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What do logistics companies do? Here are some examples of the solutions supply chain companies provide to their customers.

Logistics companies can help move mining machinery and parts from a factory in Europe to a warehouse in Chile so they can be stored there and shipped quickly to a Chilean mine that desperately needs a spare part.

They can work directly with a pharmaceutical manufacturer, overseeing the packaging of delicate vaccines or medicines, transporting them from factory to airport, moving them through export inspection (without having packages opened and contaminated, and placing them on a plane. The supply chain company then retrieves the shipment at the destination, moves it through customs and delivers the merchandise to a Local distributor or hospital. Throughout the process, the merchandise is kept in temperature-controlled environments (cold chain).

WHERE'S MY MASK? A company in Mexico that makes Halloween masks contacted UPS with a problem: The company successfully produced colorful masks for Mexico's extremely popular Dia de los Muertos, but it wanted to expand its sales to the United States (for Halloween) and to Europe and Latin America (for Local versions of Carnival).

The company was not familiar with export/import regulations, international shipping or delivery services in different countries. It also had experienced problems with shipping time that averaged 30 days to some external markets, making it difficult to adjust production and inventory if a shipment was lost or delayed. If a shipment did not arrive on time, for example, the Mexican company had to produce more masks or dip into existing inventory and ship the products again. This raised costs, caused long delays and angered customers.

UPS designed a proposal that used its knowledge of border crossing, international shipping and delivery times in different markets, It recommended use of UPS standard delivery in the foreign markets, an economical alternative. When the Mexican company began using UPS, average shipping time was cut from 30 days to seven days, transportation costs were reduced, and the Location of shipments was visible from start to finish.

LET THERE BE LIGHTS: DHL Global Forwarding signed a contract last year to move 1,000 20-foot containers of lamps and fixtures from Asia and other locations to Brazil. The Brazilian buyer needed the merchandise--an enormous order with some pieces in small quantities and others in full containers--within a strict time frame.

DHL moved the merchandise from sites in Asia to the Port of Santos, arranged all the details for customs and contracted with local trucking companies to move the containers from the port to several distribution centers. DHL's Israel pointed out that each step of the process had to be planned carefully in advance and monitored.

"If you use direct shipping and the fastest vessel, you lose the advantage if customs breaks down" because of improper documentation or other issues, Israel said. DHL also had to deliver the merchandise in two modalities--full containers to some locations and smaller shipments to other destinations. By using the company's experience and expertise, lead time was reduced by three to five days, Israel said.

WORLD CUP CHALLENGE: Nike selected Brazil as one of its focus markets among emerging economies, and the company needed to ship large quantities of apparel, footwear and equipment each time it changed its product lines--every three months. Nike also needed to remove unsold merchandise quickly from retail stores and move it to Nike outlet stores as the new stock arrived.

Nike coordinates each launch on a worldwide basis, so timing is crucial. Some of the products are made in Brazil, and others are imported. Some merchandise was delivered to warehouses of large retail chains, and some went directly to stores.

Working with Nike, DHL Supply Chain built an enormous, specially designed central warehouse using DHL's experience in transport, storing and delivering time-sensitive fashion goods internationally.

The warehouse had a large number of doors for loading and unloading, interior storage areas designed for Nike's different products and workers who were specially trained to work with this particular warehouse system. The warehouse also was built so it could be rearranged internally to accommodate different types of seasonal merchandise and different volumes.

DHL also applied its own management practices to the local transportation companies that moved Nike merchandise. By partnering with DHL, Nike was able to meet 100 percent of its World Cup marketing goats, Nava said.
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Author:Mann, Joseph A., Jr.
Publication:Latin Trade
Date:Mar 1, 2012
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