A strategic combination of logistics technology and Customs brokerage services is helping fiberglass manufacturer Owens Corning (www.owenscorning.com) solve its logistics challenges. The U.S.-based company maintains facilities in Europe, Asia, South America and South Africa for its materials business, and product demand in certain regions frequently requires movement of material from one region or continent to the next.
"During demand peaks, sometimes there isn't enough product being produced in one locality, so we have to reach out to another region for assistance," says Werner Weiss, the company's international logistics and compliance leader.
Weiss prefers to move product by ocean as much as possible, but certain situations require air shipments, depending on the urgency of the shipment. All insulation material is bulky, for instance, so instead of moving it around the globe, Owens Corning usually produces it locally. Roofing materials, such as asphalt shingles, are dense so they will quickly weigh out a container as opposed to cubing out.
"Occasionally we have combined the two products," says Weiss. "If there's an opportunity to combine dense material with light in order to cube out a container, we'll do it if the customer can use both products."
The composites business consists of glass fiber Owens Corning produces. Its customers take those fibers, mix them with resins and produce what's known as fiberglass. The glass fibers tend to be fairly dense. For that, weight limitations are reached before cube limits.
With so much product and so many locations, technology use is key for Weiss in maintaining the company's competitive edge. The company is getting close to a global deployment of SAP's (www.sap.com) enterprise resource planning (ERP) system, running it in North America, Europe and South America, with plans to continue the roll-out throughout Asia.
"We're definitely moving toward one system but we're not quite there yet," Weiss notes. He adds that the company plans to upgrade to a newer version of SAP's software that includes a transportation management system (TMS), which will replace Owens Corning's home-grown system. "Our in-house TMS was developed on a North American model rather than a global model," Weiss explains, "so we've had to work around it up to now."
Although the ERP system generates a great deal of data required for documentation, Owens Corning outsources customs brokerage and freight forwarding.
"Our brokers take care of bookings and preparing documentation," says Weiss. "We prefer to rely on the expertise that exists in the market as opposed to developing our own. Our suppliers have offices, operations, scope and breadth it would be impossible for us to maintain."
Weiss deals with numerous brokers and forwarders around the globe, since he finds that service tends to be local in nature.
When Owens Corning ran into problems with duty drawback and obtaining refunds on duties, it turned to Seko Customs Brokerage (www.sekoworldwide.com), a U.S.-based service provider.
"Through review of Owens Corning's history, our team was able to provide a solution and work with U.S. Customs in finding a way to get them a refund," explains Annelori Roder, Seko's director of import services.
Seko has access to the company's ERP system, receiving daily reports indicating what's moving, from where to where, to enable them to make bookings and get the shipping process rolling. Once bookings are made, Seko inputs that data into the Owens Corning system, which is then available internally to whoever needs that information.
"We rely on our forwarders to keep us abreast of current and changing regulations," Weiss says. "The communication channel goes back and forth and is part of the partnership we have established. Until now, all that's been required has been an estimated date of arrival and to make sure the product was there by then. We're now looking at the movement of documentation because the timeliness of documents is just as critical as the delivery of the actual goods. You can't clear customs at the other end without the proper documentation on a timely basis. Many of the countries we're dealing with want us to pre-clear the imports. If you don't pre-clear and the vessel arrives, there's a significant monetary penalty."
Owens Corning's providers offer help with the need for timeliness in communications with Customs. Seko, for instance, has been paperless for the past two years, explains Roder, relying on remote location filing (RLF) of documents.
As with other companies, Owens Corning is experiencing capacity issues, having some problems with finding dray carriers to move its containers from the port to the final destination. Weiss has been able to work around this issue, and the Owens Corning supply chain has not been severely impacted.