Interview Published January 19, 2004|
Dan Sanker, CaseStack
Dan Sanker is Founder and CEO of CaseStack. CaseStack has been recognized several times for being one of the fastest growing companies in America. I spoke with Dan to get an idea on what CaseStack does and why it has been successful.
BK: What is CaseStack's business, and can you tell me a bit about your logistics outsourcing services?
DS: We are a logistics outsourcing company, which means that we manage our clients' supply chains - that's all transportation, warehousing and related technology. We focus primarily on consumer packaged goods (CPG) companies. They focus their efforts on their important core competencies, and leave logistics management to us. For example, they'll manufacture their products - then, we'll pick those up (truckload or rail) deliver them to our network of six warehouses (LA, Portland, Dallas, Chicago, Atlanta & NJ). When orders come in from their customers (eg Wal-Mart, Kroger, Safeway, CVS, Costco, etc.), our systems decide how best to deliver the goods. They then tap into our systems as a "command & control" center where they can run reports to make better decisions. For example, they can tap into five years of historical shipping data to plan for the future. Clients use this to better predict future demand, so they can manufacture the right amount to meet future orders (production planning), or so they can load the warehouses with the right amount of product. This reduces out of stocks (lost sales) and reduces inventory carrying costs.
Clients use the systems to get instant access to inventory levels all across the country. They have instant visibility to shipping and delivery information, instant access to sales trends by SKU and region, instant access to delivery appointment times, shipment history and shipping patterns, and the ability to better determine their overall profitability by customer - including all shipping costs.
Many of our customers have leveraged the CaseStack network to enable them to enter the US market or to become national. This has become increasingly important as retailers have consolidated and become more national.
BK: Who are your typical customers, and how are they using CaseStack?
DS: Our typical clients are mid-sized (<$1BB), growing, consumer packaged goods companies. We all buy their products every day at Target, Wal-Mart, Costco, Safeway, Rite-Aid, or Kroger.
BK: What is your background, and how did you decide to start CaseStack?
DS: My experiences are what made me realize the need for the CaseStack service concept. I was at Procter & Gamble, then managed a division at Nabisco, then at Deloitte as a Managing Director in Supply Chain. And, finally when I had a food company of my own. I realized that mid-sized companies had an increasingly difficult time managing logistics. I saw companies investing millions on logistics modules of ERP systems. The systems are big, expensive, cumbersome, and difficult to implement. With the internet as a network, I realized that this software could be delivered more effectively through an ASP, as opposed to a client-server based solution.
BK: Having worked at several large companies, how has it compared with running your own company? Are there things you wish you'd had experience with before launching on your own, and conversely have there been things you learned working for the bigger companies that helped prepare you for your entrepreneurial experience with CaseStack?
DS: Large companies often lose their entrepreneurial spirit, and that can be very frustrating for employees. By the same token, smaller companies often lack resources and professionalism. My experiences with larger companies have given me the benchmark for professionalism. CaseStack is only small because we aren't big yet. We are getting there fast. Although we don't have the resource base of a Procter & Gamble or Nabisco, we still need to have the same level of professionalism and integrity. In addition, we benefit from having an entrepreneurial spirit that multi-billion dollar companies don't usually have.
I've never wished I had more big company experiences. The biggest challenges when you start out - you don't have the resources that you are accustomed to, and you aren't be recognized in the marketplace. We made up for those obstacles with an extra dose of creative problem-solving and a lot of determination to give clients better solutions. More experience couldn't have been a substitute for hard work, persistence, and ingenuity.
BK: Your company has been honored multiple times as one of the fastest growing companies in America by Entrepreneur Magazine, Inc., and others. What would you attribute your success in growth to?
DS: We are firm believers in the concept of collaboration as a tool to reduce costs and build sales. We don't just work with our vendors and our customers - we also work closely with our clients' customers. For example, we work closely with Wal-Mart to make our clients into better Wal-Mart vendors. In one program, Wal-Mart electronically sends us multi-vendor orders (orders for products from 3-10 different manufacturers that come over in an exact truckload quantity). As a result, Wal-Mart can receive one Full truck instead of many less-than-truckloads (LTLs). This reduces shipping costs for each of our clients, and it makes Wal-Mart happy - they can order smaller quantities per order, and they can allieviate dock congestion at their distribution centers. Programs like this make our clients better vendors at the retailers. As such, retailers will prefer to do business with our clients. Collaboration means that we are a way for our clients to reduce costs, but also build business.
We also have very sophisticated software technology that assures more consolidation and lower costs. For example, we have a series of optimizers that each and every transportation or warehouse action feed through to determine the least-cost, highest service alternative.
BK: Finally, what's CaseStack's biggest challenge and goal for the next year?
DS: Our goal for next year is to double the size of this company. We have a great team here, and I want everyone to have the chance to contribute beyond their wildest expectations. If everyone gets that chance, there is no reason that we won't far exceed our corporate goals.
Copyright (c) 2004 by Benjamin F. Kuo. All rights reserved.
May not be reprinted without permission.