Transportation management can be very complex. Having an expert partner to manage transportation and logistics allows manufacturers to focus on products, customers, and core aspects of their businesses. Daikin is the world's top manufacturer of heating, ventilation, and air conditioning (HVAC) systems. Their units can be found in the world's largest buildings. As it did for many companies, the COVID era upended business-as-usual for Daikin.
"The past several years in particular have been some of the most difficult in the last 30 or 40 years in these markets," said Ed Blackford, vice president of logistics for Daikin Applied Americas. "We didn't have the cooperation and the collaboration that we needed to navigate this market, which changes regularly. We wanted a business partner that understands what's important to us and tells us what we need to do."
For Daikin, that ideal partner is Ruan.
"Ruan creates custom logistics solutions to help our customers manage their supply chains," said Paul Jensen, Ruan's senior vice president of Supply Chain Solutions. "We have four primary capabilities— Dedicated Contract Transportation, Value-added Warehousing, Managed Transportation, and Brokerage Support Services."
Ruan now manages the transportation of inbound raw materials to Daikin's factories in Minnesota, Ohio, Virginia, Arizona, and Mexico and outbound loads of HVAC finished goods to construction sites around the continent. Working with Ruan provides Daikin better end-to-end visibility into the entire shipping experience.
"We can clearly communicate to the customer what is going to happen with respect to our on-time delivery, proper securement, and damage-free transit, and we have confidence that the customer received the goods in the same condition they were in when they left our factory," Blackford said.
As with every good partnership, Daikin and Ruan soon discovered other opportunities for efficiency and savings. "Daikin has done a really good job in challenging Ruan with innovation,"said Brett Schlegel, Ruan's vice president of operations for Managed Transportation. "It's more than just moving freight. How do we add value that creates a [better] long-term customer experience and improves overall solutions for Daikin—not just transportation, but their overall business?"
PARTNERS IN INNOVATION To improve service and assure capacity, Ruan added a dedicated fleet of 26 trucks manned by Ruan drivers. The solution uses Conestoga trailers with fabric roofs that peel back to allow for easy loading while protecting the HVAC units during transport. The fabric is branded prominently with Daikin's logo for quick recognition when the trucks pull up to job sites. As Ruan's understanding of Daikin's business grew, the dedicated logistics provider realized an opportunity to better consolidate freight to achieve economic savings and supply chain efficiency. Ruan conducted an optimization study and recommended three- to five-day consolidation periods, but Daikin lacked space to stage HVAC units until they could be consolidated.
"Daikin saw the transportation ROI and invested in the yard space at every facility so that they're able to hold product for up to five days. This allows our transportation planning team to optimize their freight to make the best loads. It's created better visibility and a better customer experience for Daikin," Schlegel said.
"We're thrilled with the initial results," said Blackford. "We've had basically no damage in transit. The brand name recognition when we arrive at the job site has been terrific. The drivers get to know us and they get to know our customers, and that has been critically important as we expect to deliver an unrivaled customer experience. Daikin is already the world's largest HVAC supplier, but to become number one in North America, we need to partner with other number one firms—and Ruan is that number one for us."
Situated at the crossroads of the Choctaw Nation in Durant, Oklahoma, Big Lots' 1.2 million square foot distribution center serves 235 stores within a network of more than 1,300 stores across 48 states. Big Lots is a large national discount retailer, providing everything from furniture to food, as well as household goods and seasonal décor.
The Durant facility serves stores in parts of 16 states, stretching from the Canadian to Mexican borders. Such a vast area makes it difficult to find reliable transportation. For years, Big Lots utilized multiple carriers, but the complexity as the chain grew resulted in products not being delivered to stores on time. This complicated retail operations, as products often were not available to sell in a timely manner.
"We have a long average distance to our stores, which made it very difficult to hit the appointment times consistently that our stores expect," explains Kory Shinlever, director of domestic transportation at Big Lots. "We also had issues with DC productivity we needed to solve because we had a lot of transportation partners supporting that store delivery. It made our trailer pool very complex."
Big Lots needed a partner who could replace that complex mix of transportation providers with one dedicated fleet. They found that partner in Ruan.
"The services we provide Big Lots out of the Durant facility are dedicated contract transportation, yard services, as well as brokerage services during times of surge or other nuances that they have within their network to support," says Jeremy Carmichael, vice president of operations at Ruan. "Our partnership with Big Lots is one of a similar culture. Being people-first and people-oriented, we believe in enduring partnerships. We believe that shared culture fosters a long-term relationship."
Big Lots has improved service dramatically since moving its store deliveries to Ruan. Trailers are always available at the Durant DC, something that was a problem before and slowed down distribution operations.
"It's a great partnership from senior management down to the local management here," says Edwin Boothe, Big Lots' director of distribution at the Durant DC. "Drivers are courteous, professional, and they do a good job with the store personnel. On-time percentage has been great. Service levels have improved since we've been with Ruan."
"The working relationship is amazing," adds Holly Valcik, Ruan's dedicated transportation manager who works onsite in Durant. "The team here at Big Lots has been amazing and very supportive. Anytime I have any questions or needs, they are there to support me."
"Our stores from the Durant distribution center now are serviced at the highest level they ever have been at this point," notes Shinlever. "That makes a huge difference to the stores because they're able to improve their productivity. The stores don't have associates waiting for the truck. And because of that, they're more efficient at the unload. They've improved not only their productivity, but they decreased their total detention costs."
He adds that productivity at the Durant DC has also improved since Ruan right sized the trailer pool with units now always available at the 40 outbound doors. Warehouse associates can finish their picking and not have products stacking up at the docks, as trailers can be loaded on time.
Shinlever says that with Ruan, they found a long-term partner. "We wanted a partner who would be able to solve solutions at scale, who could grow with us and also matched our own company culture - one of being able to succeed together and playing to win," he shares.
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