Proven Results

Not every top manager can brag that her firm, a third-party logistics provider that manages 250,000 shipments through 3,500 carriers with annual freight spending at $80 million, saw a 45 percent increase in revenue in 2007.
Especially well before her 40th birthday.
Wendy Buxton, president of LynnCo Supply Chain Solutions at 2448 E. 81st St., Ste. 2600, since 2005, has not only increased annual revenue more than 30 percent each year since she signed on with the company in 2001, but she has also managed to lose not a single customer.
Not too shabby when, according to industry statistics compiled by Armstrong & Associates Inc., average growth of companies the size of LynnCo is 12 percent and the average customer tenure in the transportation and logistics industry is 2-3 years.
Buxton’s background in information technology and proven track record for growing companies, gained in senior management positions in IT with Commercial Financial Services and TV Guide, transferred nicely to her current gig heading up a growing logistics provider proud of its technological edge – an edge that a team headed by Buxton designed.
The LynnCo office is the physical manifestation of a growing bottom line. The firm just rented the entire 26th floor of the CitiPlex Towers and has right of first refusal on another floor in the building. Buxton expects that by the end of the year the company will need to expand into its new spaces.
“We intend to grow as a company doing what we do best,” she said. “I think we have a great foundation to build upon.”
LynnCo services include customized, global transportation management, technology services, financial services, freight brokering, warehouse operations, integrated logistics and a Lean Logistics program. The firm employs 35.

Incubator for Success
Buxton, an Oklahoma State University graduate with a B.S. in management information systems, is a natural leader who learns quickly, said Lynn C. Fritz, LynnCo founder and chairman and an icon in the transportation and logistics industry.
“She applied the lessons in one discipline onto another,” he said. “She has evolved.”
“We have a great management team here. We’re a young company, and we are fortunate in that the owner of our company is willing to invest in allowing people like myself and the other members of our team to mature their career as the company grows,” Buxton said.
Logistics costs businesses about $1.5 trillion in North America, where 3PLs stand to reap $132 million in revenue. The global market is much larger, where the 3PL market is $417 billion, according to Armstrong & Associates Inc. In 2007, small- to mid-size companies spent nearly 10 cents of every sales dollar on logistics- related costs with transportation accounting for over 40 percent.
When it’s time to whittle that spending, a call to LynnCo could be well worth the time. LynnCo clients, mostly small- to mid-size manufacturing companies, typically see 25 percent savings from increased shipping efficiency and 30 percent savings in inventory carrying costs, Buxton said.

Technology: The Driving Factor
LynnCo’s leading technology suite, SuiteEdge, allows clients to see the location of their raw materials and finished goods in real-time and connects suppliers, carriers and customers through a Web-based portal.
“Our industry really lacked a good technology solution,” Buxton said. “We were very immature, from a technology standpoint. Only the big companies can afford to go out and buy the really good solutions because they cost millions of dollars – lots of capital investment.”
Fritz wanted to provide businesses a solution that would allow them a competitive advantage over their larger competitors without having to invest capital in software and hardware installation and maintenance or in-house IT staff and support.
“That’s what I was tasked to do when I came in,” Buxton said.
“We really use the technology to drive the business solution,” she said. “It’s more than just what we want the system to do. It’s a lot about understanding what the business needs of our clients are.”
Buxton and the LynnCo IT team spent a lot of time with clients, learning their businesses and what specific problems they face. Since many clients seemed to confront a shared set of roadblocks, Buxton and her team designed a solution that would specialize in solving those issues.
The typical LynnCo client is a manufacturing company, most of which have problems with out-of-control expediting “because they don’t know where things are in their pipeline,” Buxton said. They roll freight expenses into the purchasing price of a product “so they really don’t know what they’re spending,” especially when their suppliers make the shipping decisions.
“Really, we just help our customer take back control,” Buxton said.
The goal of technology at LynnCo is to provide customers real-time visibility of all inventory in the logistics pipeline. The firm looks to allows its customers to see not only that a shipment is in transit, but also exactly what is on the truck, down to the part level. Also, the suite provides clients the resources to focus on logistics strategy and the continuous improvement of processes, Buxton said.
Because of its technological edge, LynnCo “has been able to compete as a small company up against some of the biggest, well-known logistics providers in the industry,” she said.
Because LynnCo is small, the firm is in a better position to offer large-company solutions to clients, like pricing that allows them to compete with demands of offshore sourcing and manufacturing and large competitors with more investment capital, Buxton said.
“Many larger companies have a cookie-cutter approach. That we are very strategic in nature and focus on continuous improvement is a big differentiator. It makes our customers feel like they are our most important client,” Buxton said.
LynnCo’s tech tools allow for an unbiased, comprehensive view of a client’s application of logistics practices at a cost significantly less than what a client can perform internally, Buxton said. This allows clients to get back to what they do best rather than wasting time and labor on tasks not within the range of their core competency.

Customer Service
Buxton owes the lengthy tenure of her clients – exceeding eight years, in many cases – to the quality of customer service at LynnCo, she said.
“A lot of people ask, ‘What makes you different than your competitor?’ Everybody says, ‘The quality of our customer service.’ But, how do you quantify that? And, since everybody says it, how do you get people to believe it?”
The answer: average customer tenure, Buxton said.
“Our customers are not only renewing a second time, but a lot of times a third or fourth time,” she said. “It’s because they don’t have to come to the table and say, ‘What have you done for me lately?’”
“Most logistics companies’ business model is to say, ‘OK, I’m going to have an attrition rate with my clients. My business model is going to be to invest in sales up front to keep clients coming in.’”
“Our business model is just the opposite. We spend less on sales, and we spend a lot on keeping our clients.”
LynnCo offers a five-point packaged solution that allows customers to leverage the resources of the firm as their own, Buxton said.
“It’s more than just negotiating rates and putting some pricing in place. It’s more than auditing a freight bill and capturing some savings related to misbillings. We’re really about making sure our customers understand their supply chain and identifying opportunities to improve.”
LynnCo believes in continuous interaction with clients rather than a point-of-sale-only system.
“We may put a solution in place today that saves them 30 percent,” Buxton said. “But, their transportation network and supply chain will look different, sometimes, in a week. You can’t put a solution in place and not revisit it continuously.”
Each customer benefits from a team of LynnCo employees whose expertise lies in areas ranging from auditing freight bills and dispatching to coordinating shipments and customer service.
These program administrators are “high-level logisticians who have been in the industry for a long time. They know how to spot these trends, and they’re good at mining opportunities. Their goal is to look at the big picture,” Buxton said.
Transaction-based fees, fixed price, cost plus or gain sharing are just a few among the many ways logisticians get paid. According to Armstrong & Associates Inc., 65 percent of 3PLs are paid in part according to a transaction-based fee, with just 19 percent compensated in part according to gain sharing.
“We are incented to save, and we use that gain share model as a part of how we are compensated,” Buxton said.
“We are offering our customers systems that are worth millions of dollars without the million-dollar price tag. We’re offering our customers expert resources, a call center – things they’re not having to staff.”
“Even if we don’t save them $1 on their freight spending, we are saving them money on their productivity, inventory cost reductions, and their internal administrative functions. They realize that; it’s very evident to them. They’re willing to help with some type of a management fee.”

Go Lean
Small- to mid-sized manufacturing companies are not immune to a marginal economy. When times get tough, the phones light up at LynnCo.
“When the economy is good, times are more difficult for us,” Buxton said.
“Transportation and logistics and supply chain, they are not our customers’ core competencies. They are really focused on manufacturing the product they make, and all the back-office administrative work is not on the forefront of their minds.
“But, when the economy becomes a little tighter, then more and more people start outsourcing overseas, and it’s amazing the number of people looking for cost-saving solutions in every area of the company.
“In those companies, they’re not equipped with the knowledge – definitely not the tools or the resources – to do what we do,” she said.
LynnCo aims to apply lean principals beyond the four walls of the manufacturing plant as well as into the supply chain, both upstream and downstream of the manufacturing plant. Buxton calls this “extending lean beyond the dock doors.”
“If you don’t lean same concepts and apply them to how product is getting into your plant, or how your finished good is getting out, what good does it do to be efficient at manufacturing your product?” she said.
Cost-savings rendered by the lean logistics team at LynnCo are more than enough to catch the eyes of top management.
“If you’re looking at a 30 percent reduction in inventory, if we’re operating in a lean-oriented environment, that plus a 25-percent savings in freight expense – that can be a huge number. It will get a president’s attention, even if shipping and supply chain logistics is not the company’s core competency.”
The core service offering at LynnCo is its proprietary logistics management service including lean logistics, making up 58.5 percent of revenue. Brokerage services make up an additional 31.7 percent of revenue, with invoice processing at 8.7 percent and other services making up the rest.
Within the past year, nearly every new customer to LynnCo is on the lean path, Buxton said.
Account managers on lean accounts at LynnCo are certifying in lean implementation through Industrial Solutions, a certifier and trainer of lean implementers, based in Tulsa. ?

Was this article helpful?

Related Articles

Leave A Comment?