Access Provides CradleToGrave Logistics
GRAND RAPIDS — The logistics division of Access Business Group, the manufacturing and logistics subsidiary of Alticor, is one of the largest players in the third party fulfillment industry.
It's an old hand in the industry as well, having served the supply chain of direct sales giant Amway for more than 40 years, and more recently, its younger, online counterpart, Quixtar.
"Fundamentally, that's one of the things that's most positive for us," said Ken Davis, vice president of Access Logistics Division.
"Most companies have to build from some foundation. We have that anchor account to build from. We know we're going to stay in this kind of operation and build it out."
In addition to fulfillment for Alticor's Amway and Quixtar units, which comprise 95 percent of Access's business, Access serves about 60 other business-to-business and business-to-consumer companies, among them Blue Diamond Almonds, Reader's Digest Good Catalog Co. and gifts.com.
Non-Alticor companies have the option of contracting with Access Business Group for one or all of its supply chain services — from developing the product to manufacturing it, labeling it, storing it, shipping it and delivering it to the door.
Access is one of only three to five companies in the world that offers that kind of cradle-to-grave service, Davis noted.
Amway began doing contract work at what are now Access facilities in the mid-1980s.
Access Business Group now has 3,600 employees worldwide, 1,170 involved in logistics and 2,200 in manufacturing.
Besides decades of experience providing Amway's logistics, the division has many long-standing employees who bring years of know-how to the enterprise, Davis said. Their average length of service is about 25 years.
Access's logistics division operates three manufacturing facilities, two in the U.S. and one in China, and eight distribution centers in North America, of which the 700,000-square-foot Spaulding Service Center in Ada is the largest. The Access network includes 190 locations around the world that store and ship product.
The Spaulding facility has 22 loading docks and 18 receiving bays and supplies 10 service centers in the U.S. and 38 centers in 31 other countries. It receives some 60 inbound shipments daily.
By Access's own account, it's one of the world's largest, most automated distribution centers. Equipped with a computerized tilt-tray sorter, automatic A-frame picking and pick-to-light systems and radio frequency scanning, Davis said it's a pick-quick, ship-quick system.
The division shipped 7.5 million orders in 2001.
"Many companies don't realize until they come here what kind of capacity we have to offer," he said. "Generally, what we're finding is that once they find that out, we find other opportunities."
Access's logistics division is one of a handful of third-party providers that have the tilt-tray sorter and pick-to-light technology, according to Jim Siewertsen, director of business development.
"Many of our competitors have very little conveyor system, just rows and rows of shelves," he said. "Their carts weave in and out of isles picking orders. The cost is extremely high to do that; it's just not an efficient process. And the accuracy is very poor."
At the Spaulding facility, items are picked and bar coded, then directed along more than six miles of conveyors, through four automatic induction belts and 156 double chutes to the tilt-tray sorter for individual order packing.
Radio frequency terminals communicate via a computer to direct all stock tracking and locating and inventory updating activities. Automated guided vehicles following wires imbedded in the floor move up to 1,400 pallet loads a shift. The facility's high-density storage area can warehouse 35,000 pallets.
Siewertsen said one of the biggest benefits Access has is its huge volume of orders; that helps lower the cost per order.
"Companies are taking a much harder look at their own internal cost structure. They are really taking a closer look at all their logistics requirement," he observed. "And when they don't have enough volume or leverage in the marketplace, their distribution and transportation costs are extremely high.
"We can offer outsourcing services for them and really help them reduce their total cost by quite a bit."
Access prefers three- to five-year renewable agreements, and Siewertsen said it is selective about customers. He said it typically seeks to contract with mid- to large-size companies with annual sales ranging from $200 million to $1 billion.
"We really want to be a partner to these companies; we're definitely not in it for the short term. We look for stable growth companies that share the same values as Access — the ethics of our company and the type of products we distribute. There are a lot of product categories Access would not handle at its facilities."
To handle fulfillment for another company, interfaces have to be built directly with Access's internal computer system so orders can be transmitted electronically either from the other company's Web site, their call center or their catalog operation, Siewertsen explained.
It takes some time and work to make sure they're all integrated, and that's really the reason Access seeks long-term agreements, he noted.
Ultimately, he foresees the logistics division providing a core of 15 to 25 large customers with the same range of services it provides Quixtar.
"The growth of the Amway business over the last 20 years has been just tremendous and we've had to scale up and handle additional growth in the business — and that's just something that's part of our culture," he said. "So as we ramp up with other customers, we'll also be expanding capacity as needed."
Access's distribution systems comprise an integrated network of seven strategically placed distribution centers in the U.S., Davis said.
"We've looked at studies of where our customers are and where the population density is around the country. We are in the right spots," Davis remarked. "That's a really important selling point when we talk to customers, because the location of the facility is critical in having an efficient distribution network, mainly because of transportation costs."
With inventory allocated by region, Access can ship about 80 percent of orders within the first 24 hours from point of warehouse out, he said. The remaining 20 percent are shipped the next day. All orders are delivered to the door within 48 hours.
Access has built a network of trucks, trains, warehouses and 54 small regional carriers, working in conjunction with FedEx and UPS, to keep product moving, Davis said.
In regard to cradle-to-grave logistics, he said Access is probably the only company that can boast that kind of network. He envisions Access five to 10 years from now as No. 1 in the nation in logistics.