801-110 National Logistics Management NLM had implemented qualitative improvements as well.In addition to saving money,the automaker was able to set parameters that tailored its contract awards to its customer's business priorities.These included factors such as on-time delivery record,equal-opportunity ownership, responsiveness to the automaker's needs,and other elements that were automatically incorporated into every bid prioritization.By monitoring,and in some areas enforcing,contract compliance,NLM also captured valuable data on carriers as well as on shipping patterns that became available for use by the automaker in renegotiating contracts Finally,NLM provided supplemental services to meet the automaker's additional needs,such as a Carrier Excellence Program designed to track success in correcting and preventing delivery problems; a"kitting"program in which NLM supervised the bundling of parts for shipment in predefined "kits";and a returnable-container program in which NLM helped 130 of the suppliers it worked with get their reusable containers back within 12 to 24 hours of shipment."We've always been proactive," an NLM employee observed."Our attentiveness to the needs of [the automaker],its suppliers,and carriers led us to launch new products and services whenever we saw a better way of doing things. Building the Organization By 1999,NLM employed 65 people in its Detroit,Michigan office.The logistics operation was the largest part of the business,with 36 logistics coordinators and supervisors working in shifts 24 hours per day,7 days a week to facilitate transactions through EMS.Given the automaker's interest in contract compliance and cost savings,there was also an audit quality team,consisting of 7 people. Another 2 people were involved in carrier relations,helping to cement the positive working relationship that had developed between NLM and the carriers it worked with. Given the ownership ties between NLM,Artisan,and TopFlite,there were also shared services and executive oversight.APC,a management services company,was created as a separate company to provide these services.APC employed one person in marketing and business development,who worked closely with Taylor on building business for NLM and Artisan.An IS/IT team of two people who maintained and enhanced EMS and two people who were responsible for telecommunications, networks,security,and other technology-related issues across all three of the companies.The controller and four accounting staff managed financial activities for NLM,Artisan and TopFlite.(See Exhibit 6 for an overview of the NLM,Artisan,TopFlite,and APC organizations.) Logistics coordinators had the most difficult job at NLM.Freight expediting was only necessary when something went wrong,and the people who dealt with NLM were often under pressure from angry customers as well as from internal management to fix the problem.The logistics coordinators at NLM frequently felt the brunt of their customers'stress.When external situations such as inclement weather or labor strikes made on-time delivery difficult or impossible,the job required an especially calm approach."It takes a special kind of person to handle this job,"said Kristin Williams Frank,former management team member at NLM who had stayed with the company as a consultant. "There's no time for negotiating,so the job requires a lot of apologizing for things you don't have any control over."The hourly wage of $10 to $16 was up to 40%less than employees might receive working for a large asset-based 3PL.Additionally,while the prospects for advancement at a large asset-based 3PL were greater,NLM's logistics coordinators were often not initially qualified to work for one of those companies.(Larger 3PLs typically hired college graduates,often with logistics degrees.)However,once the logistics coordinators improved their credentials through gaining experience with NLM,some left to work in logistics roles at larger companies. 10 This document is authorized for use only in Logistics Managment by Chung-Li Tseng from July 2011 to January 2012.801-110 National Logistics Management 10 NLM had implemented qualitative improvements as well. In addition to saving money, the automaker was able to set parameters that tailored its contract awards to its customer’s business priorities. These included factors such as on-time delivery record, equal-opportunity ownership, responsiveness to the automaker’s needs, and other elements that were automatically incorporated into every bid prioritization. By monitoring, and in some areas enforcing, contract compliance, NLM also captured valuable data on carriers as well as on shipping patterns that became available for use by the automaker in renegotiating contracts. Finally, NLM provided supplemental services to meet the automaker’s additional needs, such as a Carrier Excellence Program designed to track success in correcting and preventing delivery problems; a “kitting” program in which NLM supervised the bundling of parts for shipment in predefined “kits”; and a returnable-container program in which NLM helped 130 of the suppliers it worked with get their reusable containers back within 12 to 24 hours of shipment. “We’ve always been proactive,” an NLM employee observed. “Our attentiveness to the needs of [the automaker], its suppliers, and carriers led us to launch new products and services whenever we saw a better way of doing things.” Building the Organization By 1999, NLM employed 65 people in its Detroit, Michigan office. The logistics operation was the largest part of the business, with 36 logistics coordinators and supervisors working in shifts 24 hours per day, 7 days a week to facilitate transactions through EMS. Given the automaker’s interest in contract compliance and cost savings, there was also an audit quality team, consisting of 7 people. Another 2 people were involved in carrier relations, helping to cement the positive working relationship that had developed between NLM and the carriers it worked with. Given the ownership ties between NLM, Artisan, and TopFlite, there were also shared services and executive oversight. APC, a management services company, was created as a separate company to provide these services. APC employed one person in marketing and business development, who worked closely with Taylor on building business for NLM and Artisan. An IS/IT team of two people who maintained and enhanced EMS and two people who were responsible for telecommunications, networks, security, and other technology-related issues across all three of the companies. The controller and four accounting staff managed financial activities for NLM, Artisan and TopFlite. (See Exhibit 6 for an overview of the NLM, Artisan, TopFlite, and APC organizations.) Logistics coordinators had the most difficult job at NLM. Freight expediting was only necessary when something went wrong, and the people who dealt with NLM were often under pressure from angry customers as well as from internal management to fix the problem. The logistics coordinators at NLM frequently felt the brunt of their customers’ stress. When external situations such as inclement weather or labor strikes made on-time delivery difficult or impossible, the job required an especially calm approach. “It takes a special kind of person to handle this job,” said Kristin Williams Frank, former management team member at NLM who had stayed with the company as a consultant. “There’s no time for negotiating, so the job requires a lot of apologizing for things you don’t have any control over.” The hourly wage of $10 to $16 was up to 40% less than employees might receive working for a large asset-based 3PL. Additionally, while the prospects for advancement at a large asset-based 3PL were greater, NLM’s logistics coordinators were often not initially qualified to work for one of those companies. (Larger 3PLs typically hired college graduates, often with logistics degrees.) However, once the logistics coordinators improved their credentials through gaining experience with NLM, some left to work in logistics roles at larger companies. This document is authorized for use only in Logistics Managment by Chung-Li Tseng from July 2011 to January 2012