Odyssey and Henkel

A Value Added Partnership

Competing in today’s global consumer goods marketplace necessitates an efficient, visible and well-disciplined supply chain. Strategic vendor relations and expertise are paramount; specifically on specialized services such as bulk chemical transportation. Engaging Odyssey Logistics & Technology, a skillful and experienced 3PL, has delivered measurable results as well as professional sourcing with safety and quality processes.

The following is an example of how Odyssey’s innovations and experience have added value to the Henkel liquid bulk supply chain within North America.

The Customer
Henkel has many globally recognized household brands that have long-enjoyed a robust reputation in the consumer products and personal-care industry. With U.S. Headquarters in Scottsdale, Arizona, Henkel has an established US network of regional manufacturing and distribution facilities.

The Odyssey Subsidiary
Odyssey Overland, a subsidiary of Odyssey Logistics & Technology (Odyssey), is a leading 3PL established in 1983 whose core competency is in providing cost effective, innovative and quality oriented supply chain logistics in the area of liquid bulk tank transportation.

 The Challenges

  1. Control of the Freight Component on Delivered Price Materials
    While it is easier to purchase raw materials on a delivered price contract; managing the process typically benefits the buyer through a freight savings of 10-20% depending on the length of haul.
  2. Excessive waste and disposal costs
    One of the raw materials Odyssey handles for Henkel is a highly concentrated liquid known as surfactant, a component of their anti-bacterial soaps. Surfactant is shipped in its raw form using tanker trucks from multiple manufacturing points to various production facilities. When the surfactant is not handled properly, a residual known as a “heel,” remains in the tank after unloading. Due to the high viscosity of this material, the heel must be removed using hand labor. The tank must then be thoroughly cleaned and sanitized before it can be placed back in service. Prior to Odyssey contracting the business, the carriers involved had to travel long distances to tank wash facilities able and willing to appropriately manage the heel removal process. The time and costs associated with using these remote facilities were elevated due to the transportation costs on top of the already excessive cleaning costs.
  3. Surges in logistics needs to support co-packing*
    As do most consumer goods companies, Henkel often launches marketing and overflow campaigns that include co-packaging sites and mass shipping of various-size product samples. These campaigns require special production runs that need to be coordinated with the supply chain partners that include: co-packer, carrier(s) and cleaning facilities. *Co-packing typically occurs when production plants are in an over- capacity situation to meet market demands.

The Solutions

Lane Analysis of all Delivered Price Material Contracts
Odyssey offered an analysis that demonstrated freight savings and scheduling control on most of Henkel’s bulk tank delivered materials from outside vendors.

Pitched Trailer During Off Loading
To deliver the surfactants devoid of increased line haul costs, Odyssey improved the offloading process by utilizing a yard truck with a lift mechanism to tilt the tank trailers. This innovation significantly reduces the amount of residual heel and the time spent in unloading.

Optimizing tank washing and disposal
Odyssey’s tank cleaning knowledge and implementation of best practices on waste removal, along with collaborative data from an extensive client network, resulted in the optimization of Henkel’s tank washes and heel disposal. In essence, Odyssey set up a network of tank wash facilities in close proximity to Henkel’s production locations. And when markets allowed, Odyssey set up a buyer for any residual heel not used by Henkel. This of course reduced waste disposal costs.

Co-packing logistics management
Since co-packing is a surge operation and separately contracted, all logistics regarding the co-packing are managed by Odyssey. Through Odyssey’s web portal, a real-time schedule is visible to all participants in the supply chain and production can be planned accordingly.

Shared Processes and Best Practices
Odyssey’s management of the complete lifecycle relationship with carriers – from the approval process, rate negotiation, procurement, compliance/monitoring, to freight audit and pay – results in a focused and strategic alignment with this segment of Henkel’s supply chain activity.

Years of solution deployments and diverse client interactions have given Odyssey the practical experience to develop a succinct and comprehensive Standard Operating Procedure (SOP) in conjunction with Henkel, for all contracted carriers. The SOP provides a process map for all vendors, specifying various elements of their operations, ensuring that they remain in compliance with industry regulations and quality controls. Without such detail, a carrier may initiate product contamination and significant delays. The SOP specifies other requirements such as prior commodity restrictions and minimum standards for cleaning which includes maximum timeline limits to loading appointment times. Odyssey also put in place carrier qualification criteria, weather alerts, carrier disciplinary procedures, and documentation processes. Most importantly, Odyssey has a heightened focus on transportation safety. This is a vital point, considering newly imposed regulatory standards on the tank truck industry that vary by state throughout supply chain routes.

The results
Odyssey’s negotiations with each participant in the delivery process resulted in reduced line haul costs and product waste, with time and costs saved in heel removal and disposal: The use of the pitched trailer in offloading and the established tank wash network resulted in a substantial reduction of residual heel with a 60% reduction in related costs. By handling the logistics associated with the surges in demand from overflow activity, Odyssey facilitates control of the irregular and fast paced co-packing logistics operations, alleviating Henkel from managing its intricacies. Additionally, as a result of the diligence outlined in the SOP, Henkel has decreased overall product loss and scheduling delays.