GENCO Builds out its Transportation Management Offering

GENCO Builds out its Transportation Management Offering

Green Bay, Wisconsin USA

June 30, 2007

By

Evan Armstrong and Amy St. Peter

Key Personnel:

Dan Sellers, President – Supply Chain Solutions

Larry Chaplin, SVP – Supply Chain Solutions

Tom Anderson, SVP – Operations and Finance

Bob DeVos, SVP – Business Development

Bill Knasinski, VP – Parcel Solutions

Catherine Beaudo, Manager – Parcel Operations

Candee Wisniewski, Logistics Manager – Supply Chain Solutions

Overview

Many of North America’s leading retailers and manufacturers have turned to GENCO for supply chain management solutions. With revenues of $700 million, GENCO has become the recognized leader in reverse logistics services and has expanded its integrated 3PL service offering. GENCO manages 95 operations totaling over 34 million square feet making it North America’s second largest value-added warehousing 3PL. With its acquisition of Green Bay, Wisconsin-based IOgistics in 2003, GENCO has built an impressive domestic transportation logistics business, managing $655 million in transportation in 2006.

Parcel Management Services

GENCO has developed proprietary parcel auditing and payment software and views its parcel expertise as a key competitive differentiator. It currently has 50 active parcel negotiation customers. Services include parcel contract negotiation, transportation engineering, payment and audit, and data management and reporting. The average transportation savings realized from utilizing GENCO’s parcel negotiation and auditing services ranges from 8% to 12%.

As part of the parcel auditing process, GENCO collects over 200 pieces of detailed information from UPS, FedEx and DHL on behalf of the customer. Using its proprietary software, GENCO executes an entire freight audit to identify:

• Invoices for parcels that have not been shipped and/or delivered.
• Duplicate invoices.
• Invoices that are erroneous: whether it be total charges, incorrect discounts, address corrections, or other discrepancies.
• Unauthorized charges and/or account numbers.
• Employee theft.

GENCO uses a fact-based, non-confrontational negotiation method with parcel carriers. By means of a scorecard, GENCO identifies what matters most to its customers. Then GENCO’s proprietary information technology provides valuable information during negotiations.

International Truck & Engine Parcel Management Case Study

Headquartered in Warrenville, IL, International Truck & Engine produces International brand commercial trucks, mid-range diesel engines and IC brand school buses and is a private label designer and manufacturer of diesel engines for the pickup truck, van and SUV markets. The company also builds medium commercial trucks and sells truck and diesel engine service parts through a joint venture with Ford Motor Company.

International required a cost-savings approach to manage its parcel shipments and needed parcel auditing, processing, and reporting capabilities that would be financially beneficial. They turned to GENCO for both data management and contract negotiation services.

Utilizing its data management process, GENCO analyzed the line item detail obtained from International’s parcel carriers to ensure the correct contractual amounts were being charged. Both standard and customized reports were provided to International which included new actionable information necessary for successful contract negotiations.

The parcel carrier negotiation process started with GENCO determining what was most important to International when evaluating carriers and rates. Then, through the knowledge of GENCO’s parcel experts, detailed negotiations were conducted with the carriers. With GENCO’s guidance, International’s 2006 negotiations saved it 18% over its previous agreements with parcel carriers.

Pacific Cycle Parcel Management Case Study

Pacific Cycle designs, markets and distributes high-quality bicycles and other recreational products globally. Its brands include: Schwinn, Mongoose, Powerlite, Dyno, and Pacific Outdoors. Pacific Cycle has grown to be a top seller of bicycles in North America and it sells products internationally in 60 countries via more than 50 international distributors.

After three recent acquisitions, Pacific Cycle’s parcel volume grew substantially requiring major adjustments to its current parcel management processes. It needed to conduct better parcel carrier negotiations and have a strong reporting and auditing solution to gain better control of the thousands of orders being fulfilled from its multiple locations each week.

GENCO worked with Pacific Cycle to identify its parcel service requirements and pricing goals. Then, GENCO audited thousands of package shipments using its data warehouse and reporting system. Pacific Cycle used the report findings to validate its parcel carrier pricing. Using this information and the GENCO negotiation approach, Pacific Cycle achieved considerable parcel cost savings while maintaining good on-going carrier relationships.

Briggs & Stratton Global Transportation Management Case Study

In 2005, GENCO was engaged by lawn equipment and power generation manufacturer Briggs & Stratton to perform a global supply chain network analysis. GENCO’s analysis provided significant cost reduction recommendations and identified areas for service improvement. After reviewing the analysis, Briggs & Stratton asked GENCO to implement the proposed operations improvements. This included managing all of Briggs inbound and outbound domestic transportation and import and export shipments between points in North America, Europe and Asia.

GENCO started up the new lead logistics provider operations in June of 2006. To support Briggs international transportation needs, GENCO leveraged its partner BDP International for import/export and customs clearance capabilities. In addition, GENCO developed a centralized transportation management center (TMC) in Green Bay to manage Briggs domestic transportation requirements.

The Green Bay TMC is staffed by five people and interfaces with one on-site GENCO manager located at Briggs & Stratton. Over the last year the operation has managed approximately 125,000 domestic shipments and 4,000 international shipments. GENCO utilizes its Nistevo on-demand transportation management system (TMS) from Sterling Commerce to provide vendors with inbound carrier routings, consolidate less than truckload (LTL) shipments into truckloads, build multi-stop truckloads, perform load tendering, and track and trace shipments to and from four Briggs distribution centers and six plants. Domestic shipments include inbound parts, vendor to vendor moves, finished goods orders, and returns. Through its reengineered processes, GENCO has been able to provide significant savings to Briggs over and above its initial carrier contract negotiations. Additionally, GENCO has been able to exceed its 96% on-time service level agreement to Briggs for domestic shipments.

Summary
Founded in 1898, GENCO has grown and expanded its range of services to include contract logistics, reverse logistics, pharmaceutical services, product liquidation, transportation management, parcel negotiation and audits, damage research, government infrastructure support, and defense logistics operations. With its reverse and forward logistics expertise and growing transportation management capabilities, GENCO continues to add to its impressive list of customers which includes many Fortune 500 companies and U.S. government agencies.