A 3PL's Battle with Commoditisation -- Menlo's Solution

AMSTERDAM and SAN FRANCISCO, Nov. 25, 2013 /PRNewswire/ -- Gunn, Menlo's Managing Director in Europe, was also at pains to explain that a focus on reduced costs in the supply chain need not be at the expense of innovation; rather that the latter can drive the former through the use of a structured, continuous improvement programme.

Menlo, the global logistics and supply chain management unit of Con-way Inc. (NYSE: CNW) offers supply chain and transportation management services as well as 3PL and 4PL logistics solutions to a large number of companies in a variety of vertical sectors across the globe. However Gunn drew on his company's experience with a leading medical technology supplier to help answer the question, "How can the 3PL industry profitably innovate and win the battle against commoditisation?"

Gunn noted that many 3PL/shipper engagements are tactical rather than strategic. "Often shippers, in the main driven by their procurement functions focussing on cost reduction, make short-term choices based on volatile market demands. In the process they lose sight of greater efficiencies that can transpire from longer-term commitments to a logistics supplier," he noted and proposes a switch in focus from cost to quality and innovative relationships.

The Menlo executive outlined a value-driven supply chain transformation concept that, in his company's case employs the Lean methodology to achieve a culture of continuous improvement that unites shipper and 3PL in a mutual optimisation exercise. This method empowers employees of both parties to make beneficial changes to the supply chain process.

In the case of the medical technology client, it was revealed that such an approach produced supply chain savings of 16% in warehouse costs over a 24-month period. In Global Forwarding Management some 56% and 10% cost reductions were achieved across two logistics scenarios, respectively. The same analysis saw KPI performances of over 99% when measuring "ship on time," receiving and inventory accuracy functions. There were corresponding innovations in warehouse design and supply chain optimisation. The latter featuring shipment consolidation, improved planning to remove redundant transport legs and more efficient mode utilisation.

About Menlo Worldwide Logistics Europe
In Europe, Menlo Worldwide Logistics maintains 17 dedicated and multi-client logistics centres located in the Netherlands, Belgium, Czech Republic, Germany and the United Kingdom. This warehouse network can serve as pan-European distribution solution using one or several facilities.

Supply chain and transport management solutions as well as 3PL, warehousing and distribution services are offered to a variety of vertical industry sectors including: fashion & apparel; healthcare and medical equipment; hi-tech electronic and data network equipment; automotive; defence and government services and retail e-fulfilment. The European headquarters is at the multi-client Amsterdam Distribution Centre in the Netherlands. www.menloworldwide.com/europe

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About Menlo Worldwide Logistics
Menlo Worldwide Logistics, LLC, is a US$1.7 billion global provider of logistics, transportation management and supply chain services with operations in five continents, including North America. As a third-party logistics provider, San Francisco-based Menlo Worldwide Logistics' services range from dedicated contract logistics to warehouse and distribution management, transportation management, supply chain reengineering and other value-added services including packaging, kitting, order fulfillment and light assembly through a strategic network of multi-client and dedicated facilities.

With nearly 20 million square feet of dedicated warehouse space in North America, the Asia Pacific, Europe and Latin America, and industry-leading technologies, Menlo Worldwide Logistics creates effective, integrated solutions for the transportation and distribution needs of leading businesses around the world. Menlo Worldwide Logistics, LLC, is a subsidiary of Con-way Inc. (NYSE: CNW), a $5.6 billion diversified freight transportation and logistics company.

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SOURCE Menlo Worldwide Logistics