Nonprofit logistics subcontractor gives the disabled a chance to earn their stripes

The one thing to know about Brian Eddy is that he never turns away a person who wants to work.

Eddy is general manager, business development and marketing for Olean, N.Y.-based The Rehabilitation Center, a nonprofit organization that hires individuals with disabilities—many of a profound nature—to work in its various divisions. Perhaps the most visible of its operations is SubCon Industries, which delivers forward and reverse logistics services for large third-party providers (3PLs) that would rather offload the overflow work than do it themselves.

SubCon, based just south of Buffalo and the Canadian border, employs more than 200 people. For some of them, the division may be their only viable option for employment, Eddy said, adding that while the general unemployment rate hovers around 9 percent, the unemployment rate among disabled persons is about 75 percent.

Formed nearly 50 years ago to provide so-called forward logistics solutions, SubCon in 2005 expanded into the reverse logistics segment. Though forward logistics accounts for about 80 percent of SubCon's business mix, the reverse logistics business is growing at about 100 percent a year and will likely surpass the division's traditional forward logistics operations within the next few years, Eddy said.

SubCon didn't enter the reverse logistics business just because it was a high-demand segment of the market that many Tier I 3PLs did not want to play in, Eddy said. It expanded because reverse logistics is considered a labor-intensive discipline and it fit with the unit's mandate to employ any disabled person who wants to work.

"Our management likes the number of jobs it has created and its huge upside potential," Eddy said. "And this is our main goal, maximizing job creation for more folks."

Expanding opportunities
Connecting the disabled with supply chain opportunities is not a new concept. The most well-known example was the 2007 launch by drugstore giant Walgreen Co. to employ people with disabilities at its newly opened distribution center in Anderson, S.C. Today, workers with disabilities make up 40 percent of the workforce at that location, according to the company. Walgreen is so pleased with the results that it has expanded the program to other facilities, most recently at its new DC in Connecticut.

Walgreen and SubCon share the same core mission and values in helping the disabled find work. However, as a publicly traded entity tasked with making a profit for its shareholders, Walgreen must also examine whether the workers are delivering dollars-and-cents value for the company's investment, Eddy said. As a unit of a non-profit organization, SubCon isn't subject to that imperative.

Eddy could not comment in detail on its relationships with 3PLs, saying that myriad nondisclosure agreements with those companies prevent him from doing so. He said that the division would like to work more directly with shippers, but isn't sure how to go about reshaping its existing business model to do so. "We don't know how to reach out to these folks, but I suspect we could bring a lot of value to the table," he said.

Eddy said SubCon's value proposition, which is to offer the services of loyal, hard-working employees who are versatile enough to perform any number of needed tasks at a reasonable cost, will become more relevant in a tough economy as companies look to reduce costs and optimize their networks. They'll also put pressure on their Tier I providers to do the same.

"This is the perfect time for them to explore the many benefits and the value that nonprofit providers can bring to the table," he said.

But for all the value it may bring to shippers and 3PLs, SubCon understands that its reward comes in providing a paycheck and a purpose to those who might otherwise have neither.

As SubCon states in its brochure, helping workers with disabilities find meaningful employment is "the right thing to do." Eddy adds, "It's nice to see all the smiles each payday."