Oil-Dri Explains How it Adapted to the Hurdles of COVID-19
Oil-Dri is using a sales and operations planning process to stay on track with its five-year growth strategy.
The task of supplying retailers with important items during a pandemic can be daunting, but Oil-Dri Corporation of America says it has the right team to get the job done. When the company saw a strong forward buy of cat litter in the early months of the coronavirus outbreak, it was up to the challenge.
“We were able to work together and adjust to the increased demand,” Chief Operating Officer Molly VandenHeuvel recalls. “For some products, we were supplying our customers 30 percent more inventory than what we typically ship in a month, with very little lead time.”
Finding solutions for customers is a common practice for Chicago-based Oil-Dri, which manufactures high-quality sorbent minerals. The Jaffee family started the company in 1941 and it became the first to launch lightweight cat litter. “We created that market and hold patents for lightweight litter,” VandenHeuvel says. “The category is growing and demand for our lightweight litter products is booming. ”
Today, Oil-Dri serves clients in the pet care, animal health and nutrition, fluids purification, agricultural carrier, sports and industrial markets. The company focuses on profitable growth and continues to look for ways to stay ahead of its competition.
For example, when Oil-Dri discovered that its animal health products could be used as natural alternatives to antibiotic growth promoters in livestock animals, it leaped at the opportunity to introduce a new offering. Today, “[we have] a product that reduces the level of pathogenic challenge, strengthens the intestinal barrier and safely stimulates immunity,” VandenHeuvel says. “Research shows that our product provides growth and performance outcomes that are consistent with those achieved with commonly used antibiotics.”
Ready to Grow
Oil-Dri recently developed a five-year growth strategy and is currently using a sales and operations planning process to keep the company on track. “Each division has developed value propositions and comparisons to competition to develop a plan moving forward to profitably grow our business,” VandenHeuvel says.
Her own supply chain and operations team is focused on driving results in service, cost and cash. So far, “We have improved our customer service level results to a point where we have been able to make significant improvements in cost reduction,” she reports.
The team has managed this with many system improvements, including the use of total teammate engagement and other base systems that allow for more effective and efficient production processes. “Change management is best implemented when balancing people, processes and technology,” VandenHeuvel says.
Oil-Dri also recently implemented JD Edwards EnterpriseOne, a cloud-based enterprise resource planning (ERP) system. Although the company encountered some challenges in the process, “Everyone rallied to find and fix the problems,” VandenHeuvel recalls. “We are not only running smoothly again, but learning to leverage the ERP system for better information and decisions.”
Passing the Test
The COVID-19 pandemic put Oil-Dri’s new systems and processes to the test. However, “I think we passed with flying colors so far,” VandenHeuvel reports.
When the crisis was declared a national emergency, Oil-Dri implemented stringent sanitation and safety measures, transitioned to a remote environment where appropriate and temporarily increased compensation to front-line workers. The company also implemented conscious communication plans so that employees could manage the challenge of working remotely. It increased regular communication with core teams via remote video conferencing to ensure information flowed freely. Some of these changes will remain in place even after the crisis subsides.
The company also reviewed its supplier list and determined which of its vendors would be the most at risk. “We were often the first customer to call them and work on contingency plans, which allowed us to prevent shortages due to material supply issues early on,” VandenHeuvel says.
Oil-Dri also has utilized more technologies to provide uninterrupted service. For example, “We are starting to make sales calls with customers via Zoom,” VandenHeuvel describes. “We’ve spent a lot of time training our teammates on Zoom features to ensure successful information sharing and it seems to be working so far.”
The company also used upstream thinking to talk through scenarios and plan how it would address them. For example, “We discussed ways to prevent the spread of COVID-19 within Oil-Dri and benchmarked against other companies to develop best practices while following CDC guidelines, ” she recalls.
Leveraging Its Strengths
According to VandenHeuvel, Oil-Dri is poised for success in the future. Last year, the company delivered net sales of $277 million and has demonstrated growth within the first six months of this fiscal year.
“We will continue to leverage our strengths — the value of our products, people and systems,” she says. “We are planning for the biggest growth to come from cat litter and animal health and nutrition products.
“We offer the best price/performance combination of litter on the market, and retailers are taking note and increasing distribution,” VandenHeuvel concludes.