Third-party logistics provider handles the details so Multiquip can focus on the primary goal — serving the customer.
"We've always been a very service-based company," says Terry Blomgren, Supply & Distribution Manager for Multiquip, one of the world's leading manufacturers and distributors of light- and medium-sized construction equipment. "It used to be that our singular focus was to take care of our customers. A lot has changed in the 30-plus years we've been in business, but we want to keep the same focus." To do that – and accommodate the company’s significant growth – Multiquip chose to outsource many of its logistics functions, so the company could focus on its core competency.
Of course, Multiquip chose its logistics partner carefully. The company needed a 3PL that could handle special requirements and help Multiquip to advance its service level by incorporating Automatic Data Collection (ADC) and RF technology. "Our business depends on being able to have the right product in the right place at the right time at the right price," Blomgren says. "Saddle Creek enables us to do just that."
The Business Challenge
The decision to outsource didn’t happen overnight at Multiquip. The company experimented with operating its own warehouses and coordinating consignment programs but found that its service level often was suffering as a result, particularly in the southeastern United States. The wrong products frequently were shipped, serial number reporting was compromised, and deliveries were recorded inaccurately. Multiquip recognized that the company's tradition of service was at stake and decided to explore additional options in the Southeast.
However, finding an alternative logistics solution wasn't easy. Multiquip has an extensive product line – generators, rammers, rollers, plate compactors, light towers, dewatering pumps, welders, concrete installation equipment and more. To complicate matters, many of the products come in unusual shapes, sizes and packages, and some need mechanical alterations before final shipment (switching tires or rollers, unstacking units that are double stacked at the point-of-origin, etc.).
In addition, the company wanted to take its technological capabilities to the next level. "Plans for advancing our technology made it especially critical to find a partner with the right experience," Blomgren says.
The Solution
Since the partnership began, Multiquip has found real value in Saddle Creek's capabilities. "Putting things in the hands of someone who can manage things better has really helped resolve some problems," says Blomgren. "We've had fewer customer complaints, our warehouse problems due to human error have gone away and our service to our customers has improved since we brought Saddle Creek on board."
The results can be attributed primarily to three key areas:
Facilities and capabilities. As a national company providing warehousing, transportation, and integrated logistics nationwide, Saddle Creek is well-positioned to accommodate the volume and variety of Multiquip's shipments as well as the special requirements for many of its products.
Currently, Multiquip is using Saddle Creek warehouses in North Carolina, Florida and Texas, but, if business warrants, Multiquip could take advantage of Saddle Creek's extensive capabilities at other facilities.
Saddle Creek is also equipped to handle Multiquip's special shipments. For example, when mixers arrive double-stacked and bolted together with an angle iron to save on freight costs, Saddle Creek personnel take them apart. Or if a concrete buggy has pneumatic tires but the customer prefers foam-filled tires, they are switched out at the Saddle Creek warehouse. By modifying existing inventory rather than manufacturing new products, Multiquip can save on production and shipping costs.
"A lot of third-party logistics companies can't or won't do that. Saddle Creek can and will," says Blomgren. "It really boils down to service level. History has shown that we can convey to them our expectations, and they will deliver results."
Advanced Technology. Saddle Creek's technological expertise is also valuable. Saddle Creek is able to operate off of Multiquip's SAP system. Thanks to Saddle Creek's experience in ADC, Multiquip was able to roll out that capability sooner than expected in North Carolina.
Saddle Creek's proven RF technology capabilities have also had an impact.
"Saddle Creek gives us real-time forecasting capabilities. We don't have to wait for data migration or transition." says Blomgren. "If we're short on a product that we manufacture, we can adjust the production cycle. If it's something we distribute, we can place a purchase order. If we're lean in one warehouse, we can track where the product should have shipped from and correct the problem. It enables us to have the right product at the right time."
Fresh ideas. Saddle Creek's commitment to doing "Whatever It Takes" really shines through in the company's service to Multiquip. "Even if it's not a standard practice, they can figure it out and do it at a reasonable cost," explains Blomgren. "They also come to us with questions and comments that help us improve our facilities and provide better service to our customers."
A deceptively simple example springs to mind. Customers routinely called Multiquip with questions about a mixer that ships with an attached hitch. The pick ticket calls out for two items even though they are assembled as a single unit, and customers mistakenly believed that they were missing a piece. Saddle Creek helped eliminate the confusion by suggesting that they add a sticker to bills of lading to clarify how many pieces customers should expect to find.
"We could have come up with a solution if we thought about it long enough," Blomgren says. "But the point is that we didn't have to. Saddle Creek did the thinking for us."