What's in a Jug?
Posted on July 29th, 2014

Lee Container Recognized for Innovativeness and Partnership

By Kevin Gesse
July 22, 2014

A supplier relationship management success story
Thinking big picture: What’s in 50 million jugs? This is the number of jugs Syngenta has purchased from supplier, Lee Container, over the last six years.

Presenting Lee Container with a Syngenta Quality Award
This past May, I had the opportunity to travel with our Quality team to Centerville, Iowa, to one of Lee Container’s manufacturing facilities to present Lee with their sixth Syngenta “Partner’s in Quality Award.” Prior to my visit, I thought bottles were a simple commodity, and I shouldn’t expect to see much in terms of technology or customer service from Lee. Although the jug industry is highly commoditized, North American Direct Procurement implemented Supplier Relationship Management (SRM) activities with Lee six years ago because they were identified as a supplier that had a high impact on profit. I left Centerville impressed with what I saw and the results of SRM with Lee.

This story actually begins several years ago when Dave Steinert, packaging buyer, Direct Procurement, North America, was conducting SRM meetings with Lee to figure out how they could improve on delivery to our Formulation & Packing operations in the Midwest. Lee had operations throughout the Southeast but wasn’t positioned geographically to service the Midwest. When shipping finished bottles, air becomes a cost factor, as you end up paying a lot on freight to essentially move air around. Therefore, even though Lee was a competitive bottle supplier, the additional freight to deliver to the Midwest was increasing Syngenta’s costs and lead time. Lee decided to invest in our growth by acquiring a former Rubbermaid plant in Centerville, Iowa. Centerville is a small farming community in the Southeast corner of Iowa where Rubbermaid recently had closed its doors, having a significant impact on the town. It was a welcome sight for Centerville’s residents to see Lee acquire the plant.

The acquisition was a success for Lee, and they saw their operations grow from four manufacturing lines to 12. However, we were looking for more from Lee. Not only did we expect competitive pricing in order to deliver on our strategy of more sales with the same or lower cost base, we expected increased flexibility and responsiveness to help us manage our inventory. Once again, Lee agreed to meet our needs and provided warehouse space, so they could pre-produce our bottles and jugs and store them. This ensured containers could be delivered to our plants at a moment’s notice. As a former product manager at Syngenta for atrazine, I was well aware of the advantage this provided and was able to leverage it several times in order to win sales. Thanks to our SRM activities with Lee, Syngenta’s lead time on packaged atrazine now was unrivaled in the industry.

As part of the Accelerate Operational Leverage (AOL) initiative, Direct Procurement has been seeking ways to safely take resin out of our bottles to deliver a lower-cost option. Resin is the main raw material in plastic bottles and less resin equals a lower cost per unit. Through the SRM program, Lee was aware of this work and approached us with an idea to remove the bottle resin. Lee once again showed they were willing to invest in Syngenta initiatives by offering to purchase a new mold, so we could test the concept with our fill and pack facilities. Ultimately, Lee’s growth has allowed them to purchase resin at lower prices, and they have passed their savings on to Syngenta.

Going back to my visit this past May, what struck me most was one of the first things I saw when I walked into Lee’s facility: a large Syngenta Quality sign hanging on the wall. Upon inquiry, I learned that the sign had been hanging in the same spot for years, put up after Lee’s 1st Syngenta Quality Award. In fact, the sign had helped Lee grow their business with other customers, as these customers believed that if Syngenta was willing to work with Lee, then they must be delivering on quality.

This trip confirmed for me, that when correctly applied, SRM allows our suppliers to view Syngenta in a way that encourages them to help us achieve our strategic ambitions and objectives.

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