World Trade - October 2008 - (Page 38)

SUPPLY CHAIN SURVIVAL GUIDE Robert Gahagen, managing director of operations for Latin America at Menlo Worldwide Logistics. “Things don’t change overnight,” he says. Third-party resources In a similar vein, though, Steve Bullard, director of logistics services for Pilot Freight Services, says more companies are performing ﬁnal assembly in the U.S. from sub-components manufactured overseas. One, an international MRI manufacturer, works with about 34 suppliers and keeps their parts in a warehouse near its U.S. factory. This provides the beneﬁt of inventory reduction without affecting availability, because the shippers maintain ownership of the components until they actually are needed. In that situation, the MRI manufac- in the U.S. It exchanged air shipping on a per order basis with ocean transit and full container loads stored in local warehouses. Shipwire, an e-commerce order fulﬁllment company, offers a similar service in the U.S., Canada and UK. “Companies send us inventory and we help move it globally, shipping it from the nearest warehouse to the buyer,” explains Nick Gilmore, VP Marketing. This “store, sell, ship” model, he says, helps small companies compete globally with a level of shipping comparable to that of their largest competitors. That allowed one U.S. wind turbine company, RE Trade, to offer two-day delivery to its UK customers for the price of local ground transport. Another option is “merge in transit” or “merge and delivery” services. Pilot Freight Services can holds components at Pilot’s facilities until an end customer’s “We help companies move inventory globally, shipping it from the nearest warehouse to the buyer. This store, sell, ship model helps small companies compete globally with their largest competitor.” — Nick Gilmore, Shipwire Shipwire turer has complete visibility to the entire warehouse, but individual shippers can only access information about their own goods. For this instance, Pilot created a thirdparty mixed-use warehouse that handles about $10 million in inventory annually. Such shared warehousing is most common among suppliers to a particular company in mature industries with mature product lines, and almost never among competitors. Although suppliers get paid later, it does help them transport more of their inventory by lower-cost carriers, saving more expensive modes for the last miles. Using carriers’ resources is a good way to optimize the supply chain—that approach is driven by retailers that are converting their own storage space to shelf space, pushing the storage burden, oftentimes, onto the vendors. Crowley, for example, offers pick and pack services for its apparel customers, as well as quality control, retagging, re-labeling and cargo segregation for shipping. “We’ve been doing this about ten years,” Carlos Rice, general manager, says. “Interest is picking up,” and now constitutes about 50 percent of Crowley’s revenue. CellMax uses Pilot’s value-added services to help it more effectively distribute cell phone tower equipment 38 WORLD TRADE OCTOBER 2008 order has completely arrived. Delivering everything to the customer at once minimizes the potential for misplaced components at the receiver’s location and increases efficiency for Pilot by allowing one larger delivery rather than several smaller ones. Taking that a step further, Gruenes says, involves coordinating deliveries so they arrive at the warehouse simultaneously for consolidation, so nothing is actually warehoused. That’s most useful for high end products, and is likely to be a growing trend. Prospering in tough economic times is possible, but it requires taking a hard look at your own organization, your options, and the willingness to act. Warehouses aren’t just for storage anymore and carriers don’t just transport goods. Value-added services are making them strategic partners with skills that savvy shippers can leverage to their own best advantage. WT Contributing Editor Gail Dutton writes often about logistics and supply chain issues. She is based in Washington State. For reprints of this article, please contact Cindy Williams at williamsc@bnpmedia.com or 610-436-4220 ext. 8516.

Table of Contents Feed for the Digital Edition of World Trade - October 2008

World Trade - October 2008 Contents Tune Up Your Supply Chain Globalization: The Real Competitive Threat Supply Chain Watch Tradewinds Shippers and Providers Collaborate to Take on a Challenging Economy Tweaking the Supply Chain to Optimize Value and Minimize Cost Supply Chain Software Morphs Into Enterprise Management Can Warehousing Really, Truly Be Strategic? Everybody is Global Between the Devil and the Deep The Hidden Costs of ‘Free’ Translation Blowing Smoke

World Trade - October 2008

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