Supply Chain
Best Practices of Top Shippers
Daimler Vans Manufacturing, Advanced Auto Parts, and
Sonoco discuss how to run a tight ship
In a world where time is money, shaving valuable days off production or assembly time can save companies big bucks and help keep all-important customers happy.
Industry leaders from the manufacturing, supply and logistics sectors gathered in May in Charleston for the 35th annual South Carolina International Trade Conference.
During one of the business workshops, supply chain experts shared insider knowledge on how they run a tight ship, so to speak.
Continuous improvement
Peter Ohler, director of logistics for Daimler Vans Manufacturing LLC in Ladson, S.C., says measurement is key to optimizing productivity.
The manufacturing plant, which turns out Daimler’s Sprinter van for the U.S. market, ships 245,000 TEUs a year worldwide. At 56 percent, or 137,000 TEUs, the U.S-to-Europe route accounts for the biggest share.
Daimler also moves 63,000 tons of freight a year by air, and again, the U.S.-European route sees the most traffic.
With so many containers traveling back and forth, the company understandably commits significant resources to maintaining inbound and outbound logs accurately so that hands on the shop floor stay busy.
Standardizing procedures — The secret, Ohler says, is standardization. In other words, each of the company’s locations around the world follows the same procedures.
Monitoring procedures — To help maintain what Ohler called “continuous improvement,” Daimler constantly monitors its procedures and compares every facet of its supply chain with historical data to achieve optimum productivity.
“You can only improve if you measure it,” Ohler says.
Keeping it simple — The supply process is kept as simple as possible, Ohler says, with complete transparency. All users can see the flow of
containers, from supplier to point of use, which helps minimize handling.
“We have to make sure the right part is in the right place,” Ohler says. “We put all of it in a big book and call it the supply system.”
Everything’s negotiable
For Lisa Saunders, vice president of transportation for Advanced Auto Parts, the supply chain is one-way traffic.
Her company has zero exports, only importing merchandise destined for sale in its retail stores. Advanced Auto has eight distribution centers from Kansas to Ohio and into the Southeast.
Advanced has two business models, Saunders says: the “do it yourself” market and the “do it for me” market. The latter sector is growing rapidly, she says.
Previously, Advanced used buying agents for shipping contracts. It now negotiates ocean contracts to coincide with Advanced’s fiscal year. Further, the company is able to negotiate a sliding scale of rates depending on its peak and trough seasons.
Advanced’s peak season usually is from the end of February until the end of June, Saunders says, just as the weather’s breaking and summer’s coming.
International supply chains are complex, she says. “Pick partners who will help you manage your costs,” she advises.
Building relationships
At packaging company Sonoco Products in Hartsville, S.C., international transportation manager Fritz Mays says his company concentrates on building healthy working relationships to help synchronize its global business.
“Anyone can move freight, but do you want to do business with just anyone?” Mays says. “This is where strategic relationships come in.”
Not to be confused with the oil company Sunoco, with a “u,” Sonoco is a $4 billion concern with 335 plants in 35 countries and more than 18,000 employees. The company makes all of the Pringles potato chip tubes in the United States, among a host of other products.
With such a global reach, Sonoco regularly canvasses its worldwide employees and business partners to help the company keep a grip on common practices far beyond its rural South Carolina base.
“What better way to know what’s going on than speaking to the person in that country,” Mays says.
You cannot do it alone, Mays says. But do not assume you know what people think.
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