Government Alcoholic Beverage Control

Government Alcoholic Beverage Control CASE STUDY

Johnson Stephens Consulting (JSC) assisted our client, a State Government Administration, with the selection of a third party logistics (3PL) provider for a public-private partnership for the warehousing and distribution of spirits.  The client had been internally operating the warehousing and distribution delivery operations in a facility in Ankeny, IA (Des Moines metro area).  This operation included the stocking of 2,300 listed products, annual picking of 2 million full cases, 3 million split case bottles, and 1,040 average deliveries per week to 1,500+ Class E licensees across the state.  After JSC completed a lean operations review effort, it was determined that the client could benefit from establishing a public-private partnership with a highly qualified 3PL.  Benefits included ability to implement lean improvements, transitioning the delivery fleet to an external company to mitigate state liability, and providing better ability to retain experienced labor as the client workload/business continues to grow.  This also enables the client to focus more internal resources on regulation and licensing of alcoholic beverages.

Johnson Stephens Consulting provided, as a non-voting member, advisory assistance to the client’s selection committee in the 3PL selection process.  The client utilized a weighted scoring exercise based upon service and cost factors.  From three finalist 3PLs, RUAN was selected as best meeting the needs of the client.   JSC provided final analysis of the RUAN proposal to ensure that the 3PL implementation would realize the proposed service improvements.  The transition was accomplished on-time and on-budget.  The warehouse operations are now able to flex the workforce to workloads better, thus optimizing costs.  Delivery operations were able to implement a more dynamic delivery schedule using an improved routing and transportation management system (TMS) by RUAN, improving both service levels to licensees and reducing costs, while providing the mitigation of state liability.

Following an initial project orientation meeting to review objectives, JSC collected distribution and transportation workloads, growth projections, and descriptive data about receiving, stocking, picking, shipping, and delivery.  JSC conducted interviews with the client’s procurement and management teams to understand what types of pricing structures and risk management arrangement they desired to have with a future 3PL partner to best serve the needs of the client and the citizens of the state.  JSC carefully assessed the 3PL market and developed detailed warehouse and distribution delivery specifications and performance metric criteria for inclusion in the Request for Proposal document.  JSC subject matter experts in warehousing and delivery transportation answered questions for the state of Iowa during the bidding process, and then served as non-voting advisory members to the selection committee as it deliberated.  JSC assisted in the weighted scoring exercise by objectively analyzing proposed service and cost factors contained in each 3PL proposal, which were then provided to the voting committee for consideration.  This provided an “apples to apples” comparison for the committee to use in making their decision.  Finally, JSC provided a comparison of the finalist 3PLs’ capabilities and national experience for committee decision making input.

Project Details

Location: Ankeny, IA

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