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Cloetta let PostNord take over its warehouse

Daniel Nyd, Logistics Manager in Scandinavia for Cloetta

Confectionery manufacturer Cloetta's acquisition of its competitor Leaf entailed a logistical challenge. The solution was a joint warehouse that serves the Scandinavian market and is managed by PostNord.

Candy, candy – and even more candy. PostNord's terminal in Helsingborg in southern Sweden is a delectable dream for all confectionery lovers. Cloetta's product range dominates the warehousing space that covers 35,000 square meters in total.

Order picking trucks and reach trucks zoom back and forth. Pallet after pallet of goods from well-known brands are picked from the 11-meter high shelves.

Daniel Nyd, Logistics Manager in Scandinavia for Cloetta, walks around in the warehouse and is pleased by what he sees. He explains that outsourcing the logistics was a sensible idea.

"There are always risks to service and quality when you entrust logistics to another party. But our cooperation has been very effective and has resulted in added value for our customers," he says.

Daniel previously worked at the competitor, Leaf, and before the company was acquired by Cloetta it had started to look at a new logistics solution. At that time Leaf had warehouses in Sweden, Norway and Denmark, and was considering outsourcing all of its logistics. However, this was a major step to take – and it involved significant risks.

"At Leaf we conducted a detailed analysis of our future logistics. There were many issues to decide on. Should we have a warehouse in each country, or one large central warehouse? The first thing we decided on was to centralize the warehouse for all of Scandinavia," explains Daniel.
But should they manage it themselves or dare to take the step to do it via a 3PL player? The latter option was considered, but was far from self-evident.

"It was vital that the change had no adverse impact whatsoever on our customers, in other words, no deterioration in quality and lead times. There is also 'tacit knowledge' in a logistics organization that must be transferred smoothly and easily. By this I mean knowledge about the way in which a specific customer wants us to provide our service – such things are never documented in writing.

But the analysis also highlighted many advantages of a 3PL player. In addition to elimination of the need for investment, there was also much greater flexibility in the solution. In particular, it would make it easier to manage seasonal variations – especially at peak times in the run-up to Christmas, Easter and Halloween.
That's where a 3PL player finds it much easier to adapt staffing levels to cater for our sales fluctuations. We also saw greater transparency in the logistics costs with a 3PL player."

Logistics is a key part of Cloetta's operations, and Daniel Nyd points out that the 3PL player must be attuned to the company's requirements and needs. With a warehousing requirement of on average 38,000 pallets, there is not only a need for large premises but also a logistics organization that must be constantly "on its toes".

"Quality, lead times and service are elements that can always be improved, and we require our partners to work actively in these areas. So far we have enjoyed very good cooperation with PostNord. We are now continuing our improvement work together, focusing above all on shorter lead times."

Cloetta's logistics flow​

1. Delivery of products from the factories in Ljungsbro, Sweden, and Levice, Slovakia. PostNord receives the goods, checks them and places them in the warehouse.​

2. Products are warehoused and will be sold as either full pallets or individual boxes.​
3. Cloetta receives customer orders and sends them electronically to PostNord, including information about the article, quantity, address and date of departure.
4. PostNord processes the customer order and reports back to Cloetta electronically that the order has been processed and is ready for loading.
5. The order is sent to the customer, or the customer collects the goods and distributes them.
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