Logistics firm expands presence in China, Mexico
Supply Chain Solutions finds its local customers need more international support.
A supply chain management company is expanding its operations in China and has entered into a joint venture with a Mexican company — moves that will help the company better support its customers globally.
Grand Rapids-headquartered Supply Chain Solutions said it is merging its current China operations with “a few strategic partners” to leverage its volumes and operational staff, which will allow the company to capitalize on better rates and service for suppliers and clients.
Supply Chain Solutions’ Chinese operations are located in Hong Kong, Shanghai, Ningbo and Qingdao.
Les Brand, CEO, said when Supply Chain Solutions first bought the international assets of CR England a few years ago, it gained the company’s existing Chinese operations, which allowed the company to do more work for its U.S. international customers, particularly in the automotive sector.
“When we bought the business, it was mainly China to the United States; now we are serving more United States to China and the Asian Pacific market through China,” Brand said.
Brand said the company’s previous expansion into China was part of its strategic plan to expand internationally to support its customers.
“A lot of manufacturers went to China for reduced labor cost, but you have big logistics costs to bring pieces and parts back and forth so there has been a lot of effort to look at the supply network and move it closer to the production sites,” he said.
Supply Chain Solutions will have staff in China who will be wholly focused on growing the strategic partnerships and providing superior customer service to the overseas shippers.
The company will retain its non-vessel operating common carrier status.
In Mexico, Supply Chain Solutions has entered into a joint venture with ACCEL Worldwide Logistics, a Mexican National corporation.
The new joint company will be known as IXL Global Logistics. The joint venture will allow each company full access to the “different but complementary skills” of the other company.
Brand said Supply Chain Solutions would have access to ACCEL’s extensive warehouse network in Mexico, while ACCEL would gain access to Supply Chain Solutions’ technology and stateside operations to support its planned growth into the U.S. market.
“They have a network of 25 highly automated warehouse locations throughout Mexico, but they don’t have a lot of transportation experience, which we can provide,” Brand said. “And they want to grow into the U.S. market and they don’t have any locations in the U.S. market. It’s a perfect match for us.”
Brand said with customers like Dematic and Ford growing their operations in Mexico, the joint venture would be particularly advantageous.
Brand said typically when a company moves its manufacturing into a new country, it has to move its supply base.
“That doesn’t move easily,” he said. “You are actually supporting a lot of plant operations by taking the current supply base and getting those pieces, parts and components down to the plant.”
He said Supply Chain Solutions is supporting Dematic’s current relocation of its Grand Rapids manufacturing operations to Monterey, Mexico, as well as its continued global operations.
“We are taking their product, built in Grand Rapids, and sending it out across the world,” Brand said.
Brand said Supply Chain Solutions also has launched an operation for ACCEL in El Paso, Texas, as a result of the joint venture.
“They own a company called Mount Franklin Foods, which makes Gummi Bears,” Brand said. “We are doing a lot of United States-side business for them through that El Paso operation.”
To support its international growth, Supply Chain Solutions is adding workers in El Paso, Mexico and Asia.
“These are analytical and logistics engineering positions,” Brand said. “When we take a look at transportation, we try to not just match up the right carrier with the right lane; we actually try to understand the flow of materials. That is where the engineering competency comes into play.”
Brand said Supply Chain Solutions’ expansion in China and its joint venture in Mexico are a result of demands on its manufacturing customers by their customers, such as OEMs.
“Michigan is a great marketplace for the manufacturers, but their customers are demanding they get closer to activities they are trying to do on a global basis,” he said. “Mexico can serve the South American and North American market.”
He added: “Through created efficiencies we free up cash, save money and help companies grow into new markets, ultimately improving market share and a nimbler operation while reducing risk.”
Brand said the transportation industry is rapidly evolving and more changes are coming.
“The big, audacious goal for most logistics companies is to manage large volumes of data effectively so, as people outsource parts of their supply chain to get more efficiency, the third-party providers are ready to take it on,” he said.
“We are moving a ton of information and cash going through the supply chain. All of that is on the horizon to do a much better job with integrating some of the technology to match up to some of the activities as they develop around the world.”