A supplier of sweeteners was facing logistical issues when delivering to their client, a food manufacturer. The food manufacturer had limited on-site storage capacity, and non-regular demand meant that they needed responsive delivery times.
Since the product was a commodity, total capital expenditure had to have a minimum impact in the commercial solution. However, regular storage tanks proved to be expensive and difficult to move.
The solution was to install four customized “food grade” static storage containers, with a flexitank capacity of 29,000 liters, within the client’s facility.
The storage containers were easy to install (full installation on-site within a 2 week timescale) and were flexible, with the ability to be located in more places than storage tanks. Being onsite at the customer’s premises, lead times were reduced to zero.
To absorb the capital investment, the supplier and customer agreed a 6 months contract to absorb the capital investment. The impact on the final margin for the 6 months period was around 2% – a very small outlay given the flexibility and responsiveness gained.
