Viewpoint: Logistics as a path to the corner office
Events in the NewsState of Logistics 2016: US Business Logistics Costs Slow Considerably with 2.6% Growth Unwrapping the Hidden Value of a Parcel System ATA’s Costello provides outlook on freight economy Q1 intermodal volumes see 2 percent annual gain, reports IANA The future of materials handling is… More Events News
Events ResourceUnwrapping the Hidden Value of a Parcel System The growth in e-commerce sales and omni-channel distribution has forced more shippers to re-evaluate the way they handle parcel shipments.
The editorial staff of Logistics Management (LM) is thrilled to once again have the winner of the NASSTRAC Shipper of the Year Award grace our October cover. For nearly 20 years, LM has partnered with NASSTRAC, one of the leading logistics and transportation advocacy organizations, to fix the spotlight on a savvy logistics operation that has demonstrated excellence in the execution of a strategy designed to advance their company’s business mission.
And this year’s winner, the esteemed pencil manufacturer Dixon Ticonderoga, may be one of my favorite success stories for a couple specific reasons.
First, the story illustrates the complete transformation of logistics and transportation best practices inside a company that got mired in its ways. And second, it shows how a driven, visionary leader can put his knowledge of transportation and distribution to work to not only revolutionize how logistics is managed, but also to propel him into the corner office.
That leader is CEO Timothy Gomez who joined the 218 year-old company as director of distribution center operations a mere five years ago. When Gomez first came on board, he found that the company clearly needed to sharpen its logistics acumen. “It was a nightmare,” Gomez tells Contributing Editor John Schulz. According to Gomez, the company was using too many carriers on inbound and outbound lanes to realize any leverage on rates, distribution processes were outdated, the layout of its primary warehouse was cumbersome, and they were relying too heavily on expedited freight services.
And due to this muddled mix, they were getting hit with fines from retailers due to transportation failures.
Starting on page 28, Schulz walks us through the methodical approach Gomez and the logistics team took to bring Dixon Ticonderoga’s processes into the 21st century. On the transportation side, Gomez got to work to winnow those 15 trucking partners down to four—a group they now call the “core four.”
Gomez and the team then developed a stable and sustainable plan that not only integrated inbound and outbound activity, but also managed supply and purchase orders and aligned them to logistics capabilities. “We have 5,000 different SKUs, and now we know exactly how much we can load and move at any time,” says Gomez.
And at its 200,000-square foot primary warehouse in Macon, Ga., Gomez applied the Lean process to combine the two receiving areas into one to reduce unnecessary movement of product and streamline the receiving process. Today, the entire process requires just 15 people using wireless handheld devices to track thousands of SKUs.
From the first to second year of this transformation, the company achieved $1 million in savings—and that’s grown to $5 million.
While this operation turnaround and savings is impressive in itself, my favorite piece of this story is that the ray of light emanating from the logistics department was recognized and rewarded with the corner office in a short period of time—a rarity indeed.
“This hard-driven, 45-year-old star has a unique perspective on the importance of logistics to the overall financial well-being of the company,” Schulz told me following his interview with Gomez. “And his path to the top can be emulated.”
About the AuthorMichael Levans Michael Levans is Group Editorial Director of Peerless Media’s Supply Chain Group of publications and websites including Logistics Management, Supply Chain Management Review, Modern Materials Handling, and Material Handling Product News. He’s a 23-year publishing veteran who started out at the Pittsburgh Press as a business reporter and has spent the last 17 years in the business-to-business press. He’s been covering the logistics and supply chain markets for the past seven years. You can reach him at [email protected]
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