With a large contract with the General Motors Assembly Plant in Fairfax serving as a strong beachhead, Comprehensive Logistics Inc. now wants to expand its service offerings to other manufacturers in the Kansas City area.
In July, the third-party logistics provider opened a 227,000-square-foot facility in a 513,000-square-foot building at 5300 Kansas Ave. in Kansas City, Kan. Since then, the operation has grown to 319,000 square feet and 57 employees.
Comprehensive Logistics receives, stores, picks, sorts and repacks parts from more than 130 suppliers worldwide and delivers about 39 shipments a day to the local GM plant to produce the Chevrolet Malibu and the Buick Lacrosse, two of its most popular vehicles.
“We pick it according to a broadcast, which consists of the order in which cars emerge from the Fairfax plant paint shop, the first known point where the final sequence of their assembly line is known,” said Brian Hume, senior vice president and general manager of Comprehensive Logistics, which is based in Youngstown, Ohio. “So minute by minute, at the pace their line is moving, that signal is sent to us. We pick the next job that is specific to that car. So if it’s a green car, we pick a green part and then place it in sequential order within racks that are shipped on a just-in-time basis directly to the point of use in their plant.”
Roger Woody, executive lecturer on supply-chain management at the University of Kansas School of Business, said many manufacturers embrace this type of logistics outsourcing because it saves money on inventory and storage space. It also allows the manufacturer to focus more on production.
“Comprehensive Logistics operates right in the sweet spot of need for those services,” Woody said. “The value point is it means the manufacturer has very little inventory in the factory, and inventory can be a huge cost factor. There is a cost not only in the value tied up in inventory but in labor to put it away and take it out. For many industries, that carrying cost can be anywhere between 25 and 40 percent of the value of a product. So that can be huge.”
Tony Monaco, the third-party manager for General Motors, said there is also an efficiency value: Employees can focus solely on putting parts on cars. Monaco said Comprehensive Logistics also does subassembly of multipart components such as brakes, suspension, axles, etc.
“They have the ability to do subassemblies for us and then ship those parts through just-in-time delivery,” Monaco said. “When it reaches the operator, he just pulls the parts and puts them right on the car. So the operator doesn’t have to chase all over the place looking for parts. They just turn around, and the part is right there, all ready to go.”
The Fairfax contract brought Comprehensive Logistics to Kansas City, Hume said, and the company has spent all its time to date ensuring a seamless launch. With that goal checked off, the company plans to conduct a big marketing campaign to find additional clients in the area. The first step is hiring a commercial rep to focus on marketing and reach out to other manufacturers that can benefit from the value-added services.
“Kansas City is a regional transportation hub, and we now have an operation to show perspective clients,” Hume said. “There are some very prestigious accounts who are known to outsource. We’ve looked at several in the area.”
Hume said targets could be involved in automobiles, motorcycles, yard equipment, marine equipment, trucks, buses, toys, appliances, industrial goods, electronics or anything that is assembled.
Woody said the challenge is to find companies comfortable with the close partnership required to make the relationship work. Clients need to share numbers and production forecasts, and some don’t like doing that.
“There are opportunities for almost any sized company to benefit from their services,” Woody said. “The real key is that it has to be a solid value proposition. They’ve either got to save labor, reduce inventory, improve efficiency or reduce transportation costs.”
Comprehensive Logistics generally targets companies exceeding $20 million in annual revenue, though it will look at any company that ships and receives.
“When we get deeper into the Kansas City market, we won’t just be selling warehousing,” Hume said. “We’re selling transportation management as well. We’ve got an anchor client in the automotive world, which is extremely demanding, with stringent standards for just-in-time operations, visibility, metrics and all that kind of stuff. It really shows prospective clients what we’re capable of.”
GM’s Monaco said one of Comprehensive Logistics’ greatest strengths is its operation monitoring systems.
“They probably have some of the most advanced systems I’ve seen in the business,” Monaco said. “Their systems watch our inventories and make sure they are correct. We ship directly to them, and they serve as the gatekeeper of our supplies, so we rely heavily on them. It’s a partnership, and they have an excellent team.”
James Dornbrook reports about banking, financial services, manufacturing and sports business for the Kansas City Business Journal. Contact him at jdornbrook@bizjournals.com or 816-777-2204. Read his blog postings at KCBizBeat or follow him on Twitter.