In May 2017, the Iowa Alcoholic Beverages Division issued an RFP for transportation and warehouse fulfillment, seeking a partner to serve its customers, reduce risk, build flexibility and scale, and maximize profits. After a thorough evaluation, the agency partnered with Ruan, a leader in the transportation, warehousing and logistics industry based in Des Moines.
The agreement was signed in December 2018, with operations beginning the following April. Ruan now services more than 1,600 private retailers across Iowa and manages 2,300 SKUs. Since the transition began, routes have been adjusted to increase efficiency and productivity, and the IABD is currently tracking analytics to evaluate specific aspects of success resulting from the partnership.
The decision to issue the RFP was the culmination of planning that began in 2012 to improve distribution operations. “We grew to nearly 1,200 distribution points in 2012 and we knew that number was going to continue growing,” says Administrator Stephen Larson. “We had to plan for the future to ensure we could continue providing high-quality service to our customers and meet obligations to the state’s general fund.”
Since the transition to Ruan, both suppliers and retailers have seen improvements. Suppliers were previously assigned receiving appointments under the ABD, but now can choose times that works best for them. Ruan was able to accommodate an unplanned influx of 140 new retailers during the first six months of the partnership, and provides retailers with extra deliveries upon request to ensure adequate inventories for special events and holidays.
“Our core function is governing the alcoholic beverages marketplace in Iowa through licensing, regulation and category management,” Larson says. “This partnership allows us to focus on that, and allows Ruan to do what they do best, which is transportation management and value-added warehousing.”
More than 90% of the ABD warehouse handlers and driers were transitioned to Ruan, and the majority have been retained under the new partnership.
“ABD and Ruan’s public-private partnership was a seamless transition because of the collaboration and thoughtfulness that went into the integration process,” says Marty Wadle, SVP of commercial solutions at Ruan. “We’re now in the continuous improvement phase, which will allow us to drive out waste and improve service.”
The agency anticipates Ruan will bring them suggestions to make deliveries even more efficient and tailored to the needs of retailers. “Ultimately, we think they’ll bring ideas to the table that we just couldn’t achieve when we were handling distribution,” says Business Operations Chief Herb Sutton. “That’s incredibly exciting to us and should be even more exciting to our customers.”