West International couldn't afford the complex IT systems needed for tracking the drugs it supplies to cruise ships. Then it found an "on demand" program that does everything it needs and more.
David Maloney has been a journalist for more than 35 years and is currently the group editorial director for DC Velocity and Supply Chain Quarterly magazines. In this role, he is responsible for the editorial content of both brands of Agile Business Media. Dave joined DC Velocity in April of 2004. Prior to that, he was a senior editor for Modern Materials Handling magazine. Dave also has extensive experience as a broadcast journalist. Before writing for supply chain publications, he was a journalist, television producer and director in Pittsburgh. Dave combines a background of reporting on logistics with his video production experience to bring new opportunities to DC Velocity readers, including web videos highlighting top distribution and logistics facilities, webcasts and other cross-media projects. He continues to live and work in the Pittsburgh area.
If you've ever been treated for an illness or injury aboard a cruise ship, you probably didn't give much thought to where the Band-Aids or antihistamines came from. Even if you had, you'd most likely have assumed it was a regular medical supply house. But in all likelihood, the supplier was a company like West International Medical Supplies—one of a growing number of specialized distributors that focus on serving cruise ships and other remote locations. That's a bigger business than you might expect. Today's vessels boast full medical facilities: emergency first aid suites, pharmacies, even operating rooms—everything a typical hospital would have, except on a much smaller scale.
Established in 2008 as the U.S. arm of Britain-based L.E. West Ltd., West International maintains offices and a distribution center near Fort Lauderdale in Davie, Fla. The advantages of being located in the Fort Lauderdale area, the heart of the cruise industry, are clear enough. "Our unique selling point is that we are in Florida, where every major cruise line has headquarters," says Mark Galluzzo, vice president of West International. "My major competitors are in New York and Seattle."
But it also has its drawbacks. Florida has the strictest pedigree requirements for pharmaceutical distribution of any state in the union. The state's Prescription Drug Safety Act, which took effect in 2006, requires distributors to track products down to the lot number and expiration date as they flow throughout the supply chain. These stringent requirements caused approximately 1,200 pharmaceutical wholesalers to flee the state during the past five years.
Complying with the pedigree law requires robust software capable of gathering, tracking, and sharing relevant data with customers and state regulators. That presented a problem for West International. As a newcomer to the U.S. market, the company couldn't afford the complex IT infrastructure other pharmaceutical distributors use to meet these requirements. It would have to find another way to keep detailed records on the items moving through its supply chain while still meeting customers' demands for swift order turnaround.
At your service
The company solved the problem by going with a warehouse management system (WMS) delivered on a software-as-a-service (SaaS) basis. It signed on to use San Francisco-based SmartTurn's Inventory and Warehouse Management System (SmartTurn has since been acquired by RedPrairie, and the system is currently being rebranded as RedPrairie's On-Demand WMS). The system essentially allows West International to outsource most of its IT functions, storing the hardware, software, and data offsite. The company simply accesses the system when needed.
For West International, the SaaS approach offered a number of advantages. The company was able to avoid a huge upfront capital outlay for software licenses; instead, it simply pays a monthly "rental" fee to the vendor. It also avoided the hassles and expense of a lengthy implementation. Galluzzo reports that the system was up and running in a month—a fraction of the time needed for WMS implementations he's been involved with elsewhere. And because the vendor maintains the application on the server end (including secure backup systems), West International doesn't have to devote in-house resources to servicing and updating the system. All the company needs are a computer and a T-1 line.
"We are pharmacists, not IT people. We did not want to invest in an IT infrastructure," explains Galluzzo. "SmartTurn allows us to track every single item that comes into our warehouse. Anything we need, it can do—and at a price point where we could not lose."
Making waves
Today, West International uses the system to track thousands of products throughout its network. As incoming shipments arrive at the Florida warehouse, workers sort the items by SKU, lot, and expiration date and place them in containers. Meanwhile, a bar-code label "license plate" is generated for each container. When the sorting is finished, workers attach the labels to containers and scan the bar codes in order to capture the data for the SmartTurn system.
From receiving, most supplies and pharmaceuticals are moved via cart to storage. As workers in the storage area place the containers on shelves, they scan the storage location's bar code so the SmartTurn software will know which products are stored where. The system then sends the updated information to West International's QuickBooks software, which keeps track of inventory.
Orders at the Florida DC are received through QuickBooks and then transferred to the SmartTurn WMS for processing. The system generates a paper pick list for each order that specifies the location, item SKU, lot number, expiration date, and quantity of products to pick. As pickers select the items, they verify the information against the list. Before shipping, orders undergo a final review to assure accuracy, which currently stands at greater than 99 percent. Order accuracy is particularly critical for West International because of the obvious difficulty of replacing incorrect items once customers are at sea.
"We can't afford returns. It has to be accurate. No mistakes is our goal," says Galluzzo.
After final inspection, orders move on to a checkout area, where an associate at a terminal keys in the data to complete the order. Once it receives the data, SmartTurn passes it along to QuickBooks for inventory updating and billing. The system also generates a printed copy of the tracking data, with lot numbers and expiration dates, for inclusion in the shipment to the customer. SmartTurn provides similar tracking data to a third-party provider that generates reports for the state of Florida as part of the compliance process. Galluzzo says he eventually hopes to bring the state reporting function in house.
Smooth sailing
As for how the software has performed so far, Galluzzo has nothing but praise. "The price and flexibility of the system as well as the people we work with at SmartTurn have been fantastic," he says. "I have done a lot of software implementations and it can be painful. But this has been an absolute pleasure."
The results have been impressive too, he says. Not only has the SmartTurn system eased the compliance burden, but it also reduced order turnaround times. That's a huge plus for a supplier to the cruise ship industry, where delivery windows are tight—cruise ships are only in port for a short time—and orders tend to be complex. (Because ships have to stock a wide range of products in a limited space, an order may contain 50 to 100 line items but in very small quantities—say, six cotton balls or eight pills.) The SmartTurn software allows West International to turn orders the same day, which is a huge competitive advantage.
But perhaps the best endorsement of the system is Galluzzo's advice to West International's parent company, which is grappling with the demands of rapid growth. With business expanding at a rate of nearly 30 percent a year, L.E. West's paper-based system is reaching the limits of its capacity. Rather than put further strain on the system, Galluzzo is recommending that the U.K. operation replace it with something different—a solution similar to SmartTurn.
The number of container ships waiting outside U.S. East and Gulf Coast ports has swelled from just three vessels on Sunday to 54 on Thursday as a dockworker strike has swiftly halted bustling container traffic at some of the nation’s business facilities, according to analysis by Everstream Analytics.
As of Thursday morning, the two ports with the biggest traffic jams are Savannah (15 ships) and New York (14), followed by single-digit numbers at Mobile, Charleston, Houston, Philadelphia, Norfolk, Baltimore, and Miami, Everstream said.
The impact of that clogged flow of goods will depend on how long the strike lasts, analysts with Moody’s said. The firm’s Moody’s Analytics division estimates the strike will cause a daily hit to the U.S. economy of at least $500 million in the coming days. But that impact will jump to $2 billion per day if the strike persists for several weeks.
The immediate cost of the strike can be seen in rising surcharges and rerouting delays, which can be absorbed by most enterprise-scale companies but hit small and medium-sized businesses particularly hard, a report from Container xChange says.
“The timing of this strike is especially challenging as we are in our traditional peak season. While many pulled forward shipments earlier this year to mitigate risks, stockpiled inventories will only cushion businesses for so long. If the strike continues for an extended period, we could see significant strain on container availability and shipping schedules,” Christian Roeloffs, cofounder and CEO of Container xChange, said in a release.
“For small and medium-sized container traders, this could result in skyrocketing logistics costs and delays, making it harder to secure containers. The longer the disruption lasts, the more difficult it will be for these businesses to keep pace with market demands,” Roeloffs said.
The British logistics robot vendor Dexory this week said it has raised $80 million in venture funding to support an expansion of its artificial intelligence (AI) powered features, grow its global team, and accelerate the deployment of its autonomous robots.
A “significant focus” continues to be on expanding across the U.S. market, where Dexory is live with customers in seven states and last month opened a U.S. headquarters in Nashville. The Series B will also enhance development and production facilities at its UK headquarters, the firm said.
The “series B” funding round was led by DTCP, with participation from Latitude Ventures, Wave-X and Bootstrap Europe, along with existing investors Atomico, Lakestar, Capnamic, and several angels from the logistics industry. With the close of the round, Dexory has now raised $120 million over the past three years.
Dexory says its product, DexoryView, provides real-time visibility across warehouses of any size through its autonomous mobile robots and AI. The rolling bots use sensor and image data and continuous data collection to perform rapid warehouse scans and create digital twins of warehouse spaces, allowing for optimized performance and future scenario simulations.
Originally announced in September, the move will allow Deutsche Bahn to “fully focus on restructuring the rail infrastructure in Germany and providing climate-friendly passenger and freight transport operations in Germany and Europe,” Werner Gatzer, Chairman of the DB Supervisory Board, said in a release.
For its purchase price, DSV gains an organization with around 72,700 employees at over 1,850 locations. The new owner says it plans to investment around one billion euros in coming years to promote additional growth in German operations. Together, DSV and Schenker will have a combined workforce of approximately 147,000 employees in more than 90 countries, earning pro forma revenue of approximately $43.3 billion (based on 2023 numbers), DSV said.
After removing that unit, Deutsche Bahn retains its core business called the “Systemverbund Bahn,” which includes passenger transport activities in Germany, rail freight activities, operational service units, and railroad infrastructure companies. The DB Group, headquartered in Berlin, employs around 340,000 people.
“We have set clear goals to structurally modernize Deutsche Bahn in the areas of infrastructure, operations and profitability and focus on the core business. The proceeds from the sale will significantly reduce DB’s debt and thus make an important contribution to the financial stability of the DB Group. At the same time, DB Schenker will gain a strong strategic owner in DSV,” Deutsche Bahn CEO Richard Lutz said in a release.
Transportation industry veteran Anne Reinke will become president & CEO of trade group the Intermodal Association of North America (IANA) at the end of the year, stepping into the position from her previous post leading third party logistics (3PL) trade group the Transportation Intermediaries Association (TIA), both organizations said today.
Meanwhile, TIA today announced that insider Christopher Burroughs would fill Reinke’s shoes as president & CEO. Burroughs has been with TIA for 13 years, most recently as its vice president of Government Affairs for the past six years, during which time he oversaw all legislative and regulatory efforts before Congress and the federal agencies.
Before her four years leading TIA, Reinke spent two years as Deputy Assistant Secretary with the U.S. Department of Transportation and 16 years with CSX Corporation.
National nonprofit Wreaths Across America (WAA) kicked off its 2024 season this week with a call for volunteers. The group, which honors U.S. military veterans through a range of civic outreach programs, is seeking trucking companies and professional drivers to help deliver wreaths to cemeteries across the country for its annual wreath-laying ceremony, December 14.
“Wreaths Across America relies on the transportation industry to move the mission. The Honor Fleet, composed of dedicated carriers, professional drivers, and other transportation partners, guarantees the delivery of millions of sponsored veterans’ wreaths to their destination each year,” Courtney George, WAA’s director of trucking and industry relations, said in a statement Tuesday. “Transportation partners benefit from driver retention and recruitment, employee engagement, positive brand exposure, and the opportunity to give back to their community’s veterans and military families.”
WAA delivers wreaths to more than 4,500 locations nationwide, and as of this week had added more than 20 loads to be delivered this season. The wreaths are donated by sponsors from across the country, delivered by truckers, and laid at the graves of veterans by WAA volunteers.
Wreaths Across America
Transportation companies interested in joining the Honor Fleet can visit the WAA website to find an open lane or contact the WAA transportation team at trucking@wreathsacrossamerica.org for more information.