U.S. manufacturers may be able to cut costs significantly by moving production offshore, but they tend to forget one crucial thing.
“You still have to distribute the product in the states,” said Jim McNerney, a co-founder and principal at Esync Inc. in Sylvania Township.
If the distribution isn't handled properly, a firm easily can waste everything it has saved by moving production away from its customer base.
That is where Esync - a company that specializes in distribution and transportation logistics - enters the picture.
Begun in 1999 with the idea of helping manufacturers get more out of their supply chain software, Esync has evolved into a multifaceted consultant. It advises firms on setting up distribution networks, teaches them how to use software, and writes computer programs if needed.
“We help companies decide what thing goes where,” Mr. McNerney said.
Firms such as Owens Corning, UPS Packaging, CSX Corp., Lockheed Martin, and Kroger Co. have turned to Esync to set up or improve distribution systems.
Owens Corning used the suburban Toledo business four years ago to evaluate potential vendors for a project, said Barry Burnham, Owens Corning's logistics development team leader.
“They helped us target the ones that were better matched to our needs,” he said. OC again used Esync last year to evaluate the effectiveness of a distribution system it had installed.
In 41/2 years, Esync has grown to $7.25 million in annual revenues with 45 employees.
“We're not architects or construction management,” Mr. McNerney said. “But we can figure out how big a distribution warehouse needs to be, how close it needs to be to your vendors and transportation hubs, and how many you need. If you already have five distribution centers, we can tell you if you need five or only three, and we can analyze the situation and see which is the best location for those three.”
Originally, the goal was to teach people how to use commercial software that tracks items moving from a warehouse to a factory, for example.
Mr. McNerney and John Sidell, Esync's co-founder and principal, worked together in the late 1980s at a firm in Maumee called Interlink. It sold supply chain software.
“We fielded a lot of calls from people who couldn't make the software work exactly as they needed and they would ask us, `Do you know anyone that could help?'” Mr. Sidell said. That gave birth to Esync.
They eventually quit their jobs, developed a business plan, and began their new business.
Success has occurred rapidly. In 2001, the pair was named Northwest Ohio Entrepreneurs of the Year.
In August, Esync was named a Top 100 supply chain firm by Global Logistics and Supply Chain Strategies, an industry magazine.
“Right out of the box, everything worked for us,” Mr. Sidell said.
The owners now want to focus on clients within a 300-mile radius in part because of new technology called radio frequency identification, which uses computer chips instead of bar codes to track shipped items.
Wal-Mart, the nation's leading retailer, recently told its top 100 suppliers they must change over to that technology or risk losing business.
Many of the suppliers are within 300 miles of Toledo and will need help adapting, Mr. Sidell said.
“Do you know how many items Wal-Mart receives? Millions,” he added.
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