May 2003 | Case Studies | Casebook

Fujifilm: A Matter of Perspective

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Seeking a carrier to serve its LTL customers in the west, Fujifilm sought a partner that could see the larger supply chain picture.

"A picture is worth ten thousand words," says Confucius, and it's easy to comprehend why. A picture fills in details that words leave to the imagination, therefore communicating a more accurate and credible depiction of a moment in time.

Fuji Photo Film ought to know. In the nearly 70 years since its humble beginnings in a small Japanese village shadowed by its namesake, the Elmsford, N.Y., manufacturer has helped amateur and professional photographers alike create and develop their own indelible memories with a product line that includes cameras and film, digital printers and scanners, paper and lab products, and minilab systems.

So when the company decided to switch its west regional LTL carrier two years ago, it naturally sought a partner that could prove its worth beyond just sales rhetoric, by seeing the larger supply chain picture.

Seeing the Forest for the Trees

In July 2001, Fujifilm turned to Atlanta, Ga.-based Saia Motor Freight to serve its LTL customers in the west, extending an existing relationship between the two companies in the Southeast corridor. Aside from pursuing more competitive pricing, Fujifilm was also looking for a carrier that was willing to work collaboratively to meet the changing needs of its customers. Given the perilous balance of the economy at the time, it was an ambitious, if not understated, objective.

"We had a pretty good relationship with a competitive carrier out west for about 14 years," says Peter Schmidt, vice president of materials management and logistics, Fujifilm. "That carrier was on more preferred lists for large retailers than Saia, but we felt that operational efficiencies and our prior relationship in the Southeast would override any problems we might face dealing with preferred carrier lists."

The transition similarly afforded Fujifilm an opportunity to step outside its own business and look at new ways it could streamline its operations and better serve customers. One difficulty facing shippers today is a lack of objectivity in terms of how efficiently they're operating.

"You can't see the forest for the trees," offers Schmidt. Partnering with Saia removed some blinders because "it had its own perspective. Saia saw and interacted with multiple shippers and therefore could bring many best practices to the table," he adds.

Customer Relativity

"In the consumer products goods arena, vendor compliance is challenging at best," observes Schmidt. On the one side, shippers have to work with customers to define their expectations, then strategize with carriers on how to best meet these demands.

"Everyone is trying to reduce inventory and commit to extremely aggressive flow-through processes," he adds. "It's either a 'must arrive on, must arrive by, or must arrive between situation.' Any iteration of these time parameters must coincide with whatever a customer has queued up in its advanced planning system as far as the amount of lead time that it will allow."

Saia witnessed similar challenges in meeting the expectations of both shippers and their customers.

"It's no longer 'this product needs to be delivered in one day,' but rather 'this product needs to be delivered between 10 a.m. and noon,'" says Tony Albanese, Saia's vice president of operations and sales. "Beyond that, customers want it exception free, and they want the information carriers provide via EDI to be accurate. The bar has been raised; it has been raised higher than it has ever been from a service standpoint."

Collaboration Equation: 1+1=1

"Everybody is trying to squeeze the most quality for the lowest price, and they're not apt to accept initial pricing for any type of distribution or logistics strategy," adds Schmidt. "That's why it's important for carriers to partner with shippers, to bring their engineering groups in and find out how they can do things more efficiently and maximize the use of space and equipment."

That is precisely what the two companies have done.

"At our last meeting with Fujifilm we brought in an industrial engineer who worked with its distribution center managers to outline opportunities where we could improve shipment flow and put us in a better position to deliver to the customer efficiently and on time," says Albanese.

Fujifilm has been equally proactive in these one-on-one meetings, working with Saia to streamline operations and create more efficiencies.

"We're targeting how we can cut out costs in certain legs of the transportation cycle," says Schmidt. "The pickup point becomes a natural opportunity when you're dealing with the west region in terms of its reach. So we're selectively picking, queuing, and staging orders to make direct runs to the Pacific Northwest, for example, then coming back east so we can bypass Los Angeles.

"Our managed delivery date environment has been very successful," adds Schmidt. "We've seen significant increases in on-time delivery with the number of customer scorecards that we're managing."

As a result of these initiatives, Fujifilm anticipates a reduction in costs of eight to 13 percent.

Leveraging Technology

Aside from leveraging Saia's operational expertise, equipment, and service network, Fujifilm is also taking advantage of the carrier's IT resources.

"We're growing, but we still have a small company mentality in some environments," says Schmidt. "Right now we don't do as much electronic bill tendering, so Saia has bellied up resources and contributed its technology to help us queue up loads at terminals as quickly as possible."

For its part, Saia has been more than helpful in accommodating Fujifilm's technology needs, developing a customized report system that meets the expectations outlined by the consignee.

"We have created and developed a series of management reports that allow us to measure shipments through the entire supply chain to time of delivery," says Albanese. "With these reports we measure the shipment every step of the way to proactively identify issues that we can resolve before they become problems."

Moving forward, Saia is implementing a wireless technology application in its system that will provide real-time information throughout the supply chain. "It's an 18-to-24 month project and some of the areas that we will make a priority are Fujifilm's distribution center facilities," says Albanese.

Model IT

Leveraging Saia's technology has allowed Fujifilm to plant the seeds for future development of its own IT capabilities. It has also set a standard of expectations against which Fujifilm will likely measure prospective carriers.

"As long as we're a prepaid carrier we are going to expect, under our contract arrangements, that preferred carriers will have some minimal requirements of understanding how to deliver in this managed delivery environment," says Schmidt.

This level of flexibility among carriers will similarly drive greater innovation and collaboration among carriers, shippers, and consignees. For Saia and Fujifilm, it's merely the tip of the iceberg as they continue to drive efficiencies within their respective operations.

"Our goal from the outset has been not just to maintain the level of service, but to see what other value we can bring from a service perspective," observes Albanese.

For Fujifilm that's a value that doesn't translate easily to words—not even ten thousand of them.

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