Outsourcing logistics can pay off big time


Learn how four companies have reduced costs, improved quality and boosted performance.

Companies large and small are trusting UPS to take over warehousing, distribution and postsales service. Four businesses in various industries have saved significantly by relying on UPS logistics. Discover how in these stories.

UPS is helping businesses save big money by handling logistics and warehousing.

Putney Inc.
Inc. magazine ranks Putney high among the fastest-growing private companies in the United States. Launched in 2006, the Maine-based company specializes in developing high-quality, generic pet medicines. In the beginning, Putney sold only through distributors. But in October 2012, after the company added an inside sales force to sell directly to veterinarians, UPS entered the picture.

"We needed a supply chain partner who could not only handle pallets and cases, but put together a box with multiple bottles and handle special orders for a specific veterinary practice," says Stacey Vaughan, senior director of supply chain.

Now, all Putney products are warehoused at a UPS facility in Louisville, Ky., near the UPS Worldport® air hub, where orders large and small are picked and packed. “Most of our customers enjoy two- to three-day delivery, but we can even get products in the vets’ hands the next day,” Vaughan says. “We’re saving at least a week, compared to our old approach.”

Takeaway: The ability to leverage UPS's experience and infrastructure when opening new markets or channels can make a huge difference, especially for smaller companies. Watch how another fast-growing company increased revenue 3,000 percent.

This New Jersey-based business, a Volt Information Sciences company, provides global IT infrastructure services ranging from field service for all types of hardware to remote network and data center management. Maintech's reputation for world-class service hinges on veteran technical staff members who are certified and experienced with all types of hardware.

Maintaining a complex inventory of the right spare parts in far-flung remote locations is a real challenge. As a result, field service techs often turned into part-time warehouse managers, tracking repair parts kept in their homes, storage lockers, regional offices or customer sites, says Bill Olohan, vice president of infrastructure services. 

Maintech turned to UPS for help, moving parts into 80 UPS-run field stocking locations in 13 countries. The payoff: more control and faster access. Next came seamless integration with UPS's global IT system: Transactions flow automatically to UPS, saving time and reducing errors.

Last year, Maintech added software from Baxter Planning Systems, a UPS partner. "Baxter analyzes the data and tells you how to redeploy inventory across our network to meet demand," Olohan says.

The results are a 40 percent decrease in the number of purchase orders issued, meaning that Maintech is buying parts in quantity ahead of time, lowering unit costs. "We've had explosive growth in the volume of work orders and parts orders, but our freight costs have actually gone down," Olohan says.

Takeaway: An integrated and optimized service-parts supply chain can help reduce inventory and expedited shipments and can control freight costs. Learn more about service parts logistics and Baxter Planning Systems here

Philips Healthcare
This business, part of Netherlands-based Royal Philips, provides hospitals and clinics worldwide with diagnostic and imaging systems. Growth through acquisition resulted in a fragmented supply chain with 40-plus service providers and transportation carriers to manage – and a patchwork quilt of IT systems.

"Our core competency is not warehousing and distribution," says John Schlanger, vice president for service parts supply chain, "so we chose UPS as our lead logistics provider."

Philips now uses UPS facilities in the Netherlands, Kentucky and Singapore, along with 50 global field stocking locations. The strategy has paid off. Working with UPS has yielded cost savings of 14 percent, and helped Philips reduce inventory 10 percent.

Another payoff: "I can put something on a Browntail [UPS plane] and deliver it direct to the customer while still optimizing costs," Schlanger says. "That gives us a competitive advantage."

Takeaway: Your customers expect great products and want them kept in tip-top shape. That's particularly critical in healthcare, where lives can hang in the balance. For more insight, read the 2013 Pain in the (Supply) Chain Healthcare Survey.

Pratt & Whitney
Pratt & Whitney, a United Technologies Corp. (UTC) company, is a world leader in the design, manufacture and support of quality commercial and military aircraft engines. The company asked UPS to manage its global spare parts distribution, which includes quality inspection, kitting and shipping spare parts to customers worldwide.

The UPS partnership has helped Pratt & Whitney focus on its core competencies. "UPS has done a great job handling our spares distribution over the last five years, showing performance improvements each year," says David Simoneau, Pratt & Whitney's operations manager for third-party logistics. UPS has been recognized by UTC for achieving its highest level of quality performance (UTC Supplier Gold) four years in a row and is the only global logistics supplier to achieve Supplier Gold.

Takeaway: Worldwide distribution that runs like clockwork takes both dedication and collaboration. UPS and Pratt & Whitney employees work together to track 25,000 parts and fulfill 1,400 complex orders daily – with accuracy rates that hover around 99.98 percent – at an Atlanta facility managed by UPS. 

These are just a few of the companies that trust UPS to take over their finished goods distribution and aftermarket supply chain. The business case for your company can be equally compelling. Whether you want to expand into new markets or find new ways to delight old customers, UPS has the hands-on expertise, the global infrastructure and the technology you need to grow and operate more efficiently. Here are some resources:




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