A week, 10 days, two weeks ... conventional wisdom says that's the norm for moving freight from the United States and Canada into Mexico. Years of stories about delays, corruption, and incompetence—some true, some apocryphal—have led many shippers to assume there's nothing they can do to improve southbound transit times.

But not every shipper thinks that way. About five years ago, Denso Manufacturing Tennessee, an automotive components manufacturer, decided to tackle the transit-time problem. By working with its service providers to map out the entire shipment process from U.S. origin to Mexican destination, Denso not only discovered why its shipments were taking so long but it also was able to eliminate the cause of those delays. As a result, the company has cut both door-to-door transit times and safety stocks of inventory by about 70 percent while realizing double-digit savings in some areas.

Denso Manufacturing Tennessee Inc. is a subsidiary of Denso Corporation, headquartered in Kariya City, Japan. Denso is a "Tier 1" supplier of automotive electrical components, with annual worldwide sales of US $18 billion. It has 12 facilities employing more than 10,000 people throughout North America. The company provides the world's major auto makers with such products as dashboard instrument cluster panels and electronic sensing and control mechanisms for brakes, fuel injection, and cruise control.

The Maryville, Tenn., subsidiary is charged with coordinating the movement of parts and components from the United States and Japan to plants in Mexico, as well as managing shipments of finished goods from Mexico to Tennessee. There, products are consolidated for delivery to customers throughout North America. Denso ships about 16 truckloads a week between Tennessee and Mexico, and will soon increase that to 20 loads weekly.

Until 1995, the Tennessee operation provided all of the finished goods, most of them assembled from parts imported from Japan, for its customers. That year, Denso opened a manufacturing plant near Monterrey, Mexico. Maryville continued to purchase parts and components from suppliers in Japan and North America, consolidated them in Tennessee, and shipped them to Monterrey. But customers wanted to take ownership of orders in the United States, so the Maryville facility also took responsibility for bringing finished goods back from Mexico.

Meeting customers' schedules was no easy task. Transit time from Maryville to Monterrey via Laredo, Texas, was running five days "at best" and delivery times were inconsistent, recalls Paige Rose, Denso Tennessee's assistant manager, transportation and North American integrated logistics. As a result, the company had to keep at least five days' worth of parts and finished-goods inventory in both Tennessee and Monterrey. That conflicted with Denso's Just-in-Time (JIT) operating philosophy and raised operating costs. "When we started looking at the value of the components and finished goods, it was quite an expensive inventory proposition," she says. "We had to do something to control inventory-carrying costs." Holding that inventory also posed a space problem, since the Maryville facility was designed for cross docking and had little room for storage.

Rose, logistics center manager Lanae Keith, and their colleagues considered other transportation options, but realized that more reliable truckload service would be the best choice. They decided that the only way to get better service would be to investigate why transit times to Mexico were so long and inconsistent. By doing so, they hoped to identify and solve whatever problems were behind the costly delays.

The first order of business was to map out each step involved in moving a shipment from Maryville to Monterrey. Rose and Keith started by looking at Denso's own processes for documenting and preparing loads for shipment. Rose then traveled to Laredo to observe how shipments were being handled by the motor carriers, the freight forwarder, the Mexican customs broker, and customs officials—a step that was critical to the success of the project. "You really have to go and physically see and experience what's happening to get the full picture," she says.

What Rose saw surprised her. For one thing, Segrove International, the freight forwarder chosen by Denso's parent company, was receiving little or no advance notification of shipments. "They were having to wait until the truck got there to match the invoice and the packing list to the shipment. It was all manual," she recalls. Segrove's staff also was recreating some of Denso's documentation by hand.

Another surprise: The forwarder was unloading every southbound trailer at its Laredo warehouse, verifying the contents against the packing list and commercial invoice, and reloading the goods into another trailer. This common practice is supposed to ensure that Mexican customs brokers, who are legally responsible for the accuracy of shipment information, provide correct documentation to Mexico's customs authority. The forwarder (usually the Mexican broker's sister company) does not release shipments for the border crossing until all Mexican customs formalities have been completed.

To help Segrove complete its tasks more quickly, Denso began electronically transmitting shipment details and documents to the forwarder, first by e-mail and later by electronic data interchange (EDI). Denso also created a database of predetermined descriptions and customs classifications for every item it regularly shipped to Mexico—"a massive project" that allowed the freight forwarder to create accurate customs documents prior to a shipment's arrival, says Rose.

Although the forwarder's practices clearly were contributing to the delays, Rose knew there was more to the story. Denso therefore expanded the process-mapping initiative to include motor carriers on both sides of the border.

The company had been using more than a dozen U.S.-based truckload carriers, but included only Joplin, Mo.-based Contract Freighters Inc. (CFI) in the project. CFI not only had the best on-time performance and the largest network of equipment and partners in Mexico, but it also had previously participated in a similar initiative with another customer.

With CFI acting as facilitator, Denso held a series of meetings in Laredo for all of the U.S. and Mexican service providers, including local cross-border drayage companies hired by the freight forwarder. First, each presented a step-by-step "walk through" of the activities it performed on Denso's behalf. In the next step, participants "dissected every component of every transaction," says Gary Nichols, CFI's director of business development.

Mapping out each party's processes in chronological order identified the sources of many inefficiencies and bottlenecks. More importantly, says Nichols, it helped everyone understand how each party's actions impacted others in the supply chain.

The final step was to redesign processes to maximize speed and reliability. Based on the group's recommendations, for example, Denso changed the way it loaded trailers. "Before, we didn't really understand that [Segrove] had been unloading every single box off the trailers," Rose says. "When we just randomly stacked stuff on pallets, it was a nightmare for them." Denso standardized pallet configurations and stopped shipping mixed pallets to Mexico, making it possible for the forwarder to accurately identify and count items without breaking pallets. That change, together with electronic transmission of shipment data, eliminated about 48 hours of time at the border, Rose says.

Transportation was another area where meeting participants made changes. They agreed that some service providers' failure to understand the JIT environment and the importance of on-time delivery led to excessively long transit times. The lack of a predictable schedule and the involvement of too many carriers, including a constantly changing cast of cross-border drayage companies, also caused delays, says Nichols.

To address that situation, participants recommended choosing a single provider for each leg of the journey. The shipper selected CFI, a local cross-border drayage company associated with Segrove, and Mexican truckload carrier HG Transportaciones.

Each of those providers was required to dedicate a certain amount of equipment and assign drivers exclusively to Denso's business. Rose and her colleagues, in fact, interviewed CFI's drivers themselves, gauging their willingness to adhere to strict standards and consulting them about routing and scheduling.

The group also established standard departure and arrival schedules, the amount of time allowed for each activity along the way, procedures in case of emergency or delay, and lines of communication and authority. Each party, including the local drayage company, was required to report every transaction to a dedicated area of CFI's Web site so that everyone could track the status of each shipment.

The benefits of dedicated resources and standard procedures quickly became clear. For the first time, the forwarder, customs broker, and motor carriers knew in advance what would be coming and when it would be ready for pickup. Equipment was always available when shipments were ready to move, and drivers knew exactly what to do and when to do it. Denso's business became a major source of predictable revenue for all of the service providers. And better communication helped boost efficiency and cut costs for all involved.

These days, Denso's shipments move like clockwork. Thanks to predictable timing, the Mexican truckload carrier no longer needs to drop Denso's trailers at its Monterrey terminal. Instead, drivers deliver southbound trailers directly to the factory and exchange them for northbound loads, cutting out extra handling and reducing the trucker's costs. "One driver can now do the round trip between Monterrey and Nuevo Laredo in just eight hours," Nichols says.

Transit times from Maryville to Monterrey have been slashed to just 48 hours from more than four days, and on-time performance is nearly 100 percent. Says Rose: "We went from a weekly Monday departure from Maryville and arrival in Monterrey late Friday at best, to leaving here Monday morning and arriving in Monterrey Wednesday morning." As a result, the Maryville facility now needs only enough inventory for a day and a half.

The benefits have been so impressive that Denso is extending the program to shipments between its plant in Battle Creek, Mich., and Monclova, Mexico, this time with CFI and Laredo-based forwarder and customs broker Daniel B. Hastings Inc. Rose expects that the resulting efficiencies and cost savings will lead Denso to shift more manufacturing from Asia to the United States and Mexico.

None of this would have been possible without on-site observation and face-to-face meetings with every party in the supply chain, Rose says. Clear communication and a willingness on the shipper's part to listen—and take action on providers' recommendations—were among the most important factors in the program's success, she adds. "Now, nobody's working against each other," she says. "We're all partners working toward meeting the same needs."