In the typical buyer-supplier relationship, one company pays the other for products or services. But the relationship between Mitsubishi Caterpillar Forklift America (MCFA) and LeanCor Supply Chain Group is anything but typical. The two companies—the former a manufacturer and distributor of Cat, Mitsubishi, and Jungheinrich lift trucks, and the latter a third-party logistics service provider (3PL) and supply chain consulting firm—are simultaneously both buyer and supplier to each other. The unusual arrangement, they say, has produced long-term benefits for themselves and their customers, including the elimination of waste, reduced costs, and greater efficiency.
It all started in 2010, when MCFA hired LeanCor to manage its inbound and outbound domestic freight. The 3PL continues in that role today; in the past three years alone, it has helped MCFA cut its transportation expenses by over $2 million. After the relationship began, LeanCor expanded its capabilities, particularly in the area of lean logistics and supply chain operations. So about three years ago, MCFA invited LeanCor to implement a lean efficiency project at the forklift maker's facilities in Houston, recalls Jay Gusler, MCFA's executive vice president of operations.
As for how LeanCor would go about streamlining its client's operations, the company's strategy was to apply a "broader, supply chain point of view" to inbound materials, warehousing, manufacturing, and transportation, says Matt Melrose, LeanCor's chief operating officer. One improvement: Instead of a forklift delivering pallets with a day's worth of material from the warehouse to the production line, Jungheinrich tugger trains now run continuous loops to pick up and deliver about two hours' supply of material to workstations. The 3PL also reslotted MCFA's entire warehouse and introduced a program that involves spec'ing the packaging and lot sizes for purchased components "so we touch parts the fewest times possible before delivery to the line," Gusler says.
Meanwhile, LeanCor invited one of MCFA's dealers to quote a medium-sized fleet of Jungheinrich reach trucks for a distribution center the 3PL manages for one of its customers. MCFA won the order, and the partners began working together so closely, according to Gusler and Melrose, that one of the most frequently heard comments was "Do you have your buyer or your supplier hat on when you're asking that question?"
The relationship continues to deepen. Seven LeanCor employees work at MCFA in transportation, logistics, warehousing, and manufacturing. When MCFA develops new forklift models, LeanCor's operators test-drive them and provide feedback. In turn, LeanCor sometimes asks MCFA for ideas on solving plant and warehouse design problems. "It's not just about equipment," Melrose emphasizes. "We leverage each other's intellect for the betterment of our companies and therefore provide a better experience and greater satisfaction for both companies' clients."
Gusler notes that to be successful, this type of relationship requires special attention. "It takes more than the normal amount of trust and candor to be both supplier and customer to each other," he says. "But this unique relationship has worked well for both of us. We're always looking for ways to do more business together and help each other."