Outsourcing Logistics: Con-Way

Corrections or additions?

These articles were published in U.S. 1 Newspaper on December 15,

1999. All rights reserved.

Millennium Madness: Portable Generators

Here’s a press release that never would have come our

way but for Y2K and its attendant disaster-mongering: "Responding

to reports of an increase in the purchase of electric generators by

homeowners, Public Service Electric and Gas Company, New Jersey’s

largest electric and gas utility, urges consumers to exercise extreme

caution when buying and operating the units.

"Portable generators should be operated only when they are

isolated

from utility lines. Ordinarily, portable generators are connected

directly to an appliance or piece of equipment by a properly rated

extension cord. They should never be plugged into a wall outlet to

power an entire house.

"To safely connect an electric generator to your home or home

wiring system, have a licensed electrician install the generator and

a transfer switch. A transfer switch is a device that disconnects

the home’s wiring system from your utility’s wiring system, preventing

the generator from sending electricity out of the house into utility

service wires. A transfer switch must be installed by a licensed

electrician

and requires an electrical permit and inspection. Simply throwing

the main circuit breaker does not always successfully disconnect the

home electric system from utility lines, and circuit breakers have

been known to fail."

The release, dated December 10, quotes John V. Hughes, PSE&G’s

administrator for Distribution Environmental Health and Safety:

"Emergency

generators can provide an important back-up power supply for

homeowners

with special needs, such as medical equipment, refrigerators, sump

pumps, or office equipment."

"If a generator is plugged directly into a building’s circuits

without a positive disconnection between the home electric system

and the utility’s lines, the electricity from the generator will `back

feed’ — flow from the interior wiring of the house back out into

the nearby power lines." Hughes noted that if there are utility

workers

working on the same lines, they can be seriously injured or killed

by the flow of electricity from the generator. Hughes also warned

that when power is finally restored to the line, electricity flowing

back into the operating portable generator could damage it.

PSE&G’s safety tips for nervous customers installing backup

generators:

1.) Keep the generator in a well-ventilated area away

from combustible material. Do not operate a generator in your basement

or anywhere inside your home.

2.) Never refuel your generator while it is operating.

3.) If you have questions about the safe operation of

the generator with a particular appliance, consult the manufacturer

of the appliance to determine if any special measures should be taken.

4.) Read carefully the manual that comes with any new

electric generator to ensure safe operation. Customers who improperly

install, operate or maintain a generator are responsible for any

injury

or damage suffered by themselves, their neighbors or utilities.

The utility added the following disclaimer: "PSE&G does

not sell or install electric generators and does not provide

instructions

or advice about connecting them to building or home wiring systems.

To find a licensed electrician, consult your local phone

directory."

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Outsourcing Logistics: Con-Way

You have a great idea, and you can sell it, but you

can’t package it. it. Or you have a great idea, and you can package

it, but you can’t sell it or distribute it. Or maybe what you need

is an effective database.

At South River Park, a new warehouse center at Exit 8A, Con-Way

Integrated

Services can take any of 12 problem areas off your hands

(609-655-1400,

http://www.con-way.com).

Con-Way Transportation started out as a trucking firm in Chicago but

has grown to be a nationwide jack-of-all-trades. "We have state

of the art tools for managing transportation and logistics functions

for clients who would not be able to afford it," says Jim

Reid,

director of sales and marketing of the Chicago-based firm. "A

company that is growing like crazy can outsource their supply chain

to us. What they get is somebody to manage that business on a day

to day business."

The parent company was mainly an "LTL" or "less than truck

load" firm as opposed to a package delivery service or a full

truckload firm. Within the $2 billion parent firm, there are

subcompanies

that can supply chain management solutions, warehousing,

transportation

management services, distribution, logistics, telemarketing, all types

of fulfillment, and E-commerce.

For a variety of clients ranging in size from $500,000 to $5 million,

Con-Way can do value-added services to a product before the product

reaches its final destination. These services might include

relabeling,

ticketing, reboxing, repackaging, or even getting a shipment through

customs. Perhaps random samples need to be taken for a quality check

before a container is loaded onto a trailer, and then the container

needs to be repackaged and relabeled. All of this activity needs to

take place in a multipurpose warehouse. Cranbury’s is one of four

such facilities, and Con-Way expects to have a network of 10

warehouses

by next year.

Says Reid: "Nobody is going after the market we have — both

warehouses and transportation management." A client from Turkey,

for instance, can take orders but needs help on distribution. "We

create the invoice, mail the invoice, we source the order and clear

customs. All the client does is marketing and collecting."

For a company selling candles for home parties, the warehouse workers

will assemble kits, taking items from a dozen palettes and reboxing

them. Another client, dealing in automotive parts, may need the

workers

to handle sheet metal without denting it.

The new warehouse in Cranbury has state-of-the-art systems and its

client base is expanding by an account every couple of weeks. One

person needs to be hired for every two accounts. All the workers might

work in one area of the building for one week and move to a different

client the next week.

If a company needs 20,000 feet one month and 10,000 feet the next

month, Con-Way helps them meet those changing staffing and space

needs.

"We can give a price on per unit or per case basis, versus fixed

costs on labor and fixed costs on handling. We give predictability

and price-ability." The minimum charge is for 1,000 feet of

storage

and 1/2 a person, but some clients bill in the millions of dollars

per year, others do only $50,000 worth of business.

"We want to make our clients John Q and Mary Public look and feel

like a Wal-Mart. We give them the tools to understand their business

and get more control over it," says Reid, noting that his clients

have real-time access to their inventory on a variety of platforms.

"We use their inventory database with a software platform by

Descartes

Systems (from Toronto) that translates from anything, and we also

have a database engine. No one else is using this as we are, to

communicate

to the client and allow our systems to communicate with each

other."

— Barbara Fox


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