Komar Distribution News

Case Study: Garment on Hanger Services

Customer Profile

A leading supplier of women’s wear to major retailers throughout the US.

Customer Challenge

To preserve the condition of factory pressed garments during transit to retailer without significantly increasing costs

Komar Distribution Solution

The client’s garments were arriving at the retailer looking shopworn and wrinkled. As a result, the brand was experiencing lackluster sales.

Komar worked with the client and devised special loading and packing instructions to maximize GOH ocean container capacity while maintaining the factory perfect condition of the garments. This drove down cost as more units per container were realized.   The client then piggybacked on advantageous KDS freight rates and transit times, driving down cost further.

Upon arrival at the KDS distribution centers, customer care teams carefully inspected the garments, working closely with the customer and factories to improve arriving garment condition. Images and video conferencing made the task highly efficient.

Engineered handling, attentive packing instructions, and in-depth training of KDS associates ensured the garments arrived at the retailer in pristine condition. Sales jumped twofold as the brand now commanded coveted aisle space.

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Cargo Traffic Jumps at Local Ports

Los Angeles Times, April 16 2010

The ports of Los Angeles and Long Beach, which together make up the nation’s busiest shipping container complex, showed gains in cargo traffic for the fourth straight month in March, boosting trade-related employment in Southern California.

In Los Angeles, the largest U.S. port, exports jumped 15.8% compared with March 2009, driven by such items as scrap paper, scrap metal, agricultural products and finished manufactured goods. Long Beach’s exports also rose strongly, 10.9%, as both ports benefited from the weakness of the U.S. dollar against other major world currencies.

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How to Build State of the Art 3PL Relationships for the 21st Century

Keynote speech at Computer Generated Solutions User Conference
April 8, 2010 by Jay Harris, President of Komar Distribution Services

Solid business rules and logic, combined with the power of great systems, make it possible to successfully manage a 3PL relationship and gain competitive advantage. Opportunities include, enhanced supply chain management, reduced transportation costs, fewer operational chargebacks, improved on time performance and superior retailer scorecard grades.

Birth of Komar Distribution Services (KDS)

Over the course of the last decade Komar has been fortunate to acquire many companies. But for every one acquisition there have been many more companies we have turned down after an evaluation period. One day Charlie Komar and I had just finished up just such an evaluation. It was a compelling business but for various reasons not for us. As we rode down in the elevator Charlie said to me “What they really need, Jay, are our processes and best practices.”  At that moment, you might say KDS – Komar Distribution Services – was born.

We continued to think deeply about the prospect of developing our business acumen into a business, and with careful study came to the realization our processes, knowledge, systems and you might say success, lead to the formation of KDS. Most importantly, perhaps, it was our perspective. We had integrated more than a half dozen 3PLs into our business process. We had intimate knowledge of what it takes to make a 3PL relationship work, and most importantly, what worked to form an advantageous relationship.

A quick overview of the 3PL business

Third-party logistics providers, or 3PLs, originated on the simple premise of allowing manufacturers the opportunity to let somebody else manage their transportation or warehousing. It may come as some surprise that automotive manufacturers are heavily dependent on 3PLs. Toyota, General Motors, Ford Motor and Chrysler, all use more than 40 third-party logistics providers.

That begs the question: Why? The utilization of 3PLs, most research firms would say, is one the simple concepts. Companies outsource to focus on their core competencies, while the 3PL becomes responsible for supply chain information, business process, and technology solutions.

This sounds great in practice, but in our experience, the decision to outsource some or all of a company’s logistics, distribution and transportation is not one to take lightly. The logistics landscape is littered with failed relationships between 3PLs and manufacturing companies. In many cases, the seeds for these failed ventures are sown early in the process.

KDS Assigns a Project Manager to Each Company

KDS looks for a manager well-versed in opportunities and the predictive nature of the business. In the beginning of the relationship, the Project Manager is what I would call a true project manager. There can be many singular / one-time events.  For example, writing or fine-tuning an SOP standard operating procedure or Best Practice.

There may be an extended discovery period between the partners – exploring supply chain opportunities – squeezing money and days out of the supply chain, setting up meaningful metrics, and so on. An effective PM is skilled at identifying opportunities and uniting parties and systems and processes. Eventually, the relationship evolves, and while there will always be singular task and improvement opportunities, the relationship should fall into a comfortable and natural cadence.

A great 3PL project manager strives to take great best practices, embed them into the customer’s organization or the 3PL and make them durable – permanent and lasting. These include:

• Improving Stock Arrival Dates at the DC
• Reducing Storage
• Actually shipping on start – always
• The perfection of many processes

The list is extensive.

A predictive Environment Inbound with Accurate In DC Dates creates a Predictive Environment for Expected Ready Dates

Efficient communication with the oversees supplier can have a dramatic and profoundly beneficial effect on what I call “parasitic drag” within the supply chain. We have seen over 90% reduction of email and phone calls related to production order management using tools such as this which specialize in supply chain visibility.

Savings in Ocean and Domestic Transportation Cost

It is very possible and desirable to find a 3PL relationship that will leverage cooperative buying power to save dollars and days. The relationship can provide valuable insight into the murky world of ocean transport. It can help mitigate arbitrary price increases, or, on the other hand, as in the case of the last two years, make dramatic inroads creating savings in a much more dynamic RFQ environment.

There may also be consolidation possibilities. Rather than shipping 20s and LCL freight can be consolidated in country of origin and shipped to a common destination. Another instance of an opportunity for a company to focus on core competencies while the 3PL becomes responsible for transportation management and sourcing.

Report Card

It is very important to have a weekly report card that asks important questions and defines the health of the relationship. This will quickly frame and define expectations of the relationship. A must is the  importance of 3PL staff and certainly PM face time with the customer.

The 3PL PM should be expected to visit operational headquarters of the customer with appropriate frequency.  The idea being of course to create a true extension of the business and a synchronous and harmonious relationship. Such visits make it possible for all stakeholders to become involved.

One great idea is for the PM to visit the client during trade or market weeks to interact with sales staff and get closer to the end customer. We have often found it is possible to leverage the retail success of Komar to help a KDS 3PL customer gain traction with retailers. Yes, a good 3PL provider can provide competitive advantage by opening doors.

A 3PL provider may provide other unexpected but welcome synergies:

• Sourcing
• Operational help in Areas other than traditional supply chain areas.
• A willingness to share extensive network of support, contacts and ideas

Sometimes the take-away is knowing what is possible and achievable.

I hope this has been a compelling and provocative overview.

Jay Harris
President
Komar Distribution Services.

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