Access Tightens Its Logistics Chain

February 28, 2003
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ADA — Access Business Group LLC, a subsidiary of Alticor Inc., announced last week it will close two of its six regional service centers in the United States and eliminate the 20-truck over-the-road fleet operating out of its Ada facility.

A 185,000-square-foot service center in Nevada and a 120,000-square-foot service center in New Jersey are slated to close by July in a move intended to streamline operations for efficiency, said Ken Davis, vice president of logistics.

The New Jersey operation will be folded into Access' Spaulding Avenue distribution facility, which will mean more work for the local warehouse, he said.

Parts of the Nevada operation will be rolled into service center operations in Texas and Washington.

Closure of the New Jersey and Nevada centers will eliminate 35 and 27 jobs, respectively.

Davis said the New Jersey center closure reduces about 40 percent of Access' over-the- road routes, which is why the company is shutting down its truck fleet.

"When we studied it, we determined we didn't need the fleet to go out there anymore."

Elimination of the over-the-road truck fleet eliminates 20 driver positions. According to the company, those employees will receive enhanced severance packages.

Access will contract out for trucking services instead, shifting that business over to four or five local carriers that it already does business with, so those carriers will get some added business, Davis said.

Company officials said "shifting sales patterns" and technological improvements rendered the existing distribution network inefficient.

As Davis explained, in the United States the company's business now revolves around Quixtar Inc., Alticor's e-commerce business that sells Amway and other products.

"Under the Quixtar model, people buy more often and in small quantities — so that's the 'shift' in the business."

The improved technology Access now has in picking, packing and shipping, coupled with shipping software models now used by UPS, FedEx and other carriers, helps Access determine how it can best ship orders, Davis said.

"One of the ways we ship is a DDU — a direct delivery unit of the United States Postal Service. So we can, with our contract carriers, load orders and ship them directly to a DDU and have it delivered through a DDU or an IBO (independent business owner)."           

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