How to Create an Optimal Supply Chain

Sun Products’ Anthony Lannon shares seven tips for remaining competitive without diversification

1. Optimize distribution costs

When the Sun Products Corporation was formed in 2008, through the combination of Unilever’s North American laundry-care business and Huish Detergent Inc. by Vestar Capital Partners, Anthony Lannon was tasked with building a Canadian distribution network for the company that would include well-known brands like Snuggle, Surf, and Sunlight.

Originally from the United Kingdom, Lannon started his career at GlaxoSmithKline. In 2003, he moved to Canada, seeking adventure and a new way of life. He worked in product innovation and supply chain and logistics for Unilever before taking over as director of supply chain and logistics for Sun Products Canada.

Now, seven years later, Lannon is transitioning the company to a hybrid freight-management model. The new model leverages operational resources and third-party technology such as LeanLogistics, while Sun retains direct relationships with carriers. This enables freight optimization and eliminates third-party logistics margins while creating competition between carriers and securing freight capacity.

“That’s really going to give us excellent visibility to what’s actually happening in our business,” says Lannon, who today serves as the director of supply chain and logistics. “It’s also going to give us the capability to optimize how our shipments are built and how we get products to customers.”

2. Maximize vendor relationships

Lannon advocates for building partnerships with vendors instead of relying on transactional relationships. It’s important, he notes, to ensure the company’s objectives align with its vendors, offering opportunities for both parties to be successful. Lannon also sets expectations from the onset, measures performance of both Sun Products and its vendors on a quarterly basis, and puts corrective action plans in place as needed.

“Communication is really vital, especially when things don’t go according to plan,” he says. “It’s too easy to knee-jerk and react when things don’t go great.”

3. Focus on customer service

Customer service is paramount—especially for a manufacturer that focuses on two categories: laundry and dish-care products. “We don’t have the diversification to borrow from one brand and use that to prop up another,” Lannon says. “It’s really important that we have an outstanding level of customer service as a competitive advantage.”

When retailers want to give one of Sun Products’ brands a large promotion or drive volume, the company works to execute it to the highest degree. That means consistently delivering products on time, in full.

4. Take advantage of different channels

Sun Products has partnerships with a number of large Canadian retailers as the manufacturer of their private-label-laundry and dish-care products. “In Canada, our private-label business is less developed than it is in the US,” Lannon says, “but we have been successful in growing it over the past few years.”

5. Innovate, innovate, innovate

Innovation is the lifeblood of the laundry and dish-care business and is key to growing without diversifying into different product lines, Lannon says. Sun Products works continuously on developing and extending its product lines in laundry and dish detergent. That translates to private-label brands as well, since retailers want to keep on trend from an innovation perspective.

6. Increase speed to market

Lannon, who works on new product launches, works to remove barriers and expedite processes in everything from research and development to packaging, in order to get new products on shelves faster.

“We’ve worked really, really hard in reducing our speed to market times,” he says. “That’s not something that we can only do in Canada; we need to enlist the rest of the organization in the US to do that with us because we’re part of a bigger machine.”

7. Tackle challenges head-on

Sun Products Canada, like other Canadian companies with manufacturing in the US, is currently challenged by the strength of the US dollar compared to the Canadian dollar, because the company’s products are all manufactured in the United States.

“We’re looking at opportunities to work with local Canadian manufacturers to mitigate the foreign-exchange impact, which has a real impact on the bottom line,” Lannon says.

According to Lannon, it’s a difficult balance—because even if the company can save on freight costs and the exchange rate by using local manufacturers, it’s usually smaller than larger US manufacturers that have more competitive cost structures.