G & D Integrated

Climbing the rankingsG&D Integrated began as a trucking company, but it has found most of its growth from offering supply chain and manufacturing logistics support to its customers, Keith Regan reports.┬á Although it has a long history that stretches to its roots as a freight hauler in the horse-and-wagon days of the 1880s, Morton, IllinoisÔÇôbased G&D Integrated has rapidly become a top-tier provider of inbound supply chain logistics. The privately owned companyÔÇÖs most important transformation from lower-tier trucking and logistics firm began, according to its president, Kent Kallina, when it made the decision to remain an asset-based provider while taking on inventory and supply chain responsibilities for its customers. ÔÇ£We made our supply chain focus very close to the point of execution for our customers,ÔÇØ Kallina says. Most of G&DÔÇÖs customers are original equipment manufacturers in one of two specialty areas: construction equipment and mining machinery. The mix of customers has helped the company weather the downturn in the housing market, with the surge in commodity prices driving demand for mining gear. The company expects to have 2008 revenues of around $192 million and currently has 1,800 employees at six primary locations across the Midwest as well as trucking terminals, business units, and on-site service arrangements in 16 additional locations in the Midwest and Southeast US. For those manufacturers, G&D has taken on an increasing amount of the workload on the supply chain side, expanding its expertise to enable it to perform tasks such as partial assembly and kit preparation, and to provide customers with modules rather than individual parts where possible. ÔÇ£ItÔÇÖs about taking that inventory and adding value on the way through. Rather than simply delivering individual items, we assemble them to the component level and deliver them in sequence with the assembly line,ÔÇØ Kallina says. Capabilities range from kitting and parts painting to quality control and component testing, as well as large- and small-scale assemblies, vendor-managed inventory, and logistics and materials planning. Of course, manufacturers expect an outsourced option to be more cost-effective in the short and long term, which creates pressure on G&D to operate at maximum efficiency and constantly seek ways to do what it does better. The specific approach to those improvements may vary by customer. For instance, one major customer has begun to embrace the Toyota Production System approach to lean manufacturing, and G&D is now training the workers on that account in many of the same techniques. ÔÇ£WeÔÇÖre involved in a lot of the management and manufacturing concepts that customers are identifying as the ones that will work for them,ÔÇØ says Kallina. ÔÇ£We donÔÇÖt often get price increases even in a boom cycle, and with benefits and wages always going on an upward cycle, you need to find ways to increase your efficiency,ÔÇØ he adds. Those efforts are likely to increase in importance as the manufacturing part of the business grows and as the company continues to build out its expertise. One of G&DÔÇÖs customers sought to expand its partnership with an eye toward driving five percent cost savings. Reductions were found in consolidating overlapping job functions, improving kitting and material presentation processes, and rethinking assembly planning to improve material flow. With G&D handling shipment monitoring and handling materials to the point of use, the partnership drove savings of ten percent within a year. Leading the push into the manufacturing logistics space has been the firmÔÇÖs engineering services division, a team assembled with solving customer problems in mind. ÔÇ£WeÔÇÖre designing the process with the customerÔÇÖs critical characteristics and critical cost issues in place,ÔÇØ Kallina says. That may mean everything from tooling fixtures to controls engineering and programming logic controls. ÔÇ£When we started moving into the manufacturing arena, we invested heavily in capital and technology. We made the decision to take a very high-end approach.ÔÇØ Investments were made in robotic welding capabilities, for instance, with in-house expertise built up in tooling design and programming robotic cells. Another of G&DÔÇÖs value propositions is the technology it brings to bear on customerÔÇÖs manufacturing operations. ÔÇ£We invest heavily in technology,ÔÇØ Kallina says. ÔÇ£Many of our customers have legacy systems that are outdated, and weÔÇÖre able to come in and provide a lot of visibility on the data side, to enable those customers to see from the virtual world perspective whatÔÇÖs happening in the real world.ÔÇØ For instance, in 2003 G&D opened a warehouse and kitting facility for a customer, synchronizing G&DÔÇÖs ERP system with the customerÔÇÖs in order to process sales forecasts, purchase orders, build requirements, and inventory adjustment requests from the customer and provide updates on inventory levels to the customer every 15 minutes. Inventory accuracy soared from around 80 percent to more than 99 percent after the project was outsourced to G&D. G&D also used its systems to drive the customerÔÇÖs overseas procurement through international logistics providers.Over the years, all of G&DÔÇÖs growth has come organically, according to vice president of marketing Charles Purcell. ÔÇ£WeÔÇÖve looked at acquiring competitors from time to time, but the numbers donÔÇÖt make sense in most cases,ÔÇØ he says. With the logistics industry becoming increasingly consolidated, growth comes in large measure from being able to sell more services to existing customers. G&D is eyeing expansion possibilities into Canada, and Purcell said the recent exchange rate fluctuations have caused some customers who typically source components from Japan to bring some of that work back into North America. As it has grown, G&D has sought to retain much of the small-firm feel and culture. The company is currently planning to organize a mission to Appalachia from its employee base, and in 2005 some employees at a G&D facility in Bartonville, Illinois, volunteered their time to help organize and load shipments of supplies being sent to the hurricane-ravaged community of Biloxi, Mississippi. ÔÇ£We feel we bring a lot of high-level skills and expertise to our customers, but we also think weÔÇÖre still on the learning curve and have room to grow even more as far as being efficient and effective in our own work,ÔÇØ Kallina adds. ┬á