Supply side: Dan Sanker's logistics experience at Nabisco helped him launch his own business, CaseStack, a shipment-tracking company.

DAN Sanker remembers the simpler times when tracking goods from the warehouse to the store was up to a guy "who knew where every box of cookies was stored or what truck it was on."

No longer so simple, the business of tracking products along what has become the "supply chain" has evolved into logistics, and, Sanker said, "when a company is moving millions of dollars worth of products, one guy won't cut it."

That realization led the 38-year-old Sanker to leave his post managing a $227 million logistics division at Nabisco to form Los Angeles-based CaseStack Inc. in 1999.

Launched at the peak of the dot-com boom, CaseStack's Westside headquarters belie the old economy simplicity of moving goods from one place to another. But without Web-based technologies, the business would not have gotten off the ground.

CaseStack's system, which cost $2.5 million and took five years to develop, allows its customers to fill retail orders, get quotes on storage and trucking, and track shipments. Its users pay a monthly access fee ranging from a few hundred to several thousand dollars, depending on the scope of the license and volume of goods moved.

"We do a lot of collaboration with retailers and manufacturers to reduce full system costs," be said. "It is likely that some retailers will eventually become clients themselves." CaseStack's software calculates whether an order can be consolidated with other truckloads headed to and from the same areas, a savings over the alternative "less-than-truck-load" method. In cases where less-than-truckload shipments can't be avoided, the carriers are optimized for price, routes and retailer access. Orders are sent electronically to the floor of the warehouse and trucking company, and fulfillment details flow back to the CaseStack Web site, where client inventories are updated and products tracked.

Hugh Tait, president of Distribution Services of Atlanta, a warehousing and transportation company that services hundreds of packaged-goods manufacturers, said CaseStack stands out because it pulls together a more complete package than is typical with most outsourcers. "They've made an impact on a relatively mature industry," he said.

After some bumpy first years, CaseStack's revenues tripled in 2003 from a year earlier, to $15.4 million. This year, Sanker expects to break the $20 million mark.

He founded CaseStack (an industry term for the displays at the end of grocery store aisles) just before tech stocks crashed.

"There was a need for (logistics) systems that mid-level companies could afford," he said. "If I had known the Nasdaq was going to crash and that, in turn, would dry up technology investment, I might never have even tried."

In CaseStack's first year, Sanker spent nearly $400,000 of his own money to keep the company afloat. Divorce and the move from a house to an apartment didn't dampen his zeal.

"We had signed a few small clients and the software was getting better every day," he recalled. Still, by July 2000, CaseStack was $500,000 in debt. "I was going to let the staff go and continue alone out of my apartment until the tech market came back," he said.

He was able to secure $500,000 in venture capital from both Blumberg Capital and CNF Ventures, an arm of publicly held logistics firm CNF Inc. But as with much venture capital funding, the money was not cheap.

The VCs stipulated that $600,000 of the money go to an outside Web development company to refine the software rather than let CaseStack's in-house engineers rework it. This left only $400,000 to cover the outstanding bills.

What's more, his stake in the business shrank.

"In practice, as CEO, president and chairman, I make the strategic and tactical business decisions, but I have had to sell my equity over time to raise capital for the company," he said. "I am the largest common shareholder, but since there is preferred stock out there as well, I own substantially less than half the equity now."

The U.S. logistics market exceeds $140 billion, with most manufacturers spending 6 percent to 15 percent of their sales to warehouse, transport and track goods.

Having handled a logistics division at Nabisco and overseen sales and installations of multi-million dollar logistics systems at Deloitte & Touche, Sanker chose to set up shop in L.A. because of its high concentration of mid-sized manufacturers and the two ports that handle 45 percent of packaged goods entering the country.

"By outsourcing their logistics, small- to mid-level manufacturers don't have to buy a software suite that's designed for Fortune 1,000 companies," Sanker said.

CaseStack has built its customer base--and fed the rapid increase in revenues--the old-fashioned way.

A preferred deal with Wal-Mart Stores Inc., came about from a cold-call to its head of logistics, followed by a two-year courtship. Sanker claimed CaseStack brings less-than-truck-load goods into Wal-Mart for the lowest per-pallet price in the industry: roughly $35 versus an average of $70 per pallet.

Sanker conceded that as fuel prices have hit record levels, it becomes more challenging to save customers time and money. "Many firms are adding 10 percent to invoices," he said. "Since it is such an uncontrollable externality, we pass along a surcharge to our customers as well."

And while that surcharge has thrust its revenue figure higher, he said, "These crazy fuel prices put even more pressure on us and our clients to use new ways to reduce costs."

PROFILE CaseStack Inc.

Year Founded: 1999

Core Business: Logistics services to mid-sized companies in the consumer packaged-goods industry

Revenues in 2002: $5.8 million

Revenues in 2003: $15.4 million

Employees in 2002: 35

Employees in 2003: 87

Goal: $70 million in annual sales by 2007; acquisition of third-party warehousers to speed up growth of customer base

Driving Force: To level the playing field with advanced supply chain management so mid-sized, growing companies can compete with larger firms