Electronics firm consolidates cross-border shipments
Staff -- Purchasing, 3/18/2004 2:00:00 AM
With more and more of its shipments crossing borders to overseas manufacturing sites, Phoenix-based electronics distribution giant Avnet was looking for a way to streamline the paperwork required to get shipments exported from the U.S. and imported in other countries. The excess paperwork was always an issue, but the amount of paperwork became even more apparent when the company recently centralized its transportation function and gave Jerry Biegler, director of corporate transportation services, responsibility for monitoring the myriad of cross-border shipments.
The trend worsened as high-tech manufacturers moved more to lean or just-in-time manufacturing models, requiring a higher number of smaller shipments from distributors like Avnet across borders to non-U.S. manufacturing plants. The end result is more paperwork and more cost for the distributor, with little to no added revenue. To even out the margins in this trend, Avnet needed a way to continue making the increased shipments, but cut down the paperwork and processes, most notably to its customers in Canada, where it made the most cross-border shipments per day.
To alleviate the problem, Avnet tapped one of its major logistics partners, UPS, which had begun offering its World Ease service, which consolidates multiple daily cross-border shipments under a single electronic master shipment. Avnet continues its shipping pattern, but does so with less documentation.
"There is a lot of management that has been taken out because we don't have to process all this paperwork manually," says Biegler. "So we can focus on transportation issues and not as much on paperwork. You can also eliminate some labor costs. Normally you would have to put it all in one big box to consolidate shipments, but this system lets you ship individual packages, which are consolidated electronically as they enter a country."
Avnet began phasing in this service in October 2002 and now has more than 1,000 shipments per day consolidated. The consolidated shipments also allow for better pricing breaks.
Currently, Avnet is using the service only for its shipments to Canada, but the increasing volumes going across borders in Europe and Asia have Biegler thinking the service may work in those markets as well.
"We are looking at both Europe and Asia—each provides equal cost savings potential. There are labor savings and cost per country in clearing customs in each country that would be a factor."
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