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Movers and shakers: Utah manufacturers deliver the goods. (Manufacturing & Distribution).

MANUFACTURING AND DISTRIBUTING

consumer products is big business around the world, and several Utah companies are leading the way in our own market by developing innovative solutions to getting products to retailers' shelves as fast and cost-effectively as possible. From mechanization of processes to physical distribution, these Utah companies are setting the pace for others to follow.

Automation

Since the Industrial Age, companies have relied upon the speed and efficiency that mechanized systems can provide. Utah-based SK Daifuku has been designing and installing state-of-the-art automated material handling systems for companies around the world since 1937, and the company recently introduced the latest in small items sortation technology, the Piece Sorter, which allows for the widest range of product sizes and shapes to be sorted quickly and efficiently while keeping space efficiency at a maximum. David Janke, vice president of sales and marketing for SK Daifuku, explains, "In today's environment, companies compete more on customer service, quality and time to market than they do on the actual product itself, so automation helps with that in a great way."

Janke continues, "One of the trends throughout the United States and the world is that companies are recognizing that distribution of the product is becoming a core competence, and they are differentiating themselves from their competitors through their distribution expertise." This differentiation is exemplified by one of SK Daifuku's large clients, Dell Computers, which builds and ships a completely customized computer for a customer in just two hours after the order has been placed. "We have provided the distribution automation for most of Dell's facilities in Texas and Tennessee," Janke says. "We like to tell our customers that there's no Dell computer shipped that hasn't touched our equipment somehow"

In addition to distribution automation, factory automation (which involves the actual mechanized building of products) offers a way to reduce costs by lowering headcount, but mainly, it results in improved quality of manufactured goods. "A company would consider using factory automation or distribution automation as a way of reducing their costs and time to market, as well as improving their quality, customer responsiveness or accuracy," says Janke. "Even if the automation doesn't result in a reduction in people, it often leads to a dramatic improvement in accuracy of inventory management, goods shipped to the customer, response time and cycle time."

Many of SK Daifuku's systems are now used by Utah customers such as the LDS Church's distribution facility, O.C. Tanner, the Alcohol and Beverage Control Commission, Utah State University and ARUP.

Janke sees one other trend affecting businesses like SK Daifuku. "Companies are having to ship more orders but in smaller quantities because every order is customized to the individual level." This trend, he believes, speaks to the need for greater automation in the distribution supply chain.

One-Stop Shopping

A process increasingly being utilized in manufacturing and distribution involves "vertical integration." Grandway USA, a Utah company founded in 1998, manufactures and supplies mass-market consumer products to retail businesses and distributors through vertical integration. Dale Gledhill, president of Grandway USA, explains, "Vertical integration means that you really control the product from manufacturing all the way up until it reaches retailers' shelves. For example, a wholesaler is not vertically integrated because they just buy items from someone who makes a product and then resells it. Grandway USA actually makes the product and takes it all the way to the store."

Some of the items the company produces include general merchandise such as markers, pens, batteries and flashlights, and housewares including drawer and cabinet organizers. Additional items include one-time-use cameras, film, photo albums and phone accessories. Once Grand-way USA has manufactured the products, the company then distributes these items to retailers. "Our focus is going after the major chains," Gled-hill says. Lowe's, Wal-Mart, Bed Bath & Beyond, Target and Auto Zone are just a few of the chains served by Grandway USA.

Grandway USA has just finished building a new factory in Honduras that will allow the company to implement additional quality control factors. This new factory will give Grandway USA total control over their products. "We won't be at the merry of anyone else's schedule," Gledhill states. "It will allow us to forecast better because we control the order process."

Delivering the Goods

Salt Lake City-based less-than-truckload carrier Motor Cargo has been delivering dry and temperature-controlled goods throughout the West for over 80 years. In addition to three logistics centers (in Fontana, CA, Las Vegas, NV, and York, PA) that facilitate consolidation, distribution and warehousing services to help customers meet all of their distribution needs, Motor Cargo transports freight between 50 cross-dock facilities throughout the 10 Western states. In addition, MC Distribution Services, a subsidiary of Motor Cargo Industries, provides order fulfillment, labor management and integrated warehousing/transportation/logistics services designed for many budgets. This combination of services sets the company apart from competitors in many ways -- from the customer's ability to track their shipments and place pickup requests online to having more than 1,800 employees dedicated to quality service to a state-of-the-art supply chain.

Kevin Avery, vice president of yield management, explains, "Motor Cargo breaks the mold of a traditional trucking company We have a culture of quality from the moment someone arrives."

Now, with the company's recent purchase by Union Pacific, Motor Cargo can offer even more extensive distribution solutions. Furthermore, Kathryn Blackwell, Union Pacific's media relations representative, explains that the purchase of Motor Cargo benefits Union Pacific's trucking operations by furthering the company's long-range transportation plans.

Heather King is the writing manager for an international nutrition company.
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Title Annotation:Grandway USA, Motor Cargo Industries, SK Daifuku
Author:King, Heather L.
Publication:Utah Business
Geographic Code:1U8UT
Date:Apr 1, 2003
Words:925
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