Executive Briefings

SPECIAL ISSUE: GLOBAL SUPPLY CHAIN PARTNERSHIPS

Vesuvius U.K.: Demanding Customer Builds Global Supply Chain Out of Bricks

Other commodities are more glamorous. But GeoLogistics didn't turn down the opportunity to manage the international movement of bricks. On the contrary, it fought hard for the contract, which today is one of its biggest.

The customer is Vesuvius U.K. Ltd., maker of refractory (heat- resistant) bricks used in the construction of kilns and blast furnaces. And while the product might seem mundane, Vesuvius is every bit as demanding of service quality as a shipper of high-tech components or fashion apparel.

GeoLogistics inherited the account due to acquisitions and mergers on both sides of the partnership. As LEP International, it had been moving and managing exports for brick maker Premier Refractories for more than a decade. LEP morphed into GeoLogistics, then became eligible for an even more lucrative contract with Vesuvius, whose parent company acquired Premier in the late 1990s.

As Premier's logistics provider, GeoLogistics had focused mostly on securing the lowest price for transportation, says Lin Phillips, director of business development. But when Premier combined with Vesuvius, it underwent a supply-chain reengineering effort that required much more of its vendors.

Vesuvius, part of the ceramics division of Cookson Group plc, wanted to outsource a substantial part of its distribution program. The vendor would be asked to provide a dedicated staff, some to work out of Vesuvius's own facilities. The idea, says Phillips, was to stop buying transportation on a reactive basis, and create a level of predictability in its spending on freight.

Negotiations took about a year, according to Terry Daniels, U.K. shipping manager with Vesuvius U.K. Ltd., headquartered in Barlborough, England. Vesuvius's service requirements were extensive, adds Phillips. Although refractory bricks are not a high-value item, they move under tight scheduling and costs must be kept low. GeoLogistics has about 24 hours to respond to an order, which could require up to 100 containers.

Daniels says GeoLogistics won the contract because of the global scope of its services. The combined operations of Vesuvius and Premier include one factory in Scotland, four in England and one in Poland, to which some brick-making was recently shifted in order to cut manufacturing costs. GeoLogistics coordinates movements out of all those locations, with its own dedicated staff in several of Vesuvius's plants and offices in the U.K. They perform a variety of administrative duties, including order processing, documentation and bookings. Says Daniels: "They are basically our shipping department."

Most shipments within Europe move by truck, with a small amount of rail out of Poland. GeoLogistics is also responsible for booking ocean carriage for product traveling to other regions, including Asia/Pacific. It performs all freight-forwarding services for Vesuvius's exports, working out of offices in Glasgow, Scotland and Sheffield, England. Export volumes are about 100,000 tons a year from the Premier factories, and 50,000 tons from Vesuvius, according to Daniels.

One of GeoLogistics' biggest challenges was consolidating the shipping departments of Vesuvius, Premier and KSR, another Cookson acquisition. Daniels says the company has realized significant savings through the reduction of staff within that operation.

Cost continues to be a critical factor in the movement of refractory bricks. But service is equally important, says Phillips. While GeoLogistics maintains strategic partnerships with a number of shipping lines, it's not bound to any for a particular move. The challenge is to respond quickly to a Vesuvius order, with a sufficient number of 20-foot containers. "The best," says Phillips, "isn't always the cheapest."

GeoLogistics also controls all imports of raw materials into Vesuvius's plants, acting as customs broker and freight booker. Commodities move in specially chartered vessels, Daniels says.

The vendor has installed its own tracking and tracing system at Vesuvius's facilities, a move that represented a "revolution" for the customer, says Phillips. With the help of the internet, GeoLogistics can make shipment status available to Vesuvius almost immediately. Alerts are issued to the appropriate office when things go awry. Phillips says GeoLogistics has managed to stick closely to its target of 98.9 percent on-time delivery.

GeoLogistics is still working to assert control over Vesuvius's European supply chain, especially as the customer expands in Eastern Europe. China is another possible new market. Phillips says the provider works to appoint a team leader, within a dedicated sales organization, for each country. The strategy helps Vesuvius to maintain an overall picture of its distribution network, and leverage its buying power to obtain lower rates on transportation.

"This is a very impressive account for us," says Phillips. "And there's still more development for both of us to do."

Other commodities are more glamorous. But GeoLogistics didn't turn down the opportunity to manage the international movement of bricks. On the contrary, it fought hard for the contract, which today is one of its biggest.

The customer is Vesuvius U.K. Ltd., maker of refractory (heat- resistant) bricks used in the construction of kilns and blast furnaces. And while the product might seem mundane, Vesuvius is every bit as demanding of service quality as a shipper of high-tech components or fashion apparel.

GeoLogistics inherited the account due to acquisitions and mergers on both sides of the partnership. As LEP International, it had been moving and managing exports for brick maker Premier Refractories for more than a decade. LEP morphed into GeoLogistics, then became eligible for an even more lucrative contract with Vesuvius, whose parent company acquired Premier in the late 1990s.

As Premier's logistics provider, GeoLogistics had focused mostly on securing the lowest price for transportation, says Lin Phillips, director of business development. But when Premier combined with Vesuvius, it underwent a supply-chain reengineering effort that required much more of its vendors.

Vesuvius, part of the ceramics division of Cookson Group plc, wanted to outsource a substantial part of its distribution program. The vendor would be asked to provide a dedicated staff, some to work out of Vesuvius's own facilities. The idea, says Phillips, was to stop buying transportation on a reactive basis, and create a level of predictability in its spending on freight.

Negotiations took about a year, according to Terry Daniels, U.K. shipping manager with Vesuvius U.K. Ltd., headquartered in Barlborough, England. Vesuvius's service requirements were extensive, adds Phillips. Although refractory bricks are not a high-value item, they move under tight scheduling and costs must be kept low. GeoLogistics has about 24 hours to respond to an order, which could require up to 100 containers.

Daniels says GeoLogistics won the contract because of the global scope of its services. The combined operations of Vesuvius and Premier include one factory in Scotland, four in England and one in Poland, to which some brick-making was recently shifted in order to cut manufacturing costs. GeoLogistics coordinates movements out of all those locations, with its own dedicated staff in several of Vesuvius's plants and offices in the U.K. They perform a variety of administrative duties, including order processing, documentation and bookings. Says Daniels: "They are basically our shipping department."

Most shipments within Europe move by truck, with a small amount of rail out of Poland. GeoLogistics is also responsible for booking ocean carriage for product traveling to other regions, including Asia/Pacific. It performs all freight-forwarding services for Vesuvius's exports, working out of offices in Glasgow, Scotland and Sheffield, England. Export volumes are about 100,000 tons a year from the Premier factories, and 50,000 tons from Vesuvius, according to Daniels.

One of GeoLogistics' biggest challenges was consolidating the shipping departments of Vesuvius, Premier and KSR, another Cookson acquisition. Daniels says the company has realized significant savings through the reduction of staff within that operation.

Cost continues to be a critical factor in the movement of refractory bricks. But service is equally important, says Phillips. While GeoLogistics maintains strategic partnerships with a number of shipping lines, it's not bound to any for a particular move. The challenge is to respond quickly to a Vesuvius order, with a sufficient number of 20-foot containers. "The best," says Phillips, "isn't always the cheapest."

GeoLogistics also controls all imports of raw materials into Vesuvius's plants, acting as customs broker and freight booker. Commodities move in specially chartered vessels, Daniels says.

The vendor has installed its own tracking and tracing system at Vesuvius's facilities, a move that represented a "revolution" for the customer, says Phillips. With the help of the internet, GeoLogistics can make shipment status available to Vesuvius almost immediately. Alerts are issued to the appropriate office when things go awry. Phillips says GeoLogistics has managed to stick closely to its target of 98.9 percent on-time delivery.

GeoLogistics is still working to assert control over Vesuvius's European supply chain, especially as the customer expands in Eastern Europe. China is another possible new market. Phillips says the provider works to appoint a team leader, within a dedicated sales organization, for each country. The strategy helps Vesuvius to maintain an overall picture of its distribution network, and leverage its buying power to obtain lower rates on transportation.

"This is a very impressive account for us," says Phillips. "And there's still more development for both of us to do."