Forward-thinking company brings efficiency to supply chain, energy to community

ADVERTORIAL — If you asked Dan Sanker 10 years ago where he would raise his two sons, Northwest Arkansas wasn’t high on his list. In fact, it wasn’t listed at all.

“After 20 years in New York and 20 years in L.A., my wife and I never considered Arkansas,” he said. “It’s not that we ever ruled it out. It just never even came up.”

But with a house in Goshen, a growing business in Fayetteville, and 5-year-old Jon and 6-year-old Julian playing T-ball on an area team, he’s excited to call the region home. The president and CEO of CaseStack, a leading warehousing and transportation company, and co-founder of the Green Valley Initiative has a simple explanation for his family’s 2007 move from Santa Monica, Calif. It’s about business, but it’s also personal— his boys need to live and learn where the new, sustainable economy is cultivated and Northwest Arkansas is where it’s happening, he said.

“Revolutionizing business to be more efficient is a moral imperative. It’s about my kids living in a world with opportunity, not scarcity,” he said. “CaseStack came here because this is where the world is going to find the experts. This is where business turns for answers.”

Finding and serving a niche

Admittedly, Sanker didn’t always see the connection between ‘green’ and corporate governance, but he did see the importance of reducing waste. That concept, coupled with a need for a new supply chain solution, is where Sanker got the idea for CaseStack just more than 10 years ago.

Sanker’s bi-coastal résumé reflects finance, consumer products and supply chain experience at various companies including KPMG, Procter & Gamble and Nabisco. In the late 1990s, his latest position as managing director for finance and supply chain management at Deloitte filled his day with research and recommendations on how to streamline the transportation and warehousing of goods in a way that reduced the amount of duplicated work, decreased the cost to store and ship goods and increased the efficiency of the entire process.

Traditionally, it was larger consumer products companies who contracted with Deloitte to find answers to these problems, making the larger competitors more competitive and the small to mid-sized businesses increasingly less successful.

“Ten or 15 years ago, the disparity between the resources available to the Coca-Colas and the Hansen’s of the world was tremendous,” Sanker said. “It was all based on an old model of doing business.”

Under the old process, suppliers hired a trucking company to drive their goods from the manufacturer to a warehouse. Then another carrier shipped the product from the warehouse to the retailer. No one spoke to anyone after their portion of the chain was completed, and each link on the supply chain increased the cost of shipping. Since the orders weren’t large enough to fill up a whole truck and were sent one by one, suppliers paid for a full truckload when their loads took up a fraction of that space.

Sanker’s idea; however, was to use technology to bridge the gap between the supplier, the carrier, the warehouse and the retailer. Instead of each entity operating independently, they would use the same system to submit orders, fulfill them and ship them. If the retailer was talking to the carrier who was talking to the warehouse using the exact same system, the entire process would be faster, smoother and therefore, save more money, Sanker said.

“Think of it as going from a dashed line to a pie cut into pieces,” Sanker said. “Instead of plugging the holes between each point on the line with more costs, each piece is part of the larger pie, working toward lowering costs for everyone. With the shipper, the warehouse, the retailer and the supplier working together, everything goes faster.”

Time wasn’t the only thing saved. Today, CaseStack’s customers recover between 20 percent and 60 percent of their transportation costs when compared to the traditional method. And with logistics taking up as much as 6.9 percent of consumer product company sales, according to the Grocery Manufacturers Association, the small supplier can truly compete with large competitors, Sanker said.

“CaseStack is built on the idea of collaboration. When everyone is talking to each other, when everyone is working together, everyone wins,” Sanker said.

Recognizing the new ‘normal’

Since its incorporation in 2000, CaseStack has relied on the concept of collaboration to create partnerships that translate into less expensive shipping. With more than 400 carrier-partners, CaseStack offers significantly reduced shipping rates to its customers and guaranteed business to the shipping companies with which it works. Its partnerships with warehousing providers fill their warehouses and create an expansive North American logistics network for CaseStack.

Those partnerships have translated into 2,000 CaseStack customers shipping thousands of pounds of product daily. But it was CaseStack’s most recent partnerships with retailers like Walmart Stores, Inc. that created the greatest sense of collaboration and represent the largest potential for savings.

“Retailers are constantly looking for ways to reduce their costs so that they can reduce shelf price,” Sanker said. “Transportation costs are the number one contributor to shelf price, so we figured if there were a way to cut down on costs on the back end, consumers could see it on the front end.”

Hence the Retailer Consolidation program. With both a One Warehouse and a Five Warehouse model, the program combines individual less-than-truckload orders onto full truckloads. Instead of paying for full truckloads of goods when the product takes up only a percentage of the space, CaseStack consolidation suppliers only pay for their portion of the truck.

First, the retailer submits a ‘master purchase order’ to CaseStack listing several suppliers’ products. Those products are all housed in the same warehouse, allowing CaseStack to consolidate each individual order and send a full truckload to the retailer. CaseStack’s customers save on transportation, decrease their damages by about 50 percent and improve their on-time performance by as much as 20 percent. The savings allows suppliers to reduce their unit price and solidify their relationship with increasingly efficiency-minded retailers. The retailers in turn can keep smaller inventories, free up congested dock doors and order products with less lead time, Sanker said.

The consolidation program began in Dallas in 2003, and in January, added a second location in Chicago, Sanker said.

“This is the new way of doing business. It’s the new normal,” he said. “Facilitating savings with cooperative programs is the key to growth. As long as we continue to improve service and save money for our customers, CaseStack will thrive.”

Making a move

The partnership between CaseStack and Walmart helped solidify Sanker’s decision to open an office in Northwest Arkansas in 2007. After listening to the now famous October 2005 speech by Lee Scott on the future of sustainability and business, Sanker realized it was Northwest Arkansas that would set the tone for the new economy.

“The largest proponent of sustainability on the planet is here. The largest concentration of consumer product companies and the largest pool of agriculture, energy and plant science experts are here,” Sanker said. “It was a no-brainer that CaseStack had to be a part of it.”

Shortly after moving CaseStack to Fayetteville, Sanker co-founded the Green Valley Initiative with Steve Rust, the president of the initiative’s economic development branch. In just more than two years, the pair has brought increased attention to the region by the international business and research communities, with a number of companies in discussions to move or open secondary offices in Arkansas.

“The goal is to have 100 CaseStacks here, pushing the envelope of efficiency-based technology. It’s that expertise that will be the most valuable skill in this economy,” Sanker said.

Since Green Valley’s success, Sanker and CaseStack have received numerous recognitions for sustainability through various awards and both local and national media attention. Sanker said it wasn’t his intention for CaseStack to become a poster child for incorporating sustainability technology into business. But the coincidental progression from starting a company founded on the concept of supply chain efficiency and then becoming one of the most well-known advocates of sustainability in the state is not lost on him.

“I don’t consider myself a trend-setter, and I certainly didn’t have any master plan to put CaseStack at the center of sustainability,” he said.

“But sustainability is about doing the most with the least and not sacrificing quality. That’s what CaseStack does. We look at the whole picture and serve the supply chain so the supply chain can serve the consumer. If that lands me and my family in a place where we’re surrounded by the best and the brightest, then we and CaseStack are the better for it.”