Supply Chain Strategies for Success
An optimal distribution network is intelligently designed to minimize costs by providing the right goods, in the right quantity, at the right place, and at right time.
There is turbulence and uncertainty throughout the global economic system. Consumers are hunkering down with a bunker mentality and cutting back on what they buy. That ripples back throughout the global economy and impacts manufacturers, retailers and wholesalers who are contracting what they make, purchase and carry in inventory. According to a report by LTD management, a supply chain management consulting firm, the cascading effect of the slowdown then affects logistics service providers—third party logistics providers (known as 3PLs), forwarders, ocean carriers, NVOs, truckers, intermodal and warehouses/storage operators. They are between the proverbial rock and a hard place with higher costs, especially in the area of fuel, and softening revenues.
Dr. John Langley, director of Supply Chain Executive Programs at Georgia Tech recently collaborated with Oracle and DHL to survey 1,644 logistics executives from around the world. Langley says companies must re-assess what their core competencies really are, and think more collaboratively in this economic environment.
“More than ever before, it is essential for supply chain organizations to meaningfully assess their core competencies and to make tough decisions as they arise,” says Langley. He also believes that in tougher times, the need for supply chain collaboration is more, not less.
Langley adds this warning: “When times get tough, many companies head for the trenches and turn inward in terms of their priorities. This is exactly the wrong thing to do, particularly as it relates to the need for inter-organizational cooperation in the supply chain.”
According to the survey, green supply chain initiatives are essential for future business success according to 98 percent of logistics executives, yet the majority are unwilling to invest any additional funds in the greening of the supply chain.
“The greatest shared challenge is that of forming and growing successful collaborative relationships between users and providers of logistics services,” says Langley. “Without a commitment from both sides little progress can be made in the greening of the supply chain and supply chain security. More than three quarters of 3PL users rate consolidation, routing, and mode selection as the top services 3PLs can contribute to green strategies. However, just 31percent indicate that their 3PLs offer these capabilities.”
An optimal distribution network is intelligently designed to minimize costs by providing the customer the right goods, in the right quantity, at the right place, and at right time. In most organizations, controlling distribution costs involves striking a balance between warehousing and transportation. While more distribution centers drives down the cost of transportation, the opposite holds true as well. Here are the locations that provide fast and efficient roadways and the kinds of incentives that benefit your logistics operations.
Port San Antonio, TX: Dynamic Air Cargo Hub
According to a congressional mandate issued in 2007, 100 percent of all cargo must be screened by August 2010. Port San Antonio offers a great solution.
A multi-modal logistics platform and aerospace complex, Port San Antonio is centrally located in San Antonio, TX and encompasses almost 1,900 acres of master-planned property, including Kelly Field (SKF) airport. Port San Antonio’s compelling advantage is its accessibility, which is located at the center of the North-South IH-35 NAFTA Corridor that connects Mexico, the U.S. and Canada. Furthermore, the adjacent IH-10 intersects the city from East to West and extends from California to Florida. As congestion slows cargo in other venues, Kelly Field (SKF) is only now emerging and, as a result, remains uncongested.
The Port’s airfield opened to domestic air cargo aircraft in March 2007, and its air cargo terminal was completed in 2008. Ample ramp and terminal space on the airfield allow for quick re-fueling and efficient turnarounds. With its extensive runway and ramps, Kelly Field is the premier physical asset of Port San Antonio’s development plan. Furthermore, the air cargo terminal designates Port San Antonio as a direct point of entry for cargo in the international trade landscape.
International air cargo must be inspected as it arrives in the U.S. To meet this federal provision, the Port opened a U.S. Customs and Border Protection Federal Inspection Services (FIS) facility at the airfield in February 2009. The facility is utilized to conduct administrative and cargo processing functions for customers of Port San Antonio. An agricultural laboratory and several storage areas also are available for the accommodation of bonded goods.
Mississippi: Right Fit for Distribution
With a central location, an exceptional transportation infrastructure and a business-friendly climate that fosters profitability, Mississippi has the right combination of resources for companies across a variety of industry sectors. In particular, the state offers an ideal location for companies planning to establish distribution or warehousing facilities in the southeastern United States. Mississippi is home to more than 2,200 warehousing and distribution facilities and the sector continues to grow.
Handy Hardware recently broke ground on its Meridian facility, which will employ approximately 150 people. The project represents a $20 million investment by the company and will serve the hardware distributor’s members in Mississippi, Alabama, Georgia, Tennessee, Florida, Arkansas and Louisiana. Clutch Auto Limited, a leading clutch manufacturer and exporter in India, has been located in Meridian since 2006. The company produces clutches for cars, commercial vehicles, heavy-duty trucks, tractors, earthmovers and military vehicles. The Mississippi facility distributes Clutch products to locations around the U.S. and Canada. Meridian’s prime location along the Interstate 20 corridor near the Mississippi-Alabama border makes it an ideal site for distribution facilities. Recently, the area was ranked by Chicago Consulting as one of the 10 best warehousing networks with one of the lowest possible “time-to-market” ratios in the nation.
Northern Mississippi continues to be an attractive location for companies in the distribution/warehousing sector as well. The region has quickly become an extension of Memphis, TN, home to major FedEx and UPS operations. It combines the benefits of Mississippi’s supportive business environment and excellent transportation options with the advantages of a Greater Memphis location. In April, Cardinal Health, a Fortune 20 corporation, announced plans to locate a new medical-surgical distribution facility in Olive Branch in DeSoto County, joining a growing number of companies with distribution centers there. The facility will serve hospitals, clinical laboratories, ambulatory facilities and physician offices across northern Mississippi, western Tennessee and the entire state of Arkansas. Distribution facilities for Future Electronics, Milwaukee Tool, ScanSource and Whitmor also call DeSoto County home.
As the demand for distribution facilities in the South continues to grow, Mississippi remains competitive with facilities that are ready for business without the need for construction. The Baldwyn Business Center is located near Tupelo in northeast Mississippi, home to distribution facilities for Hancock Fabrics, a crafts and fabrics retailer; Norbord Inc., a forest products company, Fairfield Industries, a full-service geophysical company, Advanced Innovations Ltd., a supply chain solutions company, and others. The Baldwyn facility has nearly 300,000 square feet of distribution, warehousing and office space. Other state-of-the-art distribution facilities are located around the state along with refrigerated/cold storage facilities, including ones in Cleveland in the Delta region and Pascagoula on the Gulf Coast.
Companies like these and others are drawn to Mississippi because of the distinct combination of resources, convenience and flexibility. The state’s transportation systems are fully integrated to maximize transport options. Mississippi is within a day’s drive of such major markets as Atlanta, Birmingham, Dallas, Houston, Little Rock, Memphis, Mobile, Nashville, New Orleans and St. Louis. In fact, its highway system ranks among the four best in the country and the best in the Southeast. Access to two deepwater ports on the Gulf of Mexico by way of the Mississippi River and Tombigbee Waterway makes Mississippi a gateway for worldwide commerce. The state’s 2,800 miles of railways also contribute to shorter lead times when transporting products to customers.
Home to 75 airports, Mississippi also offers flexibility and efficiency in air transportation. The Air Cargo Logistics Center (ACLC) at the Jackson-Evers International Airport is located near the state’s capital in the central part of the state and offers a comprehensive distribution point for air cargo, track and rail shipments generated by manufacturers in major U.S., Canadian and Latin American markets. ACLC consists of more than 100,000 square feet of existing air cargo building space and 450,000 square feet of cargo aircraft parking space, and a multiphase development program will add additional square footage in the near future.
Getting products to customers quickly and efficiently is central to a company’s customer service reputation and its bottom line. A Mississippi location offers the best options to reduce lead times and decrease costs. Along with the logistical advantages, Mississippi also has a plentiful, skilled workforce and offers a low cost of doing business (ranked among the 15 lowest in the nation by CNBC) that make the state a good fit for any company’s distribution and warehousing needs. Visit www.mississippi.org for more information about Mississippi.
Findlay, OH: Transportation Access to the Midwest
The city of Findlay, OH embodies the concept of a micropolitan community—offering nearly all of the advantages of a true metropolitan area, and a superior quality of life, without the disadvantages of a big city. No wonder it currently is the fastest-growing city in northwest Ohio with a population of nearly 40,000. Findlay also has one of the most affordable and respected health care systems in Ohio and a low tax burden due to managed growth.
Located along I-75, Findlay is about 47 miles south of Toledo, 108 miles north of Dayton, 98 miles northwest of Columbus and 137 miles west of Akron on US 224. Findlay and Hancock County boast excellent transportation access for quick and cost-effective distribution of goods and services. I-75 intersects the west side of the city in close proximity to the downtown and feeds outlying industrial areas from several exits. Located within 35 miles of the strategic intersection of I-75 and the Ohio Turnpike (I-80/90), Findlay provides easy access to 60% of U.S. markets within a 600-mile radius. The automotive markets in Ohio, Michigan, Indiana, Kentucky, Tennessee and Canada all are reachable from highways that intersect I-75, and it provides a direct route to Florida and the South.
Air travel is convenient via the 6,500-foot main runway at the Findlay Airport and commercial airline service is available 45 minutes away through Toledo. Other flight options include Dayton, Columbus, Cleveland and the international hub at Detroit Metro, all within 90 miles.
Freight rail service on Norfolk/Southern and CSX rail lines traverse Hancock County, while cargo services are accessible through dozens of inter- and out-of-state trucking firms, with three major overnight package delivery services situated locally.
With access to more than 300,000 potential workers and shoppers within a 30-mile radius, Findlay’s positive business climate has attracted a diverse blend of retail, office, manufacturing plant and distribution centers. Tall Timbers International Business Community houses 13 manufacturing plants and four distribution centers for companies such as Dyson Material, Nissin Brake Ohio and Bridgestone. Marathon Petroleum Company LLC (pictured right) and Cooper Tire and Rubber Company are headquartered there, and more than 13 other high-profile Fortune 500 companies have chosen Findlay/ Hancock County for the dynamic city’s many benefits.
Findlay is truly an international business center. In addition to the many U.S. based companies, seven Japanese companies, two Canadian firms and three German enterprises are located in its business and industrial parks. Foreign Trade Zone 151 offers advantages to companies operating throughout the world and creates a diverse business culture that enhances this historic community.
Findlay offers all of the incentive programs that companies are familiar with throughout Ohio and additional incentives such as the Revolving Loan Fund (RLF) and the Downtown Façade Loan Program.
Land and water are available resources in Findlay for development of commercial, industrial, office and retail space. Many existing sites are fully developed and reasonably priced for immediate occupancy.
Hesperia, CA: The Future of Logistics
The business-friendly city of Hesperia in California’s Inland Empire is a leader in supporting the long-term development of the regional economy. Having secured $2 million in federal grant funding from the Department of Commerce’s Economic Development Agency, the city is ready to build the G Avenue Industrial Rail Lead Track Project, consisting of approximately one mile of new railroad lead track and a parallel runaround track. Construction is slated to begin in January 2010.
Hesperia’s proactive Economic Development Department, and its Redevelopment Agency (RDA)—the wealthiest municipal RDA in the High Desert—are two powerhouses fueling Hesperia’s current growth. The addition of the rail track, one of the city’s far-reaching industrial development goals, will facilitate operations for a greater number of warehousing and distribution centers near Interstate 15. The new track will offer many opportunities for industrial users to purchase rail-accessible properties.
The rail project is guided by Hesperia’s efforts to create sustainable development that includes locally created partnerships and focuses on regional solutions for economic development. It is closely tied to Hesperia’s strong commitment to grow its economy, attract new businesses and development, and provide jobs for its residents.
The completion of this project will stimulate the development of 210 acres, and will indirectly impact the attraction and expansion of other businesses into the 1,300-acre I Avenue Industrial area. In addition, the project fosters entrepreneurship by making rail accessible throughout the region to smaller businesses ship and receive goods with the use of a team trans-load facility.
The planned track is expected to bring economic results that will match or exceed the advantages of the neighboring, soon-to-be built out, Foxborough rail industrial park, which has attracted leading national and international companies.
Strategically positioned for logistics and distribution, the fast-growing city of Hesperia is conveniently situated within easy access to the logistics network that serves the combined ports of Los Angeles and Long Beach (LA/LGB), the nation’s largest international cargo trade area.
Joplin, MO: Central, Connected, Capable
For companies seeking a central location that reaches numerous major metro areas, excellent transportation connections and a capable labor force, Joplin, MO is a great place to locate. The Joplin Metro area in southwest Missouri is in the center of North American markets. Major metros such as Dallas, Kansas City, St. Louis, Tulsa, Little Rock and Memphis are just hours away. Transportation to those markets is efficient, thanks to Interstate highways and substantial rail connections. Commercial air service is available at Joplin Regional Airport and three other major airports within 90 minutes drive time.
Companies in the Joplin Metro area benefit from a productive, available labor pool of 93,000 people. Missouri Southern State University in Joplin offers a broad range of standard and business-specific classes, and a strong industrial technology program. Crowder College is a source for customized technical training. Overall, between the Joplin schools and MSSU, more than $100,000,000 is being spent on educational facilities right now.
Joplin’s quality of living is enhanced with two major regional medical centers, more than 150 restaurants, a wide variety of retail from locally-owned shops to the 114-store Northpark Mall.
Ardmore, OK is a Prime Location in the Southwest
Ardmore, OK is located on Interstate 35, exactly halfway between Dallas, TX and Oklahoma City, OK. Due to its prime location and community leadership, sectors such as distribution, research, advanced manufacturing, aviation, energy and agriculture have prospered in Ardmore’s diversified economy. The Ardmore Development Authority (ADA) has cultivated an economic environment that has allowed for start-up companies and established companies to succeed. Noble Energy, Valero and Michelin North America all have large facilities in Ardmore, OK.
Nationally recognized as a premier economic development organization, the ADA focuses its efforts on broadening the community’s economic base while attracting and retaining business and industry throughout the area and Southern Oklahoma. The ADA owns and operates four industrial parks with more than 3,500 industrial acres and more than three-million-square-feet under lease.
Transportation-sensitive industries and distribution centers have found Ardmore to be the perfect location to serve the Midwest and Southwest markets.
The low cost of construction, utility rates, housing and taxes make this
area of Southern Oklahoma a desirable location. Ardmore is serviced by
rail from Burlington Northern Santa Fe Railroad with rail running through two of the four Industrial Parks owned and operated by the ADA. Both air cargo opportunities and private air transportation are available at the Ardmore Industrial Airpark.
With more than 2,900 acres, the Airpark enhances Ardmore’s location for aviation and heavy industry. The Airpark has two runways with lengths of 9,000 and 5,663 feet, an FAA-staffed control tower, full instrumentation, parking capacity for up to 100 commercial sized aircraft and more than 36,000 sq. ft. of hangar space. Current Industries at the Airpark include King Aerospace, Higgins Interiors, Inc., Dollar General Distribution Center, East Jordan Iron Works, Carbonyx, Inc. and Online Packaging.
Ardmore is an agriculture and research center due to the Samuel Roberts Noble Foundation, a world-renowned research organization. The Noble Foundation focuses on research in forage improvement, plant biology and agriculture. A world leader in plant biology and the genetic engineering of fungal resistant plants, the Noble Foundation also receives worldwide acclaim agriculturally in plant breeding and demonstration farms. The Noble Foundation and Oklahoma State University recently began construction on a new Institute for Agriculture Bio-Sciences.
The R&D community is not limited to the Noble Foundation. What began as a start-up venture more than a decade ago, IMTEC, a 3-M Company, designs and manufactures precision dental specialty products and CT Scanners from its worldwide headquarters in Ardmore. The company employs 160. Southwest Silicon Technologies reclaims silicon wafer while Amethyst Research, Inc. conducts research and development on night vision related technologies and products.
The ADA offers a single point of contact for information, proposals, planning and site assistance. Since the ADA owns four industrial parks and several single sites and buildings, it has the ability to negotiate favorable terms for new and expanding companies. Factor in Oklahoma’s right-to work status and a host of business incentives, and companies get more in Ardmore.
Ardmore’s economic map encompasses many areas of industry. This is possible because the cost of doing business in Ardmore is significantly less than most of the nation, and cannot be beat when combined with Ardmore’s business incentives.