In 2004 managers at Johnson Electric, a Hong Kong-based manufacturer of electric motors, were frustrated by delays and inconsistent travel times of cargo shipped from China to its distribution center in Detroit and other Midwest locations. Adding to the delays, material was being held at the docks waiting for enough cargo to fill a container destined for a specific DC.
The root of the problem was the congestion at popular West Coast ports. Evans Distributions Systems a family-owned logistics provider headquartered in Detroit, had been inspecting, sorting and repackaging Johnson Electric's motors at its warehouse in Detroit and transporting them to regional DCs since 1996.
To speed Johnson Electric's supply chain, Evans representatives suggested rerouting shipments from California to its 92,500-sq.-ft. warehouse in Suffolk, Va., near the Port of Virginia. The solution, they counseled, would provide an all-water route through the Panama Canal that would position Johnson closer to its customers and could shorten end-to-end delivery time.
Keeping Track of Business
Evans provides warehousing and distribution, transportation, quality inspection and contract packaging for automotive, chemical, food and beverage and consumer products customers. The company has tailored Infor's (formally SSA Global) warehouse management system (WMS) and adopted an inventory management system to match customers' individual needs.
Even the most robust, integrated WMS means nothing without the skills of employees to use the tool. Evans managers maintain a quality policy that encourages an atmosphere where employees can rethink current processes and look for ways to improve them. Innovation drives the company from the warehouse floor to the boardroom. Those working most closely with shipments are in the best place to pinpoint where and why an operation falls short.
Evans supports its employees with formal and on-the-job training. In addition, it gets training from its customers. "We are fortunate to have good partnerships with our customers because often, training can come directly from our customers," says Leslie Ajlouny, v.p. business development. For example, ArvinMeritor (www.arvinmeritor.com), a Detroit-based automobile wheel supplier, has provided quality training at Evan's facilities. "There is nothing like hearing it directly from the company whose parts and product we handle," she says.
After shifting some shipments to Suffolk, Johnson Electric achieved faster transit times and saved on transportation costs, making shipments to Honda locations in Michigan, Ohio and North Carolina five days ahead of schedule. Even though the physical distance was longer, the hassle-free consistency coupled with a closer proximity to Eastern DCs made for a shorter end-to-end time.
In alignment with its mantra "It's easier with Evans," when Johnson Electric managers decided to send more product to the East Coast, the company made sure the transition went smoothly. The same people working with it in the past remained on the new account to oversee and process orders. One warehousing point of contact handles all inventory transactions and receipt and order processing, communicating shipment timing and delivery details and making sure trucks are called in for pickups.
Evans' integrated WMS keeps track of all the shipments coming in from the docks. Evans employees scan each pallet and place unique label identifiers on them for accuracy and real-time inventory visibility. The pallet is tracked every time it moves. Johnson Electric can access the data through automated reports and confirmation of shipment.
In the end Evans' improved transit time predictability, reduced transportation costs and improved end-to-end delivery times, all of which resulted in a substantial savings and a very pleased customer. Although freight rates have increased over the past year, Johnson Electric has enough flexibility with its carrier contracts to determine whether diverting shipments to the East Coast makes more sense if congestion is expected.
With the increase in overseas shipments, customers tend to be located much farther away from the final steps in the supply chain than in the past. As a company's last line of defense in handling quality checks before shipments reach their final destination, Evans has created a value-added division that does inspection, rework, repacking, sequencing and light assembly. To keep pace with growth, Evans will move to a newly constructed facility early in 2007 in Isle of Wight, Va.
Evans Distribution Systems at a Glance:
- Years current facility has been in operation: 2 years
- Under current ownership: 2 years
- Days of operation per week: 7
- Total square footage: 90 ,000 sq. ft.
- Number of employees: 7 at Suffolk, Va. facility (300 at all locations)