USCO Logistics
Lewisville, Texas USA
December 12, 2000
By
Richard Armstrong

On December 12, 2000 we toured the dedicated warehouse and reviewed distribution management functions USCO provides for a major pharmaceutical manufacturer in Lewisville Texas. In addition we had an extensive discussion with key USCO managers about its new developments in distribution management, the USCO Dashboard and international business.
Lewisville Operations

This modern 135,000 square feet warehouse is food grade and well-lighted. There are 82 employees working two shifts. The warehouse is temperature controlled and has a refrigerated/freezer area. Foursite 2.4 is currently in use as it is at many USCO facilities. Class 6.1 HAZMAT materials (biotoxins) plus controlled pharmaceuticals are handled effectively at this location.

Year-to-date performance features for inventory accuracy, cycle counting, order accuracy and shipping exceed customs expectations and are in the high 90’s. About 400,000 orders will be processed this year. An automated roller-conveyer package shipment system is used.

The WMS will be modified to the new Marc product in 2001. This change will allow for more radio frequency activity. The warehouse is currently a manual, paper operation in keeping with the customer’s expectations.

USCO has provided significant savings for the customer at this operation and through the utilization of its new transportation/distribution planning system.
Distribution Planning

USCO has integrated Pinnacle’s FreightLogic software to its Foursite WMS. The integrated systems function well, providing significant operational and cost improvements. Service failures are minimal and brief. Distribution optimization is performed several times a day on batches of orders received through the WMS and treated in FreightLogic. This effective planning system minimizes client cost and provides significant savings.
The USCO Dashboard

This exciting piece of technology provides inventory visibility across all USCO facilities for a customer. In addition, Dashboard is used to provide tracking and status updates. USCO is ahead of many ASPs who are trying to develop this same capability.
Internationalization

USCO has put its efforts into this hemisphere. There are six very good, owned facilities in Mexico, and USCO is a top provider in that country. USCO is expanding its efforts in Brazil, Argentina and Chile. USCO will establish its brand in these countries. Early results are very promising.
Conclusions

We were very pleased at the extensions USCO has made into distribution management and Internet applications since 1997. The warehousing operations have been topnotch for decades. Industry diversity has increased. Retail (non-food) is now 15% of the business; high tech is 40% and pharmaceuticals, the old standby, are 25%. USCO has solid profitability. While its pricing is competitive, it is a mature company understanding the importance of protecting margins.

USCO is a very good 3PL on its way to becoming a major player.

 

Sources: A&A Primary Research, http://www.kuehne-nagel.com/

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