Menlo Worldwide Logistics Expands its European Market Presence

Menlo Worldwide Logistics Expands its European Market Presence
Eersel and Rotterdam, Netherlands
July 10, 2009
By
Evan Armstrong

Key Personnel:
Bob Bassett, Vice President of Sales and Marketing
Arthur van Gerven, Sr. Director, Business Development, Key Account Management and 4PL Services
André de Jong, General Manager – Eersel
Hein van Gastel, Logistics Manager – Eersel
Philippe Angeline, Warehouse Manager – Rotterdam

Menlo Worldwide Logistics Europe Overview

Menlo Europe’s 2008 revenues were approximately $80 million and its primary service offering includes both dedicated and multi-client warehousing and multi-modal transportation management. It has a staff of over 400 operating out of 14 Locations in seven European countries. The 14 locations include dedicated customer operations in: Germany, Belgium, Hungary, Ireland, and The Netherlands. Its total warehousing footprint is just over 60,000 square meters (SQM) with seven warehouses. It also manages two transportation management routing centers; one is in Eersel, Netherlands and one is in Budapest, Hungary. Menlo Europe’s transportation management services include pan-European ground truckload, less than truckload (LTL), and last mile delivery services. Its key European customers are: 3Com, AMD, Blue Coat, Bobcat, Diebold, Lam Research, GE, MAQUET, NCR, New Era, Nike, Nike Golf, Powerwave, and Trimble.

In a recent visit, we had the opportunity to tour one of Menlo’s main European operations in Eersel, Netherlands and a smaller warehousing operation in Rotterdam. These are detailed below.

Eersel Multi-Client Warehouse and Transportation Management Routing Center

Menlo’s Eersel warehouse started as an Emery operation in 1998 for Nike and in 2002 was migrated to Menlo. It is approximately 35,000 square meters and has four separate walled off subdivisions. The ceiling height is 10.6 meters, and Menlo added two 1,400 square meter mezzanine levels in 2007 in one of the warehouse sections to manage order fulfillment for Nike’s online Internet store. Menlo is a global lead logistics provider (LLP) for Nike Store and Nike Golf.

Today, Menlo’s Eersel facility in total manages 35,000 SKUs, and processes over 500,000 orders per year for 12 different customers.

Menlo Eersel Warehouse Layout

Menlo is driving “Lean” management principles throughout its organization and Europe is no exception. Inbound warehouse receiving and outbound shipping planning boards are utilized and numerous quality and productivity measures are tracked each day. Its approach is bottom-up quality improvement focused, and Eersel’s staff initiated 95 Kaizen (process improvement) events in 2008. The Eersel operation earned Menlo’s Silver Lean level (which runs Bronze through Gold) in 2007. It is also ISO 9002 and TAPA certified.

In approximately 3,200 SQM of warehouse subdivision “E”, Powerwave network computer equipment is stored in racks. The equipment is received from manufacturing facilities in China and Estonia and Menlo fulfills European business-to-business orders of case and full pallet quantities. Menlo is using its proprietary SIMS warehouse management system (WMS) with interfaced radio frequency (RF) scanners to manage inventory and warehouse tasks for Powerwave. It is also managing all outbound ground and parcel transportation and performing some refurbishment and returns management work.

The remainder of the E warehouse subdivision is occupied by Nike Golf storage racks and a multi station pick/pack line, as well as the Nike Store (Nike.com) mezzanine operation. Both Nike Golf and Nike Store operations involve thousands of SKUs and order planners use Menlo’s Provia WMS to drive cluster picking. Outbound orders are packed and shipped to retailers, consumers and individual stores. The operation’s staffing runs from 60 to 120 people (depending on the season) working in single or double shifts, five days per week.

Menlo began working with a Europe based global health care and home care equipment and devices provider in 2007. It manages approximately 9,000 SKUs of product in 10,000 SQM of warehouse subdivisions “A” and “B”. Menlo processes approximately 400 orders per day destined to hospitals, extended care facilities, and service technicians. The operation has a staff of 50 and almost all of the items and products are picked and packed prior to shipping. The service scope from Menlo includes returns processing and also value added services.

MAQUET, another Menlo customer in the health care industry, recently expanded its relationship with Menlo awarding it new warehousing and inbound and outbound transportation management business in Europe for its products manufactured in the United States. The new business will expand MAQUET’s footprint in Eersel from its current 3,800 SQM operation to approximately 4,000 SQM in subdivision B. The Eersel facility will process over 10,000 outbound orders annually and perform all warehousing activities for some 350 separate products. The operation for this customer will include warehousing several thousand SKUs of finished goods such as ventilators and cardiovascular monitors and many lines of spare/service parts. Menlo will continue and grow its existing vendor managed inventory (VMI), kitting, and pick/pack operations and additionally the work scope will expand to include the transportation management of outbound orders to customers located in seven European countries.

In a small 3,000 SQM section of warehouse subdivision “D”, Menlo is performing light assembly work for Trimble. Trimble is a manufacturer of survey and global positioning equipment. Components used in the assembly are received for short-term storage in nearby racks. Menlo receives daily work orders for 16 different configurations of two types of survey equipment machines from Trimble. It then assembles the machines, tests them to ensure they function properly, and packs them into kits with designated parts and accessories. Provia is used to manage the warehouse and assembly processes and approximately 20 to 40 people are working in the operation in a given day depending on order demand. Approximately 100 orders are processed each day. Menlo is also performing some returns processing as part of the operation.

The 3,000 SQM 3Com finished product warehousing and distribution operation in subdivision “D” was the last stop on our warehouse tour. Menlo receives products including routers, switches, and components such as power cords from 3Com’s global suppliers. The inventory is putaway into rack storage. Approximately 80% of the products and components are VMI stock. As orders are received, product is picked and packed for shipping. Menlo is processing several thousand orders per year using its SIMS WMS. It is also processing returns and making software updates to products as value-added services.

The final stop on the Eersel tour was the 10 person transportation management routing center operation. The center is managing pan-European transportation for most of the warehousing customers. Modes handled include full truckload, LTL, small package, ocean and air.

Rotterdam Multi-Client Warehousing Operations

The Rotterdam warehouse is approximately 8,500 SQM and houses operations for Blue Coat Systems, CHEP and NCR. The facility is ISO 9001 certified, Menlo Lean Silver certified, and TAPA certified. It has an approximate staff of 35.

The first operation we reviewed was for Blue Coat Systems. It develops computer network security and management systems for web communications and corresponding applications and began working with Menlo this year. The eight person, 250 SQM operation programs individual network “firewall” systems from 16 work stations. Once programmed, the units are tested, packaged, and shipped. Several hundred units are processed and shipped each week.

Menlo processes approximately 15 orders for NCR point of sale (POS) retail equipment units per day. Menlo configures and programs each machine in a 15 person operation occupying approximately 1,200 SQM.

The rest of the warehouse was dedicated to multiple clients and the Rotterdam CHEP pallet and container hub operation.

Summary

With expanding European, Asian, and North American operations, Menlo has advanced to being a true Tier-One major market supply chain manager. With its Lean management focus, Menlo has been able to attract significant new business even in the current recessionary environment. Its Lean approach is making Menlo especially attractive to high-tech and healthcare vertical industry customers.