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Transportation and supply chain solutions for the bottom line
Reprinted from edge Ryder’s business magazine
a Ryder System, Inc. publication
LucentTechnologiesSupply Chain Solutions Brighten
Telecommunications Giant’s Future
Worldwide HeadquartersMiami, FL - USA
Regional HeadquartersAsia - Singapore
Canada - Toronto
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Ryder offers a complete array of leading-edge logistics, supply chainand transportation management solutions worldwide..
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©2005
RyderSystem,Inc.Allrights
reserved.3/05M
CC-666
At A Glance
Challenge
Rationalizing an oversized
facility network, duplicate
inventory and declining
market demand while
maintaining high levels of
customer service.
Solution
A strategic and outsourced
warehouse and customer
service network for the
Americas that is tightly
integrated to all service
delivery functions.
B e n e f i t s
A supply chain that can flex
and grow to meet market
demands while providing
dynamic improvements in
warehouse productivity,
cost-efficient inventory
levels and unparalleled
customer service.
Early in 2000, Lucent Technologies was faced with
this exact scenario, the market was heading south – and
fast – and product demand was slowing rapidly, its man-
agement poised for the worst.
LLuucceenntt
Headquartered in Murray Hill, N.J., Lucent (NYSE:
LU), designs and delivers the systems, services and software
that drive next-generation communications networks. The
company employs about 30,000 people worldwide and
reported revenues of approximately $9 billion in fiscal 2004.
WWiitthh DDeemmaanndd SSooaarriinngg,, IInnffrraassttrruuccttuurree GGrreeww RRaappiiddllyy..
Demand for Lucent’s technology products soared
in the late 1990s. Given the tremendous competitive pressure
on customer service and demand for quick turn around,
Lucent expanded its network of warehouses and customer
service locations by incorporating new facilities closer to
customer locations. By 1998, the number of warehouse
locations for finished goods reached an all-time high of
240. The results were increased distribution costs.
Lucent customer orders consist largely of thousands
of individual parts and components sourced from technology
suppliers in several geographic locations, says Anthony
Damelio, director of North American Region Logistics
for Lucent. Accordingly, these individual shipments must
arrive at specific assembly points in a pre-determined
sequence, where they are prepped and then delivered –
just-in-time – to installers working at a job site. And
often times, specialized material handling equipment such
as cranes, and stair-climbers are utilized on an as-needed
basis for specific project installations.
Efficiently managing all the material, as well as the
specialized equipment requires an in-depth understanding of
an efficient supply chain operation and of a comprehensive
and steady balance of time-sensitive components, says
Damelio. The people, equipment and components must all be
carefully coordinated to ensure an efficient deployment and
he strength of a company’s supply chain is
measured during time-sensitive, high-demand
market conditions as hundreds of products
are tr av eling through the supply ch ain
pipeline at breakneck speed. Its over all success is
determined by the steadfast dedication of the manage-
ment team to cost control, continuous improvement
and their abilit y to respond to the inevitable – when
the market takes an unexpected downward turn and
product demand heads south alongside it.
T
At A Glance
Challenge
Rationalizing an oversized
facility network, duplicate
inventory and declining
market demand while
maintaining high levels of
customer service.
Solution
A strategic and outsourced
warehouse and customer
service network for the
Americas that is tightly
integrated to all service
delivery functions.
B e n e f i t s
A supply chain that can flex
and grow to meet market
demands while providing
dynamic improvements in
warehouse productivity,
cost-efficient inventory
levels and unparalleled
customer service.
Early in 2000, Lucent Technologies was faced with
this exact scenario, the market was heading south – and
fast – and product demand was slowing rapidly, its man-
agement poised for the worst.
LLuucceenntt
Headquartered in Murray Hill, N.J., Lucent (NYSE:
LU), designs and delivers the systems, services and software
that drive next-generation communications networks. The
company employs about 30,000 people worldwide and
reported revenues of approximately $9 billion in fiscal 2004.
WWiitthh DDeemmaanndd SSooaarriinngg,, IInnffrraassttrruuccttuurree GGrreeww RRaappiiddllyy..
Demand for Lucent’s technology products soared
in the late 1990s. Given the tremendous competitive pressure
on customer service and demand for quick turn around,
Lucent expanded its network of warehouses and customer
service locations by incorporating new facilities closer to
customer locations. By 1998, the number of warehouse
locations for finished goods reached an all-time high of
240. The results were increased distribution costs.
Lucent customer orders consist largely of thousands
of individual parts and components sourced from technology
suppliers in several geographic locations, says Anthony
Damelio, director of North American Region Logistics
for Lucent. Accordingly, these individual shipments must
arrive at specific assembly points in a pre-determined
sequence, where they are prepped and then delivered –
just-in-time – to installers working at a job site. And
often times, specialized material handling equipment such
as cranes, and stair-climbers are utilized on an as-needed
basis for specific project installations.
Efficiently managing all the material, as well as the
specialized equipment requires an in-depth understanding of
an efficient supply chain operation and of a comprehensive
and steady balance of time-sensitive components, says
Damelio. The people, equipment and components must all be
carefully coordinated to ensure an efficient deployment and
he strength of a company’s supply chain is
measured during time-sensitive, high-demand
market conditions as hundreds of products
are tr av eling through the supply ch ain
pipeline at breakneck speed. Its over all success is
determined by the steadfast dedication of the manage-
ment team to cost control, continuous improvement
and their abilit y to respond to the inevitable – when
the market takes an unexpected downward turn and
product demand heads south alongside it.
T
often there is only a small window of opportunity. If a
shipment arrives too early, not only will it be in the way of
the installers, but it is susceptible to unnecessary damage and
threat of theft. If a shipment does not arrive on time at the
site, productive labor-hours are wasted, which negatively
affects a project’s timeline and can raise the risk of labor
overtime and cost overruns. Additionally, when cranes and
other heavy equipment are usually rented, it’s imperative to
maximize the job site productivity of all the deployed
resources, while minimizing the expense risk to Lucent.
BBuuiillddiinngg aann IInnffrraassttrruuccttuurree ffoorr tthhee NNeexxtt CCeennttuurryy
Lucent assigned Damelio to head a task force to
evaluate the supply chain function and propose a new
supply chain management strategy, including outsourcing
to a third party.
“At first, it wasn’t clear where we wanted to go,
or how we were going to get there, but we knew that we
needed to maintain a customer focus while we contained
and reduced costs,” says Damelio. At the time, the telecom
industry was in full swing, he recalls, and Lucent’s sales
divisions were regularly meeting and often exceeding very
lofty growth targets. “Was there really a need for any
planning or was this a purely reactive situation? And
what were our customers looking for? Those were the
issues we were working through initially.”
The team that was formed, had a cross-functional
representation from customer service and operations
functions within each of Lucent’s business units as well as
specialists from Lucent’s supply management group. The
team started by performing a full evaluation and baselined
Lucent’s current distribution model, with the focus on
establishing a solid foundation for the supply chain strategy.
A wide range of distribution functions such as order fill
rates, order turn time, inventory turn time, frequency of
duplicate inventory at neighboring facilities, the number
and purpose of ground carriers use at each facility, and
the use of express freight delivery were identified and
measured. “It took several months to map out all of our
existing locations and how products and materials were
moving within that infrastructure,” says Damelio.
The team quickly realized a traditional approach
to a Lead Logistics Provider (LLP) selection – crafting a
specific operational plan and then issuing a Request for
Proposal (RFP) from select service providers – wouldn’t
work for Lucent’s business needs.
“For us, the process became about finding the right
partner on the front end and to then develop the solution
together,” recalls Damelio. Their challenge shifted to
understanding the core competencies of all key Lead
Logistics Providers (LLP) in the marketplace. “Lucent
wanted one Lead Logistics Provider for the Americas,
and we needed to identify the company that had the
financial strength as well as the ability to be proactive in
identifying problems and in engineering and implementing
cost-effective solutions.”
Of particular concern to Lucent were the willingness
and availability the LLP had to take on risk. “We wanted
to know if they were going to stand up and say they were
accountable for the proposal, or if they were going to give
us advice, step away, and hope that it executed according to
plan,” says Damelio. “We wanted complete accountability.
We didn’t want to hear, ‘hey, we gave the order to this
provider; they’re responsible for that part of the overall
performance.’ We wanted a true partner – a company
that was willing to take ownership of the challenge and
one that was willing to be accountable for the results.”
LLuucceenntt SSoouugghhtt aa PPaarrttnneerr wwiitthh SSoolluuttiioonnss
Lucent realized that the number of 3PL service
providers that actually had the capacity to perform as
a Lead Logistics Provider for a complex distribution
scheme such as Lucent’s, were few and far between.
Ryder was among the companies that were invited to
propose ideas based on the conditions presented to them
by the Lucent team.
In mid-1999, after rigorous reviews with Ryder’s
executive team, the task force selected Ryder based on a
match between Lucent’s needs and Ryder’s core competencies
and proven experience as a Lead Logistics Provider. “The
Ryder solution was much more proactive and aggressive
than the other proposals we heard, and that was an element
we were searching for,” says Damelio, adding, “we selected
Ryder to be our Lead Logistics Provider for the Americas
because they were non-asset based, unbiased in their
decision making and had the right mix of core competencies:
transportation management, network engineering, project
management and execution, and the process discipline to
align these key functions.”
Ryder’s project management prowess provides a
tremendous boost to the partnership, says Damelio.
“We knew that Ryder’s greatest strength was around
transportation management, but their ability to coordinate the
merge-in-transit strategy and manage the heavy equipment
requirements for each project has proven to be a great
benefit not only for us, but for our customers as well.”
NNeettwwoorrkk RRaattiioonnaalliizzaattiioonn WWaass FFiirrsstt SStteepp
Ryder stepped in immediately to take on the
challenge of consolidating Lucent’s burgeoning infrastructure
S y n c h r o n i z i n g
t e c h n i c a l t e a m s ,
install ation
equipment and
technology
components t o the
right job site or
telecommunications
facility allows
for a thousand
just-in-time
install ations
every month.
Anthony
Damelio, direc-
tor of North
American Region
Logistics for
Lucent, leads the
Lucent teams
that are sup-
ported by
Ryder’s supply
chain solutions.
We selected Ryder to be our lead logistics provider for the Americasbecause they had the right mix of core competencies: transportation man-agement, network engineering, project management and execution, and thediscipline to align these key functions.”
Anthony DamelioDirector of North American Region Logistics, Lucent Technologies
“
often there is only a small window of opportunity. If a
shipment arrives too early, not only will it be in the way of
the installers, but it is susceptible to unnecessary damage and
threat of theft. If a shipment does not arrive on time at the
site, productive labor-hours are wasted, which negatively
affects a project’s timeline and can raise the risk of labor
overtime and cost overruns. Additionally, when cranes and
other heavy equipment are usually rented, it’s imperative to
maximize the job site productivity of all the deployed
resources, while minimizing the expense risk to Lucent.
BBuuiillddiinngg aann IInnffrraassttrruuccttuurree ffoorr tthhee NNeexxtt CCeennttuurryy
Lucent assigned Damelio to head a task force to
evaluate the supply chain function and propose a new
supply chain management strategy, including outsourcing
to a third party.
“At first, it wasn’t clear where we wanted to go,
or how we were going to get there, but we knew that we
needed to maintain a customer focus while we contained
and reduced costs,” says Damelio. At the time, the telecom
industry was in full swing, he recalls, and Lucent’s sales
divisions were regularly meeting and often exceeding very
lofty growth targets. “Was there really a need for any
planning or was this a purely reactive situation? And
what were our customers looking for? Those were the
issues we were working through initially.”
The team that was formed, had a cross-functional
representation from customer service and operations
functions within each of Lucent’s business units as well as
specialists from Lucent’s supply management group. The
team started by performing a full evaluation and baselined
Lucent’s current distribution model, with the focus on
establishing a solid foundation for the supply chain strategy.
A wide range of distribution functions such as order fill
rates, order turn time, inventory turn time, frequency of
duplicate inventory at neighboring facilities, the number
and purpose of ground carriers use at each facility, and
the use of express freight delivery were identified and
measured. “It took several months to map out all of our
existing locations and how products and materials were
moving within that infrastructure,” says Damelio.
The team quickly realized a traditional approach
to a Lead Logistics Provider (LLP) selection – crafting a
specific operational plan and then issuing a Request for
Proposal (RFP) from select service providers – wouldn’t
work for Lucent’s business needs.
“For us, the process became about finding the right
partner on the front end and to then develop the solution
together,” recalls Damelio. Their challenge shifted to
understanding the core competencies of all key Lead
Logistics Providers (LLP) in the marketplace. “Lucent
wanted one Lead Logistics Provider for the Americas,
and we needed to identify the company that had the
financial strength as well as the ability to be proactive in
identifying problems and in engineering and implementing
cost-effective solutions.”
Of particular concern to Lucent were the willingness
and availability the LLP had to take on risk. “We wanted
to know if they were going to stand up and say they were
accountable for the proposal, or if they were going to give
us advice, step away, and hope that it executed according to
plan,” says Damelio. “We wanted complete accountability.
We didn’t want to hear, ‘hey, we gave the order to this
provider; they’re responsible for that part of the overall
performance.’ We wanted a true partner – a company
that was willing to take ownership of the challenge and
one that was willing to be accountable for the results.”
LLuucceenntt SSoouugghhtt aa PPaarrttnneerr wwiitthh SSoolluuttiioonnss
Lucent realized that the number of 3PL service
providers that actually had the capacity to perform as
a Lead Logistics Provider for a complex distribution
scheme such as Lucent’s, were few and far between.
Ryder was among the companies that were invited to
propose ideas based on the conditions presented to them
by the Lucent team.
In mid-1999, after rigorous reviews with Ryder’s
executive team, the task force selected Ryder based on a
match between Lucent’s needs and Ryder’s core competencies
and proven experience as a Lead Logistics Provider. “The
Ryder solution was much more proactive and aggressive
than the other proposals we heard, and that was an element
we were searching for,” says Damelio, adding, “we selected
Ryder to be our Lead Logistics Provider for the Americas
because they were non-asset based, unbiased in their
decision making and had the right mix of core competencies:
transportation management, network engineering, project
management and execution, and the process discipline to
align these key functions.”
Ryder’s project management prowess provides a
tremendous boost to the partnership, says Damelio.
“We knew that Ryder’s greatest strength was around
transportation management, but their ability to coordinate the
merge-in-transit strategy and manage the heavy equipment
requirements for each project has proven to be a great
benefit not only for us, but for our customers as well.”
NNeettwwoorrkk RRaattiioonnaalliizzaattiioonn WWaass FFiirrsstt SStteepp
Ryder stepped in immediately to take on the
challenge of consolidating Lucent’s burgeoning infrastructure
S y n c h r o n i z i n g
t e c h n i c a l t e a m s ,
install ation
equipment and
technology
components t o the
right job site or
telecommunications
facility allows
for a thousand
just-in-time
install ations
every month.
Anthony
Damelio, direc-
tor of North
American Region
Logistics for
Lucent, leads the
Lucent teams
that are sup-
ported by
Ryder’s supply
chain solutions.
We selected Ryder to be our lead logistics provider for the Americasbecause they had the right mix of core competencies: transportation man-agement, network engineering, project management and execution, and thediscipline to align these key functions.”
Anthony DamelioDirector of North American Region Logistics, Lucent Technologies
“
of warehouses and distribution points. Working with its
internal force of network design specialists and system
engineers, Ryder was able to reduce the number of
Lucent’s network of brick and mortar sites from 240 to
a few dozen by early 2000 and then again to its current
count of 14 distribution sites.
“Our major role in those first months was to help
Lucent re-engineer its network and bring common
practices to common processes across its different business
units, all with an eye toward reducing total network
costs,” says Kam Smiley, Ryder’s director of customer
logistics for the Lucent account.
A highly diverse group of talent from both Ryder
and Lucent participated in the design and implementation
of changes to Lucent’s processes and infrastructure. Smiley
was able to tap into Ryder’s extensive pool of human
resources, bringing in teams of transportation and industrial
engineering experts as well as network design and analysis
specialists to assist with the Lucent challenge. Program
and project managers were also brought on board to
monitor progress and guide the transition to a successful
conclusion and implementation of changes.
Ryder also established a network of strategically
located Logistics Service Centers (LSC) to feed parts,
components, telecommunications switching equipment
and other materials to both Lucent installers and customers.
And at Ryder’s suggestion, Lucent’s two key suppliers,
Anixter and Graybar, maintained substantial amounts of
inventory at several of Lucent’s LSCs. This co-location
strategy facilitates smoother just-in-time deliveries to
installation sites while providing all three companies with
a more cost-effective supply chain model.
At the time, Lucent had a tremendous amount of
capital tied up in finished goods inventory, and Lucent’s
managers saw they could use the capital more effectively
in other aspects of Lucent’s long-term business plan. This
effort took on greater urgency as market conditions in
the tech sector started to display the first signs of weak-
ening. “As the business climate began to change late in
2000 and demand started to soften, we looked even more
closely at Lucent’s inventory situation,” says Smiley. “We
evaluated common processes, implemented technology to
provide greater visibility to Lucent’s materials, and had
our engineering team suggest a realignment of specific
segments of the supply chain. Everything we did was to
help Lucent engage in better decision-making processes
upstream to help their overall supply chain operations.”
The downward trend in market conditions added
urgency to the Ryder assignment, says Damelio. “Given
the softening of the market, it was critical for Lucent to
reduce the expense of maintaining so many fixed assets.”
Restructuring the network was huge for Lucent, and
much of the credit goes to Ryder; they did all the mapping
and planning for the re-engineered network. That con-
solidation was a key milestone for us.”
MMaarrkkeett DDoowwnnttuurrnn
“Ryder’s performance as market conditions began
to change for the telecommunications industry late in
2000 really drove home the value of the Lucent-Ryder
partnership,” explains Damelio. Through the development
and implementation of cost-cutting strategies, Ryder was
one tool used by Lucent to manage through a devastating
business downturn that proved fatal to many of Lucent’s
competitors in the telecommunications and technology
industries. These strategies coupled with disciplined
management and Ryder’s use of its market power to lever-
age advantageous cost and service commitments from the
industry, helped Lucent during the dot com bust.
“Over the last five years, we have dealt with dramatic
changes in our business environment,” says Damelio.
“Ryder used its logistics skill as well as its leverage in the
marketplace to help us contain our costs while providing
continuous improvements in operational efficiency and
customer service. The success of our collaborative efforts
in Lucent’s supply chain management helped us navigate
through those difficult waters.” It is a source of pride for
both Ryder and Lucent as they continually pushed their
providers as well as themselves to satisfy Lucent customers
at the highest level, says Damelio. “Together, we achieve
higher levels of customer satisfaction every day. We have
established a proven track record with our customers,
and they know we will do what we say we’re going to do.
That ability, the ability to meet customer commitments,
gives Lucent a tremendous advantage in this highly com-
petitive market.”
RRyyddeerr LLuucceenntt GGeett tthhee BBeesstt CCaarrrriieerr RRaatteess
Lucent’s next struggle centered on how to leverage
its transportation spending with a decline in its volume.
“Strategically, when you go from a $30 billion-plus company
in 1999 to something considerably smaller, you lose your
shipping leverage with your suppliers,” explains Damelio.
“Some suppliers asked us for rate increases and changes
to the terms of active contracts, while others simply
cancelled our contracts outright.”
Ryder stepped in and took charge of the situation.
“By aggregating and combining Lucent’s spending with
volumes Ryder already had with its carrier base, it was
able to negotiate favorable contracts on our behalf, and
manage that process for us,” says Damelio. “We initially
had some doubts and trepidation because some of the
carriers Ryder brought in were not familiar to the Lucent
family, but Ryder stepped up and assured us they would
be accountable for the end result.”
Lucent eased off and let the scene play out. Its con-
cerns quickly evaporated as the efficiency of the newcomers
in the carrier network became apparent. “Ryder’s ability to
leverage our transportation spending helped us stabilize the
cost structure within our own product lines,” Damelio says.
Ryder used its logistics skill as well as its leverage in the marketplace to
help us contain our costs while providing continuous improvements in oper-
ational efficiency and customer service. The success of our collaborative
efforts in Lucent’s supply chain management played a vital role in the sur-
vival during this period of time.”
Anthony DamelioDirector of North American Region Logistics, Lucent Technologies
“
Continous
improvement is a
core process for
Lucent and Ryder.
Shown below,
(left to right)
Jason Stefanides,
Group Logistics
Manager;
Anthony Damelio,
director of North
American Region
Logistics for
Lucent; and K am
Smiley, Ryder’s
director of cus-
tomer logistics
for the Lucent
account.
Ryder handles
virtually all
aspects of supply
chain management
for Lucent’s
business in the
Americas, including
net work design and
implementation;
negotiating, adminis-
tering and managing
contracts and rel a-
tionships with carri-
ers; shipment pl an-
ning and execution;
l and logistics
service bill payment
and audit.
of warehouses and distribution points. Working with its
internal force of network design specialists and system
engineers, Ryder was able to reduce the number of
Lucent’s network of brick and mortar sites from 240 to
a few dozen by early 2000 and then again to its current
count of 14 distribution sites.
“Our major role in those first months was to help
Lucent re-engineer its network and bring common
practices to common processes across its different business
units, all with an eye toward reducing total network
costs,” says Kam Smiley, Ryder’s director of customer
logistics for the Lucent account.
A highly diverse group of talent from both Ryder
and Lucent participated in the design and implementation
of changes to Lucent’s processes and infrastructure. Smiley
was able to tap into Ryder’s extensive pool of human
resources, bringing in teams of transportation and industrial
engineering experts as well as network design and analysis
specialists to assist with the Lucent challenge. Program
and project managers were also brought on board to
monitor progress and guide the transition to a successful
conclusion and implementation of changes.
Ryder also established a network of strategically
located Logistics Service Centers (LSC) to feed parts,
components, telecommunications switching equipment
and other materials to both Lucent installers and customers.
And at Ryder’s suggestion, Lucent’s two key suppliers,
Anixter and Graybar, maintained substantial amounts of
inventory at several of Lucent’s LSCs. This co-location
strategy facilitates smoother just-in-time deliveries to
installation sites while providing all three companies with
a more cost-effective supply chain model.
At the time, Lucent had a tremendous amount of
capital tied up in finished goods inventory, and Lucent’s
managers saw they could use the capital more effectively
in other aspects of Lucent’s long-term business plan. This
effort took on greater urgency as market conditions in
the tech sector started to display the first signs of weak-
ening. “As the business climate began to change late in
2000 and demand started to soften, we looked even more
closely at Lucent’s inventory situation,” says Smiley. “We
evaluated common processes, implemented technology to
provide greater visibility to Lucent’s materials, and had
our engineering team suggest a realignment of specific
segments of the supply chain. Everything we did was to
help Lucent engage in better decision-making processes
upstream to help their overall supply chain operations.”
The downward trend in market conditions added
urgency to the Ryder assignment, says Damelio. “Given
the softening of the market, it was critical for Lucent to
reduce the expense of maintaining so many fixed assets.”
Restructuring the network was huge for Lucent, and
much of the credit goes to Ryder; they did all the mapping
and planning for the re-engineered network. That con-
solidation was a key milestone for us.”
MMaarrkkeett DDoowwnnttuurrnn
“Ryder’s performance as market conditions began
to change for the telecommunications industry late in
2000 really drove home the value of the Lucent-Ryder
partnership,” explains Damelio. Through the development
and implementation of cost-cutting strategies, Ryder was
one tool used by Lucent to manage through a devastating
business downturn that proved fatal to many of Lucent’s
competitors in the telecommunications and technology
industries. These strategies coupled with disciplined
management and Ryder’s use of its market power to lever-
age advantageous cost and service commitments from the
industry, helped Lucent during the dot com bust.
“Over the last five years, we have dealt with dramatic
changes in our business environment,” says Damelio.
“Ryder used its logistics skill as well as its leverage in the
marketplace to help us contain our costs while providing
continuous improvements in operational efficiency and
customer service. The success of our collaborative efforts
in Lucent’s supply chain management helped us navigate
through those difficult waters.” It is a source of pride for
both Ryder and Lucent as they continually pushed their
providers as well as themselves to satisfy Lucent customers
at the highest level, says Damelio. “Together, we achieve
higher levels of customer satisfaction every day. We have
established a proven track record with our customers,
and they know we will do what we say we’re going to do.
That ability, the ability to meet customer commitments,
gives Lucent a tremendous advantage in this highly com-
petitive market.”
RRyyddeerr LLuucceenntt GGeett tthhee BBeesstt CCaarrrriieerr RRaatteess
Lucent’s next struggle centered on how to leverage
its transportation spending with a decline in its volume.
“Strategically, when you go from a $30 billion-plus company
in 1999 to something considerably smaller, you lose your
shipping leverage with your suppliers,” explains Damelio.
“Some suppliers asked us for rate increases and changes
to the terms of active contracts, while others simply
cancelled our contracts outright.”
Ryder stepped in and took charge of the situation.
“By aggregating and combining Lucent’s spending with
volumes Ryder already had with its carrier base, it was
able to negotiate favorable contracts on our behalf, and
manage that process for us,” says Damelio. “We initially
had some doubts and trepidation because some of the
carriers Ryder brought in were not familiar to the Lucent
family, but Ryder stepped up and assured us they would
be accountable for the end result.”
Lucent eased off and let the scene play out. Its con-
cerns quickly evaporated as the efficiency of the newcomers
in the carrier network became apparent. “Ryder’s ability to
leverage our transportation spending helped us stabilize the
cost structure within our own product lines,” Damelio says.
Ryder used its logistics skill as well as its leverage in the marketplace to
help us contain our costs while providing continuous improvements in oper-
ational efficiency and customer service. The success of our collaborative
efforts in Lucent’s supply chain management played a vital role in the sur-
vival during this period of time.”
Anthony DamelioDirector of North American Region Logistics, Lucent Technologies
“
Continous
improvement is a
core process for
Lucent and Ryder.
Shown below,
(left to right)
Jason Stefanides,
Group Logistics
Manager;
Anthony Damelio,
director of North
American Region
Logistics for
Lucent; and K am
Smiley, Ryder’s
director of cus-
tomer logistics
for the Lucent
account.
Ryder handles
virtually all
aspects of supply
chain management
for Lucent’s
business in the
Americas, including
net work design and
implementation;
negotiating, adminis-
tering and managing
contracts and rel a-
tionships with carri-
ers; shipment pl an-
ning and execution;
l and logistics
service bill payment
and audit.
SSoopphhiissttiiccaatteedd KKPPIIss MMoonniittoorr LLooggiissttiiccss PPeerrffoorrmmaannccee
In the initial phases of the Lucent-Ryder relationship,
managers at both companies evaluated progress by using
basic scorecard metrics, such as the pace of warehouse
closings, operating costs and order intervals. However, once
Ryder assumed the Lead Logistics Provider role, together
the companies formulated a sophisticated scorecard of key
performance indicators (KPI) to monitor the day-to-day
efficiency of the Lucent supply chain.
“Initially, when the timing and targets for a particular
project were agreed upon, we would evaluate Ryder’s ability
to map out that plan,” explains Damelio. “However, as
our relationship grew with Ryder in the Lead Logistics
Provider role and as we had a better grasp on the data and
could formalize better metrics together we were able to
collaborate more effectively on establishing metric targets.
Ryder saw the goals we had, and they knew from their
own experience with other customers the types of problems
we were likely to experience. And with Ryder’s insight,
we were able to sidestep some of those problems while
agreeing on metric targets.”
“Our collaboration in establishing a balanced scorecard
is an important aspect of the partnership,” Damelio adds.
“It’s much better for our partnership if we can decide jointly
on our goals, rather than have us dictate the metrics to them.
As we talk about targets, we start making proposals to each
other regarding time frames and other factors, and in doing
so, achieve continuous improvement by pushing through the
metrics, quarter over quarter.”
TThhee LLooggiissttiiccss MMaannaaggeemmeenntt RRoollee
With the challenges of network rationalization and
rate stabilization under control, Ryder continued in its Lead
Logistics Provider role, gradually adding new elements to
the operational portfolio. Currently, Ryder handles virtually
all aspects of logistics in their supply chain management for
Lucent’s business in the Americas, including network design
and implementation; negotiating, administering and
managing contracts and relationships with carriers and
other third-party logistics service providers; shipment
planning and execution; and logistics service bill payment
and audit.
Lucent and Ryder team members continue to
integrate, resulting in a symbiotic relationship between the
companies, which in turn facilitates greater collaborative
planning and execution of supply chain functions. To do so,
Ryder has helped connect customer operations with inte-
grated operations by situating key personnel at Lucent
facilities, such as Jason Stefanides, Group Logistics Manager,
who works out of Lucent’s Murray Hill headquarters, just
a few office doors down from Damelio, as well as additional
personnel in Lucent facilities in Columbus, Ohio; St. Louis,
Mo. and Alpharetta, Ga. Ryder provides the management
of Lucent’s supply chain operations from its Atlanta
Solution Center (ASC), also located in Apharetta.
“We’ve established a highly integrated network
between the two companies,” says Mike Caruso, Ryder’s
director of national accounts. “Anthony Damelio man-
ages a core group of Lucent people who serve as liaisons
and contact points for supply chain and logistics activities,
but Lucent for the most part has outsourced the logistics
element of their North and Central American supply
chain operations to us. We manage a cross-section of
third-party logistics providers on behalf of Lucent, and
in all cases, the accountability stops with us.”
LLuucceenntt RReelliieess oonn RRyyddeerr’’ss CCoonnttiinnuuoouuss IImmpprroovveemmeenntt
IInniittiiaattiivveess
Lucent counts on Ryder’s success with continuous
improvement programs to keep the lid on costs while
bringing greater efficiencies to the Lucent supply chain.
It’s a role Ryder not only has grown comfortable with
but also has embraced as a differentiating factor in the
supply chain marketplace, bringing bold new concepts
such as the LSC co-location strategy and a product returns
operation to Lucent as well as more modest concepts that
yield progressive improvements in overall efficiency.
“Continuous improvement is a core process for the
Ryder team,” says Caruso. “We’re constantly trying to
figure out ways to drive year-over-year improvement
with existing processes, but we’re also looking for ideas
and solutions that might drive a better process. Ryder’s
job is to “keep challenging our people and to keep going
back to Lucent and trying to push the envelope of
change,” says Caruso. “As an organization, we often end
up – not only at Lucent but with other customers as well
– suggesting ideas that two years ago might have been
shut down.
If we think the concept has merit, we keep pushing.
‘Here’s an idea that will drive savings. How do we get this
implemented? What can we do to convince you to get this
in a pilot?’ If we think the idea is beneficial for the customer,
it’s our responsibility to get that idea a fair hearing.”
This ability to identify opportunities for improve-
ments, coupled with the persistence to get the concepts
heard, evaluated and implemented, “adds to our value
for Lucent,” says Caruso. “It helps us keep our chair at
the table, and enables us to expand what we do for them.”
This talent is not lost on Lucent. “We know Ryder
has a lot of experience implementing continuous
improvement programs; it’s one of the things they bring
to the table, and it’s a key reason we chose them to be our
partner,” acknowledges Damelio. “Ryder brings in expe-
rience from other customers too, so we know that we’re
not dealing with a company that thinks they have the
know-how. With Ryder, we’re dealing with a company
that has proven practical experience in making it happen
for us and at other customer locations. That credibility
issue is a great advantage for us at Lucent.”
Lucent and
Ryder team
members continue
to integrate,
resulting in a
symbiotic rel a-
tionship bet ween
the companies,
which in turn
facilitates
greater coll abo-
rative pl anning
and execution
of supply chain
functions.
SSoopphhiissttiiccaatteedd KKPPIIss MMoonniittoorr LLooggiissttiiccss PPeerrffoorrmmaannccee
In the initial phases of the Lucent-Ryder relationship,
managers at both companies evaluated progress by using
basic scorecard metrics, such as the pace of warehouse
closings, operating costs and order intervals. However, once
Ryder assumed the Lead Logistics Provider role, together
the companies formulated a sophisticated scorecard of key
performance indicators (KPI) to monitor the day-to-day
efficiency of the Lucent supply chain.
“Initially, when the timing and targets for a particular
project were agreed upon, we would evaluate Ryder’s ability
to map out that plan,” explains Damelio. “However, as
our relationship grew with Ryder in the Lead Logistics
Provider role and as we had a better grasp on the data and
could formalize better metrics together we were able to
collaborate more effectively on establishing metric targets.
Ryder saw the goals we had, and they knew from their
own experience with other customers the types of problems
we were likely to experience. And with Ryder’s insight,
we were able to sidestep some of those problems while
agreeing on metric targets.”
“Our collaboration in establishing a balanced scorecard
is an important aspect of the partnership,” Damelio adds.
“It’s much better for our partnership if we can decide jointly
on our goals, rather than have us dictate the metrics to them.
As we talk about targets, we start making proposals to each
other regarding time frames and other factors, and in doing
so, achieve continuous improvement by pushing through the
metrics, quarter over quarter.”
TThhee LLooggiissttiiccss MMaannaaggeemmeenntt RRoollee
With the challenges of network rationalization and
rate stabilization under control, Ryder continued in its Lead
Logistics Provider role, gradually adding new elements to
the operational portfolio. Currently, Ryder handles virtually
all aspects of logistics in their supply chain management for
Lucent’s business in the Americas, including network design
and implementation; negotiating, administering and
managing contracts and relationships with carriers and
other third-party logistics service providers; shipment
planning and execution; and logistics service bill payment
and audit.
Lucent and Ryder team members continue to
integrate, resulting in a symbiotic relationship between the
companies, which in turn facilitates greater collaborative
planning and execution of supply chain functions. To do so,
Ryder has helped connect customer operations with inte-
grated operations by situating key personnel at Lucent
facilities, such as Jason Stefanides, Group Logistics Manager,
who works out of Lucent’s Murray Hill headquarters, just
a few office doors down from Damelio, as well as additional
personnel in Lucent facilities in Columbus, Ohio; St. Louis,
Mo. and Alpharetta, Ga. Ryder provides the management
of Lucent’s supply chain operations from its Atlanta
Solution Center (ASC), also located in Apharetta.
“We’ve established a highly integrated network
between the two companies,” says Mike Caruso, Ryder’s
director of national accounts. “Anthony Damelio man-
ages a core group of Lucent people who serve as liaisons
and contact points for supply chain and logistics activities,
but Lucent for the most part has outsourced the logistics
element of their North and Central American supply
chain operations to us. We manage a cross-section of
third-party logistics providers on behalf of Lucent, and
in all cases, the accountability stops with us.”
LLuucceenntt RReelliieess oonn RRyyddeerr’’ss CCoonnttiinnuuoouuss IImmpprroovveemmeenntt
IInniittiiaattiivveess
Lucent counts on Ryder’s success with continuous
improvement programs to keep the lid on costs while
bringing greater efficiencies to the Lucent supply chain.
It’s a role Ryder not only has grown comfortable with
but also has embraced as a differentiating factor in the
supply chain marketplace, bringing bold new concepts
such as the LSC co-location strategy and a product returns
operation to Lucent as well as more modest concepts that
yield progressive improvements in overall efficiency.
“Continuous improvement is a core process for the
Ryder team,” says Caruso. “We’re constantly trying to
figure out ways to drive year-over-year improvement
with existing processes, but we’re also looking for ideas
and solutions that might drive a better process. Ryder’s
job is to “keep challenging our people and to keep going
back to Lucent and trying to push the envelope of
change,” says Caruso. “As an organization, we often end
up – not only at Lucent but with other customers as well
– suggesting ideas that two years ago might have been
shut down.
If we think the concept has merit, we keep pushing.
‘Here’s an idea that will drive savings. How do we get this
implemented? What can we do to convince you to get this
in a pilot?’ If we think the idea is beneficial for the customer,
it’s our responsibility to get that idea a fair hearing.”
This ability to identify opportunities for improve-
ments, coupled with the persistence to get the concepts
heard, evaluated and implemented, “adds to our value
for Lucent,” says Caruso. “It helps us keep our chair at
the table, and enables us to expand what we do for them.”
This talent is not lost on Lucent. “We know Ryder
has a lot of experience implementing continuous
improvement programs; it’s one of the things they bring
to the table, and it’s a key reason we chose them to be our
partner,” acknowledges Damelio. “Ryder brings in expe-
rience from other customers too, so we know that we’re
not dealing with a company that thinks they have the
know-how. With Ryder, we’re dealing with a company
that has proven practical experience in making it happen
for us and at other customer locations. That credibility
issue is a great advantage for us at Lucent.”
Lucent and
Ryder team
members continue
to integrate,
resulting in a
symbiotic rel a-
tionship bet ween
the companies,
which in turn
facilitates
greater coll abo-
rative pl anning
and execution
of supply chain
functions.
YOU NAME IT
We’ll Customize A Supply Chain Solution For ItWherever you manufacture, however you store inventory and distribute products, Ryder designs and operatesend-to-end supply chain solutions that deliver a competitive advantage for businesses like yours. Unmatchedexperience, flexibility and expertise make Ryder the company that other companies rely on around the globe. So, if youwant to maximize efficiency, enhance visibility and improve customer satisfaction, just name it, and we'll get it done.Call 1-888-88-RYDER or visit www.ryder.com.
S U P P L Y C H A I N , W A R E H O U S I N G & T R A N S P O R T A T I O N S O L U T I O N S
©2005 Ryder System, Inc. All rights reserved.
Transportation and supply chain solutions for the bottom line
Reprinted from edge Ryder’s business magazine
a Ryder System, Inc. publication
LucentTechnologiesSupply Chain Solutions Brighten
Telecommunications Giant’s Future
Worldwide HeadquartersMiami, FL - USA
Regional HeadquartersAsia - Singapore
Canada - Toronto
Europe - London, U.K.
Mexico - Mexico City
South America - Buenos Aires, Argentina
Ryder offers a complete array of leading-edge logistics, supply chainand transportation management solutions worldwide..
Supply Chain SolutionsLead Logistics ManagementInbound Manufacturing Product FlowNetwork DesignProfessional ServicesIntegrated Logistics
Warehouse SolutionsWarehouse Facilities ManagementCross-dockingVendor-Managed InventoryMulti-client/Shared FacilitiesFacility Network Design and PlanningFacility DesignProfessional Services
Transportation SolutionsDedicated Contract CarriageCarrier ProcurementShipment Planning and ExecutionFreight Bill Audit and PayMode OptimizationFreight BrokerageTransportation Management System (TMS)Global Trade
Fleet Management SolutionsFull Service Leasing Lease FinancingProgrammed MaintenanceRyder Customer Response CenterCommercial Truck RentalVehicle Sales
1-888-88-RYDERor 1-888-887-9337www.ryder.com
If outside the U.S. and Canada, call:585. 264. 4330
©2005
RyderSystem,Inc.Allrights
reserved.3/05M
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