FedEx SupplyChainCustomer Success Story

Global Tests and Supplies Developer and Manufacturer This customer is a global leader in the development, manufacture and

marketing of rapid, accurate and cost-effective tests used primarily to

diagnose human diseases.

Getting Ahead of Business GrowthWith a primary distribution operation located on the West Coast and a

demand center on the East Coast, this company was experiencing

rising transportation costs and extended transit times to get

consumable products to their fi nal destinations. Combine this situation

with rapid company growth and quickly this issue became a signifi cant

risk with the potential to inhibit future growth. This company’s

inventory also included temperature-sensitive products with specifi c

handling and storage requirements, so no ordinary “off the shelf”

solution would work.

There was also an opportunity to improve their service parts division.

Because the customer also manufactures critical test equipment, they

were looking for a service parts solution that could provide more timely

and accurate access to information that could ultimately help them

improve customer service and effectively manage service costs.

No Ordinary SolutionFedEx SupplyChain worked extensively with the customer to

understand their current business and future strategies. After extensive

fi nancial analysis, FedEx SupplyChain proposed moving distribution of

the company’s compounds and consumables to the FedEx ISO 13485-

certifi ed Global Distribution Center (GDC) in Memphis, Tenn. Since the

customer’s primary demand center was on the East Coast, centralizing

distribution operations could improve the average transit time from 3.5

to 2.4 days, lower costs and boost fl exibility.

To address the needs of the service parts division, a solution including

FedEx® Critical Inventory Logistics was proposed. This solution could

address the global requirements of the service parts division through

full integration with the company’s existing ERP system. FedEx Critical

Inventory Logistics provided location, route and transportation

optimization, smart cost calculations and time-defi nite delivery

alternatives for their most critical service parts.

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Positioned for Continued SuccessCentralized distribution at the FedEx SupplyChain GDC has translated

into $1.4 million a year in transportation savings, greatly improved

service levels and reduced average transit times from 3.5 to 2.4 days.

Centralizing operations to a multi-client facility supports future growth

by moving from a fi xed to variable cost structure, which frees up

capital. FedEx SupplyChain also meets or exceeds the customer’s Good

Manufacturing Processes (GMP) standards for their temperature-

sensitive products through temperature and environmental controls,

monitoring, data capture and retrieval capabilities.

The service parts division now has full visibility of service parts

inventory via the FedEx Critical Inventory Logistics Web portal to

optimize parts deployment and planning and automate previously labor-

intensive activities. Now, with FedEx Critical Inventory Logistics, the

customer has real time access to data and reports that help manage

inventory, control costs and improve customer service levels.

Customer Opportunities

• Manage rising transportation costs and extended transit times.

• Support rapid growth.

• Maintain temperature-sensitive products with specific handling and storage requirements.

• Gain access to timely and accurate information to support service parts division.

FedEx Solution

• Distribute compounds and consumables from the FedEx SupplyChain Memphis Global Distribution Center.

• Custom-build a solution to accommodate specific needs of temperature-sensitive products.

• Integration with customer’s ERP system

• Utilize FedEx Critical Inventory Logistics to optimize service parts division.

Value Derived

• Estimated $1.4 million a year in transportation savings.

• Greatly improved service levels and reduced average transit times from 3.5 to 2.4 days.

• Made capital available to support future growth by moving from a fixed to variable cost structure.

• Compliance with customer’s Good Manufacturing Processes standards for temperature-sensitive products.

• Real-time access to data and reports that help manage inventory, control costs and improve customer service levels.