How many people does it take to manage Lighting Science Group's global supply chain? Five… with a little help from UPS.
Keeping track of hundreds of shipments around the world isn't easy. Add managing suppliers in Asia and North America, manufacturing facilities in China and the United States, the demands of big-box retail customers… well, you have a very complex, global supply chain.
UPS helps Lighting Science Group save money and get a competitive edge by handling some of its logistics.
Now imagine your job is to run it all smoothly with a staff of four.
Jay Ogburn, director of logistics and electronic manufacturing services at Lighting Science Group, was faced with this challenging task in 2010 when he joined the world's leading maker of advanced light products. His first step was to find a logistics provider to do the heavy lifting.
"UPS was the only one that was willing to be really flexible and work with us," Ogburn says. "I was able to look across the array of services that UPS offered and select what was good for us at the time as well as see what would be good for us in the future."
Before working with UPS, Lighting Science Group had an unsustainable $3 million-a-month distribution spend. "We couldn't survive on that," Ogburn recalls. "We got that down to around $300,000 a month when manufacturing in Mexico."
Lighting Science produces energy-efficient light-emitting diode (LED) lamps for retail, commercial, infrastructure and custom design lighting systems. It manufactures products at its corporate headquarters in Satellite Beach, Fla., and transferred the rest of its manufacturing operation from Mexico to China in 2013. Approximately 70 percent of the supplies for the company's U.S. facility come from Asia with the rest arriving from North America. It's mission critical for suppliers to keep up with production. "Every product launch is crucial to our success, and UPS is a pivotal part of that," Ogburn stresses.
UPS conducted a warehouse/distribution analysis to shape the manufacturer's distribution strategy, which includes bringing finished goods from China to a UPS warehouse in Fort Worth, Texas, for distribution. The UPS warehouse repackages finished goods, handles returns and conducts daily cycle counts as well as annual inventory. "Flexibility is essential, and the UPS warehouse team is able to scale up and down based on our needs," Ogburn says.
Lighting Science relies on UPS Trade Management Services and UPS Customs Brokerage to help manage import and export compliance to ensure timely, reliable delivery. This approach helps Lighting Science save time and money by reducing customs delays. Plus, "distribution from the UPS warehouse covers 90 percent of the U.S. in just three days via UPS Ground services," Ogburn says.
Transition to China
With transit times up to 40 percent faster than standard less-than-container load (LCL) ocean freight, UPS Preferred® LCL service has been instrumental in making the shift to manufacturing in China cost-effective, according to Ogburn. The company depends on UPS ocean and air freight services to transport raw materials from Asia to its facility in Satellite Beach. For movements direct to an end-customer in North America, Lighting Science uses UPS Trade Direct®.
UPS Supplier Management enables Lighting Science to maintain better control over inbound purchase orders and achieve better container utilization with fewer expedited shipments from China. UPS also helps Lighting Science reduce customer inventory and improve order fulfillment.
"UPS is a key partner in everything we do," Ogburn says. "The expertise of our UPS team is top-notch. They offer better, quicker solutions on how we can get things done." Even a lighting manufacturer needs the occasional guiding light.