable global availability through distribution and key account placement,” Brendan reveals. “Eventually, I can see our beverage business meeting, if not exceeding, our powder business. At present, it is achieving around half the amount of powder sales, but it fits nicely as a niche functional beverage for someone looking for a Red Bull or coffee alternative, as well as those working out and staying active. In that sense, it has double the consumer exposure of our powders and so I can see it eclipsing them within the next three to five years.”

Over the coming months, Brendan and his team will continue to lead Nutrabolt on its unwavering growth trajectory, paying careful attention to the remaining industry uncertainties brought about by Coronavirus – aluminum cans, for example, have been in short supply. Still, Nutrabolt is a company built on people and relationships, and no matter what the year ahead holds in store, the firm knows that it will always be able to rely on its workforce and close supply network.

“A company is really just a collection of people. It is a company’s workforce that really establishes its culture,” Brendan remarks. “We are lucky that there is a lot of self-motivation in our workforce, which has been especially evident throughout this difficult time, and that self-motivation makes Nutrabolt what it is. Every employee here truly embodies the brand. We like the products, we use the products, and we brag about the products. Our people want the business to do well and as a result, we have a company that is full of dedication, passion, determination, and a competitive spirit. These ideals sum up Nutrabolt and they come from the top down, starting with our CEO, and resonating throughout the whole organization.”

Nutrabolt
www.nutrabolt.com
Products: Sports nutrition drinks

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