ATC Logistics & Electronics’ Mike Simpson counts five distinct benefits that have accrued to TomTom through its relationship with his company:
• A significant reduction in freight expenses;
• A tangible profitability improvement attributed to North American supply chain efficiencies;
• An improved flexibility to offer promotional concepts that differentiate TomTom from its competitors;
• An ability to increase outbound shipments of finished product more than tenfold during peak holiday demand periods; and
• A reduced turnaround time for repair and refurbishment, thereby getting products back into the retail market much faster.
TomTom’s Wayne Arena agrees with Simpson’s assessment of what has turned out to be a win-win relationship for both companies. “First, with the cost savings using bulk freight, we have gained in our margins,” Arena says. “We are spending our freight dollars more intelligently. A close second to that benefit is inventory flexibility, since ATCLE is able to warehouse products and packaging materials.”
Arena also notes that sourcing the packaging supplies locally saves even further on transportation expenses and makes TomTom a “greener” company by not wasting fuel. “We’re also bringing work back into the United States,” he adds.
“There are so many aspects to this relationship,” Arena continues. “It’s not just one piece.” His advice to other marketers looking for an outsourcing partner: “Find the best solution for your product. Not everything can be pigeonholed into one model.
“ATCLE has the facility, the square footage, and the knowledge to handle the job as a turnkey packager,” he sums up. “They like to do everything themselves. That’s fine with us. That way, we can stick to our core competencies.”