SCB Logistics

NLM Logistics Growing

Article: "National Logistics to the Rescue"

PROBLEM SOLVERS: National Logistics to the rescue

September 27, 2004


Steve Scholten knows his inventory managers at Maytag plants across the country no longer sweat when refrigerator, washing machine or microwave parts arrive defective on the line, threatening a shutdown. He expects his managers to call Detroit-based National Logistics Management to help solve the problem.

"When things don't always go as planned, you need to call in that relief pitcher," said Scholten, manager of in-bound transportation for Maytag Corp., which has plants in Iowa, Illinois, South Carolina and Tennessee. National Logistics Management "has made expediting for us a nonissue. We used to panic. But now it's not a big deal. There have been plenty of times we've had to rely on them."

Headquartered on Joy Road in Detroit, NLM is a growing logistics provider, a company that uses the Internet to support expedited air and ground shipments for its clients. The 13-year-old company serves domestic automakers and other industry players, helping them handle premium freight, a shipment that has to be delivered in a hurry. The company's efficiency and cost-saving methods also have attracted other manufacturers, including Maytag.

"It was a new concept when we started," said Scott Taylor, the company's founder and CEO. "People didn't think it was going to work."

A decade or so ago, Taylor and his novice firm's proposal to track and coordinate everything over the Internet using its own software was a novel approach. Manufacturers had their own roster of transportation carriers they relied on. Plant managers simply went down a list of carriers to handle an urgently needed shipment, with little consideration for cost or quality of service. Their main concern was to keep the lines running.

Taylor, borrowing ideas he used at a related company, developed a way to use the Internet as a tool to find the lowest prices and best-quality service for premium freight shipments. In addition, his team created methods for carriers to bid for loads, to check the status of shipments at various stages from pickup to delivery and for shippers to view real-time delivery status information.

For NLM to prove the concept to its first client, Ford Motor Co., the company offered its services free the first year. NLM assumed the cost of supporting four Ford plants, coordinating thousands of shipments from various suppliers. That boldness paid off. Today, NLM counts Ford as one of its clients, but its roster has grown to include General Motors Corp., DaimlerChrysler AG, Visteon Corp., Vector SCM, Citation, SPS Technologies and Key Logistics.

"We tell NLM this is what we need, this is how big it is, and we need to have it by a certain time," Maytag's Scholten said. "They determine the best way to get it there. We don't have to make that routing decision. We needed that 24-hour-a-day operation, and that's what NLM gives. They've saved us money. We've also saved something that's hard to measure: time."

With many companies striving for lean manufacturing operations, third-party logistics providers such as NLM have become invaluable, providing transportation, warehousing and other services, said Kathleen Hedland, director of education for the Chicago-based Council of Logistics Management, a professional association of logistics personnel.

"It's an industry that is growing," she said. "These third-party logistics providers do everything from inbound and outbound transportation to providing warehouse space to human resources services. They offer a lot of efficiencies that these companies can no longer do by themselves."

Evan Armstrong, vice president of Armstrong & Associates, a consulting firm for supply chain management, said third-party logistics is a $76-billion industry in the United States and has averaged about 14-percent annual growth since 1996. Logistics providers "save companies significant time and money," he said.

A privately held company, NLM declined to divulge its revenues. But as an indication of its growth, Cindy Morin, NLM's director of finance, said the company's spending on transportation, the cost of air, ground and charter shipping for clients, will amount to $200 million in 2004, up 276 percent since 1999. In addition, the company oversaw some 350,000 shipments during the same time frame, up 175 percent from 1999, she said.

From its trailers on a 10-acre parcel on Joy Road, NLM operates 24 hours a day, seven days a week and handles more than 1,500 shipments a day to companies across the country, Canada and Mexico. Its office interior resembles a military command center with an array of computers, charts and maps.

"A lot of times we are the last line of defense," said Jim Applegate, president of NLM Supply Chain, noting NLM has a comprehensive plan for disaster and operates a backup facility in Southfield. That plan was instrumental in helping manufacturers continue to operate during the power blackout of August 2003.

"We were up and running. We didn't miss a beat," Applegate said.

Despite the pressure of handling hundreds of calls a day, the office is eerily quiet. At the helm of these calls are "event specialists" like Jewel Calvilla. They receive calls from manufacturers and evaluate the shipment mode, export the shipment information to the carrier base, receive bids back from numerous carriers, and coordinate the shipment so the manufacturer receives the best service at the lowest price, all within a 30-minute window.

"It's my passion," said Calvilla, who has been with NLM for eight years. "We're the experts. We never say 'No.' We handle every aspect of expediting. We always want to make the customer feel comfortable. It can take 20 seconds to an hour to solve a problem."

NLM owns no tangible assets, no trucks or no heavy equipment. Its assets are its 128 employees and its technology. Job titles are almost nonexistent; the company's organizational chart is as flat as a dinner plate.

NLM shares its 10 acres with Artisan, Taylor's other company that handles heavy hauling for the automakers, and a certified minority trucking company.

The company's finesse has not gone unnoticed. It recently won a major industry award out of a field of 400 companies for its work and financial performance in 2003. Despite its success, the company has no plans to leave its modest headquarters in Detroit.

In fact, NLM has made a commitment to help the neighborhood. It was instrumental in forming a neighborhood group, Action on Joy Road, to keep that busy street and others clean and safe. The company also adopted a park and works with local schools.

NLM is poised to take on more business. Kristin Williams, NLM's director of marketing, said the marketplace is changing and the services NLM offers are becoming the norm. Manufacturers outside the automotive industry are realizing how efficient and cost-effective its services are.

"We've spent a lot of time building trust with our clients," Taylor said. "We're now a leader in the industry. We think there's unlimited growth."

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