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Why Shippers Love These Ports

Archives, Global Logistics, Ocean Ports

Why Shippers Love These Ports

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Twenty Picks and What They Offer Your Logistics Program

Despite a soft global economy, the idea popularized by Field of Dreams that “If you build it, they will come” seems appropriate for many of the world’s cargo ports, especially in the States where an increasing number are dredging and expanding capacity to accommodate more business and larger ships.

Why Shippers Love These Ports is a thumbnail sketch of what importers and exporters love at these ports. Midwestern shippers may appreciate easy access to ports that offer interstate, first-class rail and proximity to the Mississippi River. Western exporters might appreciate the shorter distances to Asian markets.

Port of Baltimore

Top Destinations: United Kingdom, France, Belgium
Top Export Cargoes: Automobiles, Coal, Petroleum
Total Trade: 44.87 million tons
Port of Baltimore
Port of Baltimore

Competition for cargo growth requires savvy marketing and capital improvements. Dredging is complete, four 14-story cranes have arrived from China, and CSX is planning a state-of-art intermodal facility at the Port of Baltimore where officials look to attract post-Panamax vessels. In 2011, 37.8 million tons of total foreign commerce moved through the port, valued at $51.4 billion.

Port of Greater Baton Rouge

Top Destinations: South Korea, Mexico, China
Top Export Cargoes: Forest Products, Agricultural Products, Steel and Pipe
Total Trade: 57.87 million tons

Rich in history and with a strong economy, Baton Rouge is one of the nation’s “Top 10 Cities for Young Adults.” Moreover, it is home to the Port of Greater Baton located at the upper end of the Mississippi River and near major oil fields in Louisiana, Oklahoma and Texas. It offers inexpensive river and ocean transport and is a distribution center for agricultural products from the surrounding region. It’s ranked as the nation’s 13th-largest port in total tonnage.

Port of Boston

Top Destinations: North China, Japan, North Europe
Top Export Cargoes: Hides and Skins, Automobiles, Logs and Lumber
Total Trade: 18.4 million tons

“We want to make sure we’re an economic engine and gateway to the global economy,” says Port of Boston CEO Thomas Glynn. The oldest continually active port in the Western Hemisphere, it spent some $70 million for improved technology, land expansion and facility enhancements. Plans now call for a dedicated truck route and terminal buffer, which Massport spokesperson Lisa Langone says can save New England companies on trucking costs.

Port of Charleston

Top Destinations: Asia, Europe, Latin America
Top Export Cargoes: Automobiles, Agriculture Products, Tires
Total Trade: 17.91 million tons

The Port of Charleston is investing $1.3 billion in a 10-year plan to become a top-five post-Panamax port. It proudly touts the deepest channel in the Southeast at 48 feet. It added four new container services in 2012 and is one of the nation’s 17 commercial “Strategic Ports.” South Carolina Ports Authority CEO Jim Newsome says the deep water advantage gives it a competitive edge over nearby ports and is already prepared to handle the larger cargo ships.

Port of Corpus Christi

Top Destinations: Venezuela, Spain, Brazil,
Top Export Cargoes: Oil, Petrochemicals, Shale Oil
Total Trade: 70.53 million tons
Port Corpus Christi
Port Corpus Christi

Affectionately known as “The Sparkling City by the Sea,” Corpus Christi is the proud home of the sixth-largest port in the nation. The Port of Corpus Christi’s location and facilities are attractive for business development says John LaRue, the port’s executive director. Just seven hours from Mexico, the deep-water port has three Class 1 railroads that offer easy access. “There’s not a lot of congestion,” says LaRue. “They want to be sable to get in and out very quickly. The weather doesn’t hurt either.

Port of Galveston

Top Destinations: Mexico, Guatemala, Costa Rica
Top Export Cargoes: Grains, Fruit, Fertilizer
Total Trade: 13.74 million tons

In the heavily competitive Lone Star State, the Port of Galveston has to carve out a niche to out duel 15 other Texas ports. It set records in the shipment of bulk fertilizer and roll-on/roll-off cargo (RO/RO)—late-model used cars, agricultural and construction equipment— totaling more than 500,000 tons, 25 percent more than the previous year. Although it specializes in grain, the port’s shipments were down because of last year’s drought. Port of Galveston found a new niche in cattle, sending 40,000 to Russia. “It was sort of funny,” says port director Michael Mierzwa, “you had these cows stick their heads out between the slits between the railing just like on a railroad cattle car.” The port is planning construction to improve capacity for larger ships

Port of Hamburg, Germany

Top Destinations: China, the Baltic Sea region, Russia
Top Export Cargoes: Pharmaceutical Materials, Coffee, Spice
Total Trade: 132.29 million tons
Port of Hamburg, Germany
Port of Hamburg, Germany

The Port of Hamburg, known as Germany’s Gateway to the World, is the country’s largest port. In 2011, container shipping rose 16.5 percent over the previous year. Claudia Roller, CEO of Port of Hamburg Marketing, attributed the growth to its infrastructure and award-winning service providers, and dredging will further boost the port’s attractiveness. With more than 220 cargo trains per day, Hamburg is Europe’s No. 1 railway port and intermodal hub.

Port of Houston

Top Destinations: Brazil, China, India
Top Export Cargoes: Petroleum, Chemicals, Steel
Total Trade: 237.80 million tons

The Port of Houston was rated “Port Authority of the Year in 2011” by Colliers International Valuation & Advisory Services. Many nearby petroleum companies make it one of world’s largest petrochemical complexes, fueled by its infrastructure and intermodal assets. The Colliers report says: “Loss of the Port of Houston could have the most adverse impact to the U.S. economy if it were ever to be incapacitated for an extended period of time.” It is the largest Texas port with 46 percent market share.

JAXPORT

Top Destinations: Caribbean, Europe, Middle East
Top Export Cargoes: Automobiles, Coal, Pulp and Paper
Total Trade: 16.82 million tons

JAXPORT follows the old adage, “location, location, location.” Despite being Florida’s third-largest cargo port, JAXPORT sits at the crossroads of three major railroads (CSX, Norfolk Southern and Florida East Coast Railway) and three interstate highways (I-95, I-10 and 1-75). Deep-channel construction is another plus, and it’s the nation’s second-largest port for automobiles. JAXPORT also has a heavy military presence, with a submarine base and two additional military facilities.

Port of Long Beach

Top Destinations: Taiwan, China, Mexico
Top Export Cargoes: Petroleum Coke, Waste Paper and Paperboard, Oil and Oil Products
Total Trade: 80.28 million tons

The Port of Long Beach has a Hollywood influence. The port’s television program, Pulse of the Port, touts its $4.5 billion expansion project and marketing plans for boosting business to Central and South America, where demand for U.S. goods is on the rise. “As most experts look at Latin America, they’re saying that’s where there will be a lot more future,” explains J. Christopher Lytle, executive director. “I don’t want to get into business too late.”

Port of Los Angeles

Top Destinations: Northeast Asia, Southeast Asia, India
Top Export Cargoes: Waste Paper, Scrap Metal, Animal Feed
Total Trade: 65 million tons
Port of Los Angeles
Port of Los Angeles

The Port of Los Angeles is the nation’s No. 1 container port by volume, a distinction it has held since 2000. In 2006, the port moved an impressive 8.5 million TEUs (twenty-foot equivalent units) that established a new national container record. The port has launched a major capital project to expand. “We feel we’re in the cutting edge,” explains port spokesman Phillip Sanfield. “We’re continuing to invest to maintain world class infrastructure and remain unparalleled.”

Port Miami

Top Destinations: South America, Europe, Asia
Top Export Cargoes: Automobiles, Food Products, Agricultural Material
Total Trade: 7.18 million tons

Miami’s lure of beaches and trendy nightlife makes it a dream location for snowbirds seeking a respite from chilling northern winters. For PortMiami, early 2015 completion of a tunnel and channel widening to 50 feet may be a cargo volume booster. Total tonnage rose 10 percent in 2011 while annual TEUs rose 6.5 percent. Touted as the “Cargo Gateway of the Americas,” Latin America and the Caribbean are among the major destinations for the port’s cargo.

Port of Mobile, Alabama

Top Destinations: Mexico, the Mediterranean, Netherlands
Top Export Cargoes: Wood Pulp, Iron, Steel
Total Trade: 55.6 million tons

In 2012, metallurgical coal stoked record fiscal-year revenues of $144.6 million for the port. Officials attribute growth to greater global demand and boosts in shipments of iron, steel, forest products, automobile components and refrigerated cargo. Containerized cargo rose 31 percent to 196,965 TEUs. The port is served by two interstate systems, five class-one railroads and has direct access to inland waterways extending to the Great Lakes.

Port of Montreal

Top Destinations: Northern Europe, the Mediterranean, Asia
Top Export Cargoes: Petroleum Products, Forest Products, Grain
Total Trade: 28.53 million tons

Often called the Paris of North America, Montreal is a hub for international shipping and commerce. Montreal Port Authority president and CEO Sylvie Vachon says the port is a trans-shipment center that is connected to all six continents. “We are an internationally renowned port and a leading North American intermodal center within the global logistics chain. It is a leading container port served by the largest container shipping lines in the world.”

Port of New Orleans

Top Destinations: Latin America, Europe, Africa
Top Export Cargoes: Chemicals, Coal, Timber
Total Trade: 77.1 million tons

The birthplace of jazz and home of Mardi Gras, New Orleans is at the center of the world’s busiest port complex—Louisiana’s Lower-Mississippi River. Six railroads feed into the port and $100 million infrastructure projects make it the choice for Midwest cargo. Port CEO Gary LaGrange says the right conditions encourage economic development. “The Port of New Orleans is a major contributor to providing those conditions and our business leaders understand our future is tied to international trade.”

Port of New York & New Jersey

Top Destinations: China, Europe, India
Top Export Cargoes: Beverages, Paper Products, Machinery
Total Trade: 139.17 million tons

In the city that never sleeps, the Port of New York and its partner the Port of New Jersey compete heavily against neighboring ports in Boston and Philadelphia. In 2011, Port NY/NJ ranked third in container cargo with 606 million TEUs and it is currently working to deepen and expand its harbor to accommodate larger ships. “The port improvement is providing superior ocean access to accommodate the demand for international cargo throughout region,” says a port official.

Port of Savannah, Georgia

Top Destinations: Asia, Northern Europe, the Mediterranean
Top Export Cargoes: Poultry, Forest Products, Rubber
Total Trade: 35.5 million tons

Six million tourists can’t be wrong. Nice weather and a slow carriage ride down magnolia tree-lined streets make Savannah a special city. It is also home to the nation’s fastest growing port, which grew 16.5 percent from 2000 to 2005. In 2007, it was the fourth-busiest U.S. port and fastest growing container terminal, handing 2.3 million TEUs. “Our capital programs have transformed this seaport’s ability to handle post-Panama sized ships and diversity in its cargo base, attract industrial investment statewide and generate jobs,” says James K. Lyons, director and CEO.

Port of Seattle

Top Destinations: China, Japan, Taiwan
Top Export Cargoes: Grain, Machinery, Seafood
Total Trade: 26.6 million tons

The port looks to the future. Already the sixth-largest U.S. port and the closest to Asia, officials proudly tout its state-of-the art facilities and say it clearly wants to be “where a sustainable world is headed.” New post-Panamax cranes bring its total crane count to 27 and its channel is 50 feet deep. It also is responsible for 21,695 direct jobs and 7,845 indirect jobs.

Port of Tampa

Top Destinations: India, Mexico, Trinidad
Top Export Cargoes: Petroleum Products, Forest Products, Cement
Total Trade: 31.4 million tons

A poplar departure port for Caribbean cruises, Florida’s largest port is revving up to boost cargo business with capital improvements designed to increase container and bulk cargo facilities. Container capacity will increase from 25 to 160 acres, accommodating up to 200,000 TEUs, says Wade Elliot, director of marketing. Expansion will allow for more bulk cargo such as petroleum products, chemicals and fertilizer.

Port of Virginia

Top Destinations: Brazil, Netherlands, Italy
Top Export Cargoes: Minerals, Fuel, Oil
Total Trade: 72.6 million tons

The motto “Virginia is for lovers” has captured tourists’ hearts for years. Once a key producer of tobacco, Virginia is now a leading producer of turkeys and broilers. Some $1.3 billion in CSX and Norfolk Southern rail upgrades and a 50-foot deep channel enhance the port’s attractiveness. Officials say the goal is to “establish the Port of Virginia as the leading ocean container terminal complex on the East Coast.” As a good start, it has the largest and fastest container cranes in the world—22 cranes with 26-foot outreaches.

Archives, Global Logistics

How To Pick a Port

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Holman Boiler Works’ CEO is Growing Internationally by Making Wise Decisions With Port and Airport Selection

Holman Boiler Works, Inc. president and CEO John Marrinucci is guiding an expansion plan designed to boost overseas sales of the Dallas, Texas-based company’s boilers, tubes and replacement parts. Marrinucci is navigating Holman against some larger competitors and gaining an advantage in the competitive boiler products industry with its well thought-out shipping plan.

Though much of the company’s export expansion comes from stepped-up marketing and contract-bidding efforts, intermodal logistics is the engine that will drive its international sales growth. Holman must depend upon a diversified shipping plan that features the selection of the right freight forwarders, airports and ocean ports. Time, cost, size and weight capacity are some of the determining factors, contends Louis Caporale, the company’s international sales engineer.

Nearly 5 percent of Holman’s annual $60 million in sales are generated from exports into such countries as Russia, United Arab Emirates, Trinidad, Aruba, Mexico, Brazil, Ecuador, Peru, Chile and Puerto Rico. Though international sales have represented a low percentage of the company’s overall business, they have provided an impressive spark in revenue. “Exports are less than 5 percent of our business, but it has sometimes been a significant part of our business,” says Caporale. “We want significance every month.

“We’re bidding on a lot of things and are adjusting our cost basis,” he explains. “Now this is starting to be a continuous process for us. We want re-occurring business. We’re really competing.”

Doubling international sales by the end of the next fiscal year would be a significant increase. And while Holman wants to boost business in its core regions of the world, it is targeting select growth regions. “South America and the Middle East are ‘no brainers,’” Caporale says.

Hoping to attract some new business from the western South American countries, Caporale says he would consider the Port of Long Beach because it offers a shorter route. Additionally, the Port of Long Beach is two years into a 10-year, $4.5 billion program to upgrade its facilities.

Texas’ Port of Houston, the Gulf Coast’s largest container port with 67 percent of that coast’s container traffic, offers more than location as a feature for Holman. “We generally use the Port of Houston because we can negotiate cheaper rates, there’s better access and less waiting for the shipment to move,” explains Caporale.

With an eye toward targeting Asia, Marrinucci realizes his prospective customers do not want a slow boat to China. Quicker shipping is another major feature at the Port of Houston, which now offers a shorter route to China. Earlier this year, shipping company Cosco Container Lines announced a new all-water service connecting Asia and Houston via the Panama Canal.

Cosco’s Tim Marsh, vice president of North American sales, says the company chose the Port of Houston “because of its progressive approach to cargo handling, ideal intermodal connections and geography that easily met shipper requirements. Quay and crane configurations allow us to turn a vessel in minimum time.”

The Port of Houston is attractive, agrees Dan Gardner, president and founder of Trade Facilitators, Inc., a global supply-chain consultant based in Los Angeles. “It is a natural geographic choice, has good rail access and is equally equipped to handle containerized and bulk shipments,” he says.

“Steamship or airport selection is often based upon geographic proximity to the shipper, where it is going and the number of steamship lines that are operating out of that port,” Gardner continues. “Air freight is considerably more costly, as much as 40 to 60 percent more than steam ship shipping. However, not all cargo lends itself to that. It might be sensitive to humidity or salt air.”

While the Port of Houston is Holman’s primary ocean shipping departure point, the company has used the Port of New Orleans, the Port of Jacksonville and the Dallas/Fort Worth International Airport for air cargo. Caporale says it all depends upon the customer, the destination and what is being shipped.

Further enhancing the shipping experience for Marrinucci and other exporters are freight forwarders and shipping services that assist with the paperwork, handle packing, crating and preparing merchandise for loading into containers or flat racks and, finally, move it onto awaiting ocean vessels. When time is an important factor and the freight is light, Caporale may choose air over sea and use a freight services company that packages the cargo and readies it for shipment. Tubing or replacement parts that need to be at the destination within a day or two are trucked a few miles away to the Dallas/Fort Worth airport. It is crucial for the customer to get those parts quickly, and it’s a competitive advantage for Holman if the customer does not have to wait for parts to repair a boiler.

One method does not fit all when you’re exporting boilers, tubes and replacement parts to faraway lands. What works well for shipping merchandise to Russia one week isn’t suitable for delivering parts to St. Croix the next week, and shipping boilers to Brazil certainly requires a different strategy than exporting to Saudi Arabia.

When Holman’s exports are bound for St. Croix, Puerto Rico, the Dominican Republic or Jamaica, the Port of Jacksonville becomes the most convenient port from which to ship. “It’s a week out of Jacksonville and two weeks out of Houston to the islands,” explains Caporale. Tubing that is overdue to Kuwait may be flown out of the Dallas/Fort Worth International Airport. Other merchandise, however, might be put onto a ship.

Despite projected export growth pinned to intelligent shipping decisions, not all port and airport selection strategies remain in Holman’s hands. The mode of transportation for replacement parts to Russia, as an example, may vary depending on the customer’s need and the cost of shipping.

“Some customers make the shipping arrangements themselves,” Caporale notes. “They tell us which shipping company and what port they want to use. They may have made special arrangements with them.”

This was the case in sending merchandise to the West Indies from the Port of Jacksonville, which Holman used partly because it is closer and partly because the customer had pre-arranged the shipping details and negotiated a favorable rate.

“Since they are paying the cost of shipping,” Caporale explains, “we do what they want.”

 

Archives, Global Logistics, Warehousing

Stocked and Loaded

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How exporters are using inventory management software to reduce lead times and keep cash on hand.

As a leading manufacturer of merchandise identification and tracking devices, one would think that Zebra Technologies had no inventory control problems. It wasn’t that the Lincolnshire, Illinois, company had too little or too much inventory at its Vernon Hills distribution center; it was a matter of finding and putting together orders in a small staging area for shipments to Canada, Latin America, Singapore and the Netherlands. It also had to keep track of container loads of parts from China.

Ironically, the company that produced devices to help others track merchandise needed some help locating its own parts.

Shipping nearly $3 million of bar code tags, readers, printers, accessories and supplies daily, Zebra needed to solve two problems: labor and space. To fill an order, workers would have to look for parts numbers in various sections of the warehouse to bring to a small area. There the parts, accessories and supplies would be packaged for shipment.

“We had an issue,” explains Gary Meekma, senior manager of warehouse operations. “We were paper-based and it was not effective.”

Additionally, the old system was time consuming. “One person is not picking all the items in an order. A guy would be picking items in one corner of the warehouse, another picking items in another corner,” Meekma explains. “We had to have a consolidated system.”

The objective, says Meekma, was to reduce the time it took to find parts and to reduce the space needed to assemble the order for shipping. Before implementing a new system, one developed by another Zebra division, workers took longer to find the parts they needed for the order. For some orders, it took as long eight minutes to find a part. With the new system, it now takes no more than three minutes. It utilizes bar code tags, real-time scanners and is driven by software that company officials say is more accurate than a GPS system.

The distribution unit made the switch in February, when the company adopted Oracle, a comprehensive computer system. But Meekma needed more than Oracle. The company had just developed System Builder, a supply-chain software package. However, the Vernon Hills facility didn’t need all of the features in that package. Meekma only needed System Builder’s real-time locating system (RTLS) feature. An initial launch was made at the company’s Netherlands distribution center, but it needed some tweaking before it was a good fit for the larger Illinois site.

“We ship a lot of material, as much as $100 million a quarter. We take orders, pick, pack and ship,” explains Meekma. “Time is important. If we get an order at 10 a.m., we want to ship the same day. We have to have the order ready to ship. We can’t have the trucks waiting while we put the order together.”

Meekma estimates the new RTLS system has reduced space needs by 40 percent. It has produced a labor savings of 450 hours. The learning curve was short, too. The company had the system fully operational within six months, about 12 months shorter than a typical implementation period.

System Builder, according to Todd Wazny, director of professional services, was developed for large or small companies. It currently is being used by the Ford Motor Co.

Keeping track of inventory in a rail yard or shipping dock is extremely important, contends Henry King, a general manager with Paceco Corp.’s system group. The Hayward, California-based company has designed a Mobile Inventory Vehicle (MIV) system that utilizes a specially designed truck with a computerized, mounted camera that allows quick monitoring of stacked containers.

Drive-by Sorting Paceco Corp.’s Mobile Inventory Vehicle

King notes, “The customer base for the container shipping business is driven by how cost effectively and efficiently a container can be moved to its final destination. Often, many factors in the shipping process affect price and efficiency. They can include costs and time to transport a container on the highway or railway, to storing a container in a terminal yard, and onto a marine port to be loaded to an ocean-going vessel.”

Tighter inventory control is vital to success, industry experts say. Companies with strict inventory control can adjust quicker to industry and economic changes. “As the markets get more competitive, there’s more pressure to reduce inventory,” says Jon Schreibfeder, president of Effective Inventory Management, Inc. in Coppell, Texas. The company that closely monitors inventory can often find ways to “free up cash.” Effective inventory management, he adds, “allows a distributor to meet and exceed customer expectations of product availability. That can help a company maximize its profits.”

A company with too much inventory during a downturn can lose thousands, even millions of dollars. Meanwhile, one with a lean inventory can more easily adjust to buying trends.

Developing an effective inventory control plan requires a delicate balance between too much and too little. Timing is important. “When forced to reduce inventory, many distributors first look to get rid of dead stock and remove slow-moving inventory,” Schreibfeder cautions. “It is difficult to liquidate dead stock. If your customers don’t want this material, it probably will take a lot of effort to find someone who does want it.”

He adds, however, “Your customers may depend on you to have some slow-moving products always on the shelf just in case they need them. The availability of these products contributes to your reputation as a reliable supplier and helps to differentiate you from competitors.”

There’s no “one size fits all” system. Inventory systems are as diverse as the types of industries for which they are designed. Some are customized software packages that allow exporters to monitor merchandise, track orders and forecast refill need. Some programs come bundled with invoices and accounting features and can seamlessly integrate into a company’s existing accounting software packages such as QuickBooks. Others are comprehensive and include accounting systems. Popular bundles include NetSuite, Sage ERP X3, inFlow, Fishbowl Inventory and Red Prairie.

Some companies find creative uses for mass-produced software, tweaking it to solve inventory problems.

In 2008, the future was looking bleak for Limco Airepair Inc., an airplane parts maker based in Tulsa, Oklahoma. An announced move to North Carolina that was later rescinded initially caused panic. Employees and customers were leaving faster than rats from a sinking ship.

Adding to its woes, Limco was an airlines supplier in the midst of one of the nation’s worst economic downturns. Moreover, the global economy was also softening. The International Monetary Fund in its World Economic Outlook report declared: “The world economy is entering a major downturn in the face of the most dangerous financial shock in mature financial markets since the 1930s.”

Taking Stock Limco’s Ben Cunningham with a 777 heat exchanger.

Meanwhile, the world’s airlines lost $5 billion in 2008, reported the International Air Transport Association (IATA). Passenger growth had dwindled, air cargo shipments fell and the prospects for 2009 were not much better. The IATA forecast a $2.5 billion loss for the upcoming year.

Despite the softening economy that saw massive layoffs. Some Limco employees did not want to relocate. Airline customers were cutting their orders partly because of the economy and partly because they had lost confidence in the Limco’s stability. A cloud of doom was hanging overhead.

“We lost some key people and customers,” recalls Ben Cunningham, Limco’s general manager of materials. “It took a real effort to turn things around.”

A year later, the company’s new president, Paul Hall, ushered in change with a new manufacturing and inventory control strategy that would save the business. He and his team of experts repaired the leaking ship with small changes that improved the big picture. Today, Limco Inc. has returned to its lofty perch as a leading manufacturer of heat exchangers for the airlines industry.

Before the rebirth, the company’s export program was in free-fall. Export revenue had dropped below 19 percent. Forty percent of its revenue is now generated from export business. Foreign customers now include KLM Airlines, Lufthansa Airlines and Saudi Airlines as well as airlines in China, Taiwan and Singapore. Total revenues for 2012 are forecast to reach $32 million, nearly 50 percent more than last year.

To adopt the right system, “A company has to investigate the capabilities of the system,” explains Terry Harris, managing partner with Chicago Consulting, a supply-chain design engineering firm. “It all depends on the export nature of the business.”

Tighter inventory control can impact cash flow.

“A company with an effective system can experience cost reduction in the range of 10 to 20 percent, enjoy service-level improvements, keep their customers longer and capture competitors’ customers,” contends Harris.

Winning back customers was an important goal for Limco. That meant taking a nuts-and-bolts approach to inventory management: accounting for every part utilized in the manufacturing process. Though parts were counted and cataloged in the past, scrutiny became a priority. Reducing the number of repair parts it stocked was one factor in the success, explains Cunningham.

An inventory status sheet allows Cunningham to track and reduce the movement and storage of parts that are seldom used. In the past there may have been parts that sat collecting dust for months. Usage was another key factor in reducing the cost of maintaining inventory. “We reduced inventory to the point that we keep two months’ worth of parts on hand.”

For example, Limco used to waste a tremendous number of thermocouples because they were improperly installed. Cunningham reduced the number of thermocouples needed by carefully monitoring and changing how the part was being inserted. A careful eye to detail produced big savings for a small company that could not afford waste. It had spent $6,000 to $7,000 a month for that part. Now the same order of thermocouples may last through much of the year.

A cautious eye is important. “We’re mainly able to predict our needs by keeping better record of our parts usage. Attention to detail is one of the keys to developing an efficient inventory management system. The company’s inventory is lean. We are able to keep the parts we need and get the job done,” explains Cunningham.

Limco not only saves on parts and shipping costs, the company’s ability to predict parts usage allows it to negotiate better prices with suppliers.

What system does Limco use? “It’s the Ben Cunningham system,” he replies. “I just developed a philosophy and use what we have to monitor inventory better. What you watch gets better.”

In Fort Valley, Georgia, Tony Bass, founder and president of Super Lawn Technologies, a developer of specialty trucks and equipment for the landscaping industry, looks for a significant increase in export business to Canada. He believes the company can double those sales to 20 percent. Super Lawn, a privately held company generating annual revenue of nearly $5 million, is projected to deliver about 200 vehicles this year—double its previous production.

A hands-on entrepreneur who established the company after years of operating his own landscaping business, Bass developed an inventory system by tweaking QuickBooks, a bundled software program. Employing it with his customized visual monitoring program, he can adjust inventory faster than larger companies when economic and landscaping industry conditions warrant change.

“We don’t inventory,” Bass explains. “Since 2008, we went back to the drawing board to focus on building common parts. We reduced the amount of inventory we have to carry.”

Harris is a firm believer. “It’s important to keep track of inventory. In difficult times people look to cut back inventories. Failure to do so can diminish the ability to serve customers.”