UTi Integrated Logistics

Every last detail┬áKeith Regan learns how UTi Integrated Logistics avoids having its services viewed as a commodity by paying attention to details, investing in technology and understanding customer needs so well it can anticipate whatÔÇÖs coming next. Increasingly, businesses have come to view their supply chains as a potential competitive advantage. For many, the best way to leverage that advantage has been through outsourcing warehousing and transportation logistics to third parties.  UTi Integrated Logistics, which is headquartered in Columbia, South Carolina, has benefited from that trend and now operates warehouses and distribution centers for some of the top brands in the United States and beyond. UTi Integrated Logistics is part of the UTi family of companies, which provides a host of supply chain management and transportation solutions to clients worldwide. Like every corner of the economy, UTi has seen its business significantly impacted by recession. ÔÇ£As a third-party logistics provider, our revenues are generated by a clientÔÇÖs activity and sales, and as their businesses are down in this economy, it forces us to examine how we can continue to maintain the level of service we always have and not become a commoditized product,ÔÇØ says chief operating officer Gerald Perritt. ÔÇ£WeÔÇÖre constantly asking how we can create client loyalty in this environment. Our clients are nervous, and we understand that. We can help them by being proactive and finding ways to contain their costs and help them adjust to different realities in the marketplace.ÔÇØ The best answers to how to help clients often lie in a continued quest for operations excellence, Perritt says, with the company constantly preaching continuous improvement and embracing technological enhancements to its distribution centers and warehouses that enable increased accuracy, reduced lost inventory and overall efficiencies that allow it to keep its customersÔÇÖ costs down. ÔÇ£ItÔÇÖs all about connecting with our customers to understand their needs. Many times that means engaging in continuous improvement projects specific to that customer,ÔÇØ he adds. For instance, UTi worked with an electronics client to improve its customer compliance rates, which resulted in reducing costs associated to charge-backs. In other cases it might mean being part of a world-class manufacturing program, implementing vendor-managed inventory systems, or being part of a just-in-time delivery program. That also means being in the forefront of changes when it comes to using information technology, with many distribution centers radio frequency enabled and the company now exploring the potential of voice-automated picking systems in some locations. In many cases, UTi leverages a clientÔÇÖs own warehouse management system, though it uses a WMS from Infor in other settings. Underneath it all is a belief in creating results that can be measured, Perritt says, with the company willing to set targets for cost savings, productivity improvements, or improved quality and then working hard to achieve them while tracking it closelyÔÇöand sharing all that information with clients. ÔÇ£One of the things we feel differentiates us is an intensive discipline to metrics.ÔÇØ That reaches down to the 4,000-plus employees, who are constantly being directed to look at key performance indicators (KPIs) to evaluate how well they are doing. ÔÇ£We make sure we develop KPIs that are relevant to the client and aligned with what weÔÇÖre doing on all levels, and then communicate that to everyone in the organization and back to the client.ÔÇØIn addition to specific improvement programs on behalf of clients, UTi leaders continue to challenge themselves to identify ways to improve operational excellence within the distribution centers. The company has identified centers of excellence and uses a scorecard to evaluate 16 essential elements of operations excellence so that the rest of the company can learn what those top performers are doing differently. ÔÇ£WeÔÇÖre a people business, so it all starts with the people,ÔÇØ Perritt says. ÔÇ£We spend a lot of time thinking about ways to motivate them and to make them feel like they are a part of an organization of consequence.ÔÇØ One of the essential elements of operations excellence is environmental sustainability. UTi is looking for opportunities to use hydrogen-powered forklifts and help clients with expense control through efficiency gains with electric and gas consumption in the facilities.┬á From the formation of safety committees and quality improvement teams to the visual display of KPIs, each center of excellence is broken down into components that can be duplicated elsewhere. ÔÇ£In the best-run facilities, the leadership team is always on top of the metrics, and you can walk in and theyÔÇÖll tell you exactly how their teams performed yesterday and what the targets are for the current day. Additionally, the safest facilities tend to be the best-managed facilities. Our focus on safety will not be compromised.ÔÇØ The effort has helped standardize the various UTi-operated facilities across the country. ÔÇ£If you walk into a building in Chicago or a facility in South Carolina, with the exception of specific client-focused things that we have to do differently, youÔÇÖre going to see a very standardized approach.ÔÇØEven as it seeks ways to weather the economic slowdown, UTi is also positioning itself for the inevitable turnaround. ÔÇ£Right now, weÔÇÖre doing whatever we can to stay in front of clients and stay very visible and very up to date on the changes in their business so that we can anticipate what they will need when the economic situation begins to change again,ÔÇØ Perritt says. ÔÇ£We preach attention to detail constantly, from the floor of the distribution center all the way to the executive offices and in our dealings with clients. ItÔÇÖs the only way to get the results we want and our clients have come to expect. ItÔÇÖs all about attention to detail.ÔÇØRegardless of the health of the economy, UTiÔÇÖs customers expect costs to be held steady or even go down. ÔÇ£Rate decreases just arenÔÇÖt in our toolbox, so we need to be innovative and look to share productivity gains with our clients. WeÔÇÖre constantly preaching improvement but also being careful not to create complexities.ÔÇØ With slower sales, some clients are now finding more of a need for smaller shipment sizes to be pulled, which typically results in higher labor costs. UTi has worked with some clients to re-engineer warehouses to make case picking more efficient and passing savings on to clients, where applicable. ÔÇ£We want to keep it simple and do what we do as efficiently as we can.ÔÇØ  ÔÇô Editorial research by Joe Louis┬á