November 2004 | Case Studies | Reader Profile

Drew Alexander: Building Logic and Discipline Into the Supply Chain

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You could say Drew Alexander grew up with Wal-Mart.

As a boy in Bentonville, Ark., he worked at a local pancake house where Sam Walton sometimes ate. "I never got a tip from Sam," he says.

Throughout his teens, he loaded trucks at a Wal-Mart distribution center. And he later took a job in the company's "tab logistics" department, working with vendors and carriers to make sure the items listed in the monthly tabloid advertising insert made it into every store as promised.

It has been six years since Alexander left Wal-Mart, but the imprint of his early training there remains strong. "The culture, the mindset, the high level of integrity, and the sense of urgency that Wal-Mart instills in you—I still identify that in myself," he says.

Alexander is now director of supply chain/logistics at Apex Digital, which calls itself the fastest-growing company in consumer electronics history. Arriving last year at the Ontario, Calif.-based manufacturer, he quickly set about building greater logic and discipline into its supply chain.

Founded in 1999, Apex has skyrocketed into a $1-billion purveyor of DVD players, TVs, and other home entertainment products. But the dizzying sales growth spurred an ad-hoc approach to logistics, Alexander says. As containerloads of Apex products poured into California, the company brought on numerous third-party logistics providers to handle the volume.

Managing these multiple relationships and warehouses proved to be a challenge. "We needed better visibility of our import process, so we'd know what was coming in before it hit and could avoid per diem and demurrage charges down the line," Alexander says.

He implemented a process to track orders at overseas factories, keeping tabs on when they left Asia and landed in the United States. Better visibility has helped Apex shrink its domestic distribution from 13 locations to four, all in the Los Angeles area.

But consolidation brings headaches of its own, especially for a vendor that needs to get product to market in time for the holidays.

"It's always challenging managing the heavy season and, quite frankly, things don't look any better this year," Alexander says.

Congestion at the Port of Long Beach and a shortage of truck capacity make it tough to move huge volumes to store shelves all over the county. With 70 percent of its customers east of the Rio Grande, but 95 percent of distribution coming off the West Coast, Apex plans to open some strategically placed regional DCs next year.

Landing cargo from China in East Coast ports is more expensive than landing at the Port of Long Beach, however. If customers want goods to arrive promptly, they must allow Apex to build some of the extra expense into the cost of its products, Alexander says.

"There should be a value to retailers such as Wal-Mart, Sears, and Circuit City if the vendor is able to get their freight to the retailers' DCs," Alexander says. "Communicating that value, and putting it in a retail perspective that makes sense and is acceptable, so we can build mutually beneficial alliances with our customers—that is my biggest challenge."

The Big Questions

What are you reading?

Fear and Loathing in America: the Brutal Odyssey of an Outlaw Journalist 1968-1976 by Hunter S. Thompson

Business motto?

Prepare for the worst and hope for the best.

Advice to people starting out in logistics?

Find a good company and stick with it. Listen to what's going on around you—if you listen, you'll understand what the problems are and you'll be better prepared to fix them.

First web site you check each morning?

Google News

Technology you couldn't live without?

Microsoft Excel

What's in your briefcase?

My laptop, various reports, business cards, my Palm, legal pads, a flashlight, and a tape measure.

What do you do when you're not at work?

I spend a lot of time with my wife and my puppy, a miniature pinscher. I also enjoy mountain biking, golf, and travel.

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