Executive Briefings

A Partnership That Deepened With Time

It took more than 10 years for the supply-chain partnership of Lucent Business Communications Systems and GeoLogistics to evolve into its current form.

GeoLogistics began by performing traditional freight forwarding for Lucent BCS, which makes telephone systems for businesses around the world. In fact, GeoLogistics was one of several freight forwarders that the company used, basing its choice on pricing and shipment characteristics.

Gradually, GeoLogistics took on a broader range of services for Lucent, culminating in sharply reduced inventories, transportation costs and delivery times. And the partnership continues to deepen.

Change has been the hallmark of both companies in recent years. Lucent BCS is a unit of Lucent Technologies, formed in 1996 when AT&T spun off Bell Laboratories, its research and development division, along with the parent's systems and technology units.
Now one of 11 business units of Lucent Technologies, Lucent BCS is headquartered in Murray Hill, N.J. Customers range from small shops to hotels and Fortune 50 companies in need of integrated systems.

Golden, Co.-based GeoLogistics was born in 1998. Previously known as International Logistics Ltd., it was formed when the investment group of William Simon & Sons merged three forwarding and logistics entities: Bekins Van Lines, LEP International, and Matrix International. LEP was GeoLogistics' predecessor on the Lucent BCS account.

GeoLogistics got its first crack at providing value-added services to Lucent when the customer asked it to create an expedited surface network, according to Darryl Barker, the 3PL's vice president of business development. Lucent needed to move large pieces of equipment that could only fly on freighters operated by expensive integrators. The obvious alternative, assuming GeoLogistics could move the product fast enough, was over the road.

When problems crop up, "you need to look at them objectively, and mutually go after them without finger-pointing."
- Rick Forti of Lucent BCS

From there, GeoLogistics went on to add such services as direct delivery to the end customer with inside placement, and a merge-in-transit (MIT) program that creates complete orders out of shipments with multiple origins. Under the MIT program, GeoLogistics blends items from Lucent's manufacturing centers in Denver and Shreveport, La. with material from outside vendors, then ships the consolidated lots to Lucent's field offices. By relying on a single provider to handle its shipments nationwide, Lucent simplifies the order-tracking process.

GeoLogistics works closely with local installation teams to surmount potential problems such as narrow stairways and high-rise buildings. "It's like a customer-service value added on at the end of delivery," said Rick Forti, now Lucent BCS's director of manufacturing and logistics.

The shipments are monitored every step of the way by GeoLogistics' proprietary information systems, which provide line-item detail. The data they gather in the course of handling can then be used to create daily performance reports by region.

Distribution services under the Lucent contract, which covers the entire United States, include pick-and-pack, inventory control and freight forwarding of export shipments. In Little Rock, Ark., GeoLogistics supports Lucent's repair and returns facility, providing material to a network of maintenance stocking locations around the country.

GeoLogistics also maintains warehouses in the United Kingdom and the Netherlands, through which Lucent distributes product overseas. The Netherlands facility services Lucent customers in Asia, the Middle East and Africa. A distribution center in Miami acts as a jumping-off point for Latin America.

Further enhancements in Lucent's supply chain will come as it completes installation of enterprise resource planning (ERP) software from SAP America. That will allow for the monitoring of order entry, manufacturing and warehousing. Both shipper and vendor will be able to track customer orders all the way from shop floor to installation, on a real-time basis.
Benefits of the partnership to date have been significant. The MIT program, with its emphasis on reducing redundant stock, has led to nearly $8m in inventory savings since its inception. Installation costs have been cut by nearly $3m a year through better coordination of all materials required in the field. In some cases, delivery time has been reduced by 10 weeks. Lucent also has seen overall reductions in product cycle-time from direct shipments to installation sites, and in transportation costs through more efficient routing and flexible delivery schedules.

To Forti, a partnership occurs when both parties have a common understanding of the supply chain and how to improve it. When problems crop up, as they always will, "you need to look at them objectively, and mutually go after them without finger-pointing."
Barker names trust as the key factor in any working relationship. But he doesn't see it as developing overnight. As with Lucent BCS and GeoLogistics, the two sides may take years to build a partnership, slowly adding services to the mix, until they reach a level of comfort. Said Forti: "I think it's something you have to learn."

It took more than 10 years for the supply-chain partnership of Lucent Business Communications Systems and GeoLogistics to evolve into its current form.

GeoLogistics began by performing traditional freight forwarding for Lucent BCS, which makes telephone systems for businesses around the world. In fact, GeoLogistics was one of several freight forwarders that the company used, basing its choice on pricing and shipment characteristics.

Gradually, GeoLogistics took on a broader range of services for Lucent, culminating in sharply reduced inventories, transportation costs and delivery times. And the partnership continues to deepen.

Change has been the hallmark of both companies in recent years. Lucent BCS is a unit of Lucent Technologies, formed in 1996 when AT&T spun off Bell Laboratories, its research and development division, along with the parent's systems and technology units.
Now one of 11 business units of Lucent Technologies, Lucent BCS is headquartered in Murray Hill, N.J. Customers range from small shops to hotels and Fortune 50 companies in need of integrated systems.

Golden, Co.-based GeoLogistics was born in 1998. Previously known as International Logistics Ltd., it was formed when the investment group of William Simon & Sons merged three forwarding and logistics entities: Bekins Van Lines, LEP International, and Matrix International. LEP was GeoLogistics' predecessor on the Lucent BCS account.

GeoLogistics got its first crack at providing value-added services to Lucent when the customer asked it to create an expedited surface network, according to Darryl Barker, the 3PL's vice president of business development. Lucent needed to move large pieces of equipment that could only fly on freighters operated by expensive integrators. The obvious alternative, assuming GeoLogistics could move the product fast enough, was over the road.

When problems crop up, "you need to look at them objectively, and mutually go after them without finger-pointing."
- Rick Forti of Lucent BCS

From there, GeoLogistics went on to add such services as direct delivery to the end customer with inside placement, and a merge-in-transit (MIT) program that creates complete orders out of shipments with multiple origins. Under the MIT program, GeoLogistics blends items from Lucent's manufacturing centers in Denver and Shreveport, La. with material from outside vendors, then ships the consolidated lots to Lucent's field offices. By relying on a single provider to handle its shipments nationwide, Lucent simplifies the order-tracking process.

GeoLogistics works closely with local installation teams to surmount potential problems such as narrow stairways and high-rise buildings. "It's like a customer-service value added on at the end of delivery," said Rick Forti, now Lucent BCS's director of manufacturing and logistics.

The shipments are monitored every step of the way by GeoLogistics' proprietary information systems, which provide line-item detail. The data they gather in the course of handling can then be used to create daily performance reports by region.

Distribution services under the Lucent contract, which covers the entire United States, include pick-and-pack, inventory control and freight forwarding of export shipments. In Little Rock, Ark., GeoLogistics supports Lucent's repair and returns facility, providing material to a network of maintenance stocking locations around the country.

GeoLogistics also maintains warehouses in the United Kingdom and the Netherlands, through which Lucent distributes product overseas. The Netherlands facility services Lucent customers in Asia, the Middle East and Africa. A distribution center in Miami acts as a jumping-off point for Latin America.

Further enhancements in Lucent's supply chain will come as it completes installation of enterprise resource planning (ERP) software from SAP America. That will allow for the monitoring of order entry, manufacturing and warehousing. Both shipper and vendor will be able to track customer orders all the way from shop floor to installation, on a real-time basis.
Benefits of the partnership to date have been significant. The MIT program, with its emphasis on reducing redundant stock, has led to nearly $8m in inventory savings since its inception. Installation costs have been cut by nearly $3m a year through better coordination of all materials required in the field. In some cases, delivery time has been reduced by 10 weeks. Lucent also has seen overall reductions in product cycle-time from direct shipments to installation sites, and in transportation costs through more efficient routing and flexible delivery schedules.

To Forti, a partnership occurs when both parties have a common understanding of the supply chain and how to improve it. When problems crop up, as they always will, "you need to look at them objectively, and mutually go after them without finger-pointing."
Barker names trust as the key factor in any working relationship. But he doesn't see it as developing overnight. As with Lucent BCS and GeoLogistics, the two sides may take years to build a partnership, slowly adding services to the mix, until they reach a level of comfort. Said Forti: "I think it's something you have to learn."