Improving an SMB Offering: Increasing Total Addressable Market

The Problem:

A globally recognized manufacturer produces a group of products for the baking industry.  The product is packed-out in 8-pound boxes, yet the minimum order quantity was 2,000 pounds and customer lead times were 4-6 weeks.  Manufacturing facility operations were focused on handling the needs of their large, strategic customers, and our client didn’t have the capacity to make changes, but recognized that the current offering was far out of line with the needs of most small to mid sized bakeries, leading to overall year over year declines.

The Solution:

Xenon arc stepped in with the Xa-DIRECT solution and changed the dynamic.  The producer transitioned 150 customers, and over 2500 orders.  Xenon arc created a dedicated team of 5 industry experts, including a food technologist to support customers. To help simplify facility operations, Xenon arc supplies our client with long range purchases plans.  Furthermore, Xenon arc purchases product in truck load quantities and over time, has built an inventory position.   

The Benefits:

For the small-to-mid-sized business customers, their service levels improved dramatically.  By putting in place a customer-centric inventory strategy, and dedicated business team, Xenon arc was able to reduce customer-facing MOQs to as low as 2 pounds and improve lead time to a 24-hour turnaround. This change has meaningfully changed the efficiency of manufacturing and the growth trajectory of the business – leading to consistent year over year growth.  

In the end, by reducing complexity and facilitating better resource planning, our client was able to meaningfully reduce costs while, more importantly, expanding the total addressable market for their products and improving service levels to all constituents.