|
UPS Logistics Group
Louisville, KY
September 26, 2001
By
Richard Armstrong
Main UPS Contact: Lynn McIntyre
The UPS campus near the Louisville airport now has 6 buildings. The buildings
tend to be basic warehouses; 300,000 square feet in size. Modifications are made
according to individual customer needs. The services offered cover a wide range
of activities that very widely by customer but are dominated by critical parts
operations (Supply Parts Logistics).
Here’s a breakdown of activities by building:
Building 1
The primary customer in this building is Lexmark, a computer printer
manufacturer. The printers are manufactured in Asia. UPS handles repairs and
returns and does light manufacturing/assembly for Lexmark in this facility. Very
importantly, UPS Capital purchases and owns the parts for this operation until
they are used in a refurbished printer. That is, UPS functions as an inventory
owning distributor with UPS Logistics providing the operating personnel. UPS has
about 200 personnel working on monitors and printers for Lexmark. UPS makes
scrap vs. refurbish decisions for Lexmark. Also in Building One, UPS provides
whole unit exchange services for Hewlett Packard, Compaq and telecommunications
customers.
Building 2
This is a semi-automated distribution center for Nike.com and apparel
manufacturers. Products are sourced from China.
Building 3
Compaq service parts are handled in this dedicated facility. It has 450
employees and 309,000 square feet. It’s a 24/7 operation with 3 shifts.
Warranty claims are processed and replacements are made quickly. Replacements
are normally kits prepared by UPS personnel. Much of the outbound is by UPS’
Sonic Air Services.
This operation is run by a brown shirt named Jill Wallis. She’s the kind of
solid, focused manager that one sees over and over at UPS. Wallis is now doing
industrial engineering for some parts of the operation. There is significant
team activity for process improvement.
The WMS is being converted to UPS’ own S+ software.
UPS has cleaned up the backlog for Compaq.
Building 4
This is a public warehouse style service parts logistics facility. There are 85
customers in this facility including Getronics and Applied Materials.
Building 5
This 310,000 square foot building has Raytheon, Siemans and Samsung as
customers. EXE, Manhattan and Starbrite WMS are used.
UPS does Raytheon’s Performance Based Logistics for the Department of Defense
from this facility. The products include anti-aircraft guns and missile systems.
The Siemans operations are for cell phones. Orders from pallet size to
individual phones are processed.
The Samsung computer monitors are flown in from Korea and distributed through
this facility. UPS provides merge in transit and other value added services for
Samsung.
Other Locations
UPS has operations for Rolls-Royce, Livingstone Health Care and the Red Cross at
Riverport.
In Hebron, Kentucky, UPS has sophisticated operations for Adidas and Honeywell
(Allied Signal).
The Allied Signal facility is a six-sigma operation that is highly mechanized,
RF based, pick to light, and wave picking based. It handles returns and exports.
About 1100 parcels are shipped per day.
UPS Logistics and its parent capitalized and built this facility for Allied. As
part of the deal, UPS Logistics got a ten-year contract. Allied will not have
the facility on its balance sheet until the contract is completed. The real
estate development was handled by IDI. UPS’ financing capability is a strength
few other 3PL’s can match.
UPS runs a similar facility in Fernley, Nevada for Allied. The Fernley
development was by ProLogis.
Russ Keller is the ex-military guy who manages the Hebron facility. He runs a
tight ship and steers very well.
|
