As one of the country's biggest distributors of high-tech components and peripherals, Avnet Inc. (www.avnet.com) faces huge logistics hurdles on a daily basis. The $9 billion company is responsible for monitoring and moving SKUs that number in the hundreds of thousands, from more than 280 main suppliers. To ease much of its logistics pain, Avnet relies on freight forwarders.
“Forwarders are important and instrumental in our ability to service the market,” explains Jerry Biegler, Avnet's director of corporate transportation services.
Avnet's operations are divided into two groups: Electronic Marketing, which includes items like components, connectors and cables, represents the programming side of the business. Technology Solutions is more the hardware portion of the business, dealing with things like servers and rack mount applications.
Biegler joined Avnet after working as a freight integrator for a number of years. At that time, he looked a bit askance at forwarders, but his view has since changed.
“Forwarders deliver a different level of service than integrators,” explains Biegler. “They may have a similar service mix — with overnight, second day, ground and so on — but their approach is different in that they use more assets than just their own. They are able to provide both expedited and time-definite services with more of a ‘hand holding' approach. They also have closer proximity to their client than the large integrators.”
Avnet uses Mach 1 Air Services Inc. (www.mach1air.com) as its primary forwarder for handling what its large heavyweight domestic moves, usually three- to five-day service across the country.
Mach 1 specializes in high value products that need to move at high velocity or very time-definite, explains Ed DiSalvo, the company's executive vice president of sales. The high value doesn't always mean high dollar value, he points out — it can mean high importance value to the customer. It could be lower cost goods that are important to a total system.
Mach 1 has its own trucks, but they are used primarily for pickup and delivery at its 15 facilities across the country. It does have some expedited line haul runs with contractors. The forwarder will outsource on an as-needed basis.
Avnet works back and forth with Mach 1 electronically, providing the forwarder data on everything from what it calls “site surveys” for each shipment. In turn, Mach 1 offers electronic visibility into each shipment for Avnet.
Most importantly, the forwarder is proactive in alerting Avnet to exceptions, notes Biegler. “We get regular, consistent reporting of shipments within their system, which allows us to manage exceptions. That's really what we're concerned with — any exceptions.
“Freight forwarders serve a very specific niche within the marketplace because of their low fixed cost — in most cases,” Biegler continues. “They're not very heavily asset-driven, so they can use a multitude of line haul and agent activities around the country for support.”
Based in Phoenix, Avnet's products reach end customers in 68 countries, from facilities spread throughout the globe. “We have our own people in each location that support our transportation efforts,” explains Biegler, “whether it is China or Europe.”
On the technology front, the company uses home-grown transportation management software and tracking-and-tracing systems that allow Biegler to manage SKUs and parts, balance inventory and gain visibility into inventory globally.
Avnet purchases transportation on its own. Biegler helps Avnet personnel in other countries negotiate agreements with carriers in their areas to leverage the company's size and budget with providers, with the goal of deriving as much value as possible.
Avnet also outsources brokerage needs through providers selected for transportation services. “We do have customs brokers on staff,” Biegler notes, “though we don't utilize them to clear customs on our own.” LT