Menlo Logistics Site Visits
Minneapolis, Minnesota USA and Kansas City, Missouri USA
December 12-13, 2000
Richard Armstrong and Evan Armstrong
James Fields, VP – Global Business Development
Marc Levin, Director – Business Development
Mark Federspiel, Manager – Electronic Commerce
Edward Feitzinger, VP – Technology and Engineering
Terry Hutchinson, Project Manager – IT
Marlyn Steinberger, Director of Operations
Vern Corbin, Logistics Manager
Jeff Holker, Logistics Manager
Carl Broberg, Logistics Services Manager
The purpose of these site visits was to cover the lead logistics/partnership arrangements Imation has with Menlo and to update Armstrong & Associates about the extensive information technology changes being made by Menlo under Ed Feitzinger’s management.
As followers of Who’s Who In Logistics? know, we have been less than enthusiastic about Menlo’s transportation management system in the past. The code for this system was acquired in 1992. The robustness of the system was adequate for 1992, but it was not a match for the continuously improving software of major competitors. This visit gave us a chance to review with Hutchinson the workings, rewrites and improvements made to Menlo’s TM and order management offerings since 1996, many of which were made for the Imation account. The big improvements are in Menlo’s order management system. This system has added order consolidation, a routing engine, heuristic optimization, tracking and in-transit merge functionality. Menlo’s order management combined with its use of Caps for end-to-end optimization makes Menlo a high quality transportation manager.
Feitzinger has many more far reaching SCM improvements on the drawing board. These changes will be of major importance to Menlo’s ability as a strategically capable 3PL. Menlo’s e-commerce initiative is firmly routed in its historically strong distribution management operations business. The EDI business bus messaging backbone is well designed. Menlo’s e-commerce services will include Carrier RFQ, rate quotes, real time orders, shipment optimization/consolidation, track and trace, appointments, freight payment and carrier status. IT standards are broad based including Java, WAP, EDI, COBRA, etc. Menlo’s relationship with Merchant’s Home Delivery is designed to handle large order B2C orders.
Menlo’s parent, CNF, with its Conway companies and Emery will keep the pressure on all units to achieve world class IT capability. The new Vector Logistics joint venture with GM will add to the push. This relationship is in keeping with Menlo’s preference for large accounts and strategic/multifunction relationships with them.
Menlo has had this type of relationship for nearly a decade with Hewlett-Packard and Sears. The Sears business has been key for the establishment of Menlo’s new Network Logistics Center in Lisle, IL. The NLC is a major step for Menlo in developing centralized transportation control for major customers.
Menlo continues to be one of the top U.S. based 3PLs. The changes already made and those on the drawing board should make them an even stronger competitor.
Imation was formed from five 3M divisions in 1996. Its emphasis is on data storage and related technologies. Menlo has worked with Imation from the start and helped with the strategic system design (Caps). The result is three high quality distribution centers in Harrisburg, PA; Kansas City, MO and Ontario, CA. In addition, Menlo runs a routing center in Imation’s home office in a Minneapolis suburb.
The center includes the handling of international traffic. Menlo runs a small distribution center in Sydney, Australia for Imation. (Menlo’s European operations involve a core group including Imation, NCR and Nike).
Imation is a showplace account for Menlo. In 1998 a joint presentation was made at the annual Council of Logistics Management conference. All of the DC performance statistics are very good. In addition, Menlo regularly sacrifices its own revenues to do process improvements important to Imation.
Menlo has saved Imation millions of dollars. Imation has rewarded Menlo with contract extensions, more business and helped to make extensive SCM changes. The relationship is a good example of third party logistics in a true partnership.
Sources: A&A Primary Research, https://www.xpo.com