Kitting, logistics help TomTom navigate challenging seas

Kitting and streamlined logistics services are helping TomTom USA, a Concord, MA, marketer of vehicle GPS navigation units, to chart a new course toward supply chain efficiency while also saving the company more than half over previous transportation costs.

CLOSING OPERATION. Station workers at ATC Logistics & Electronics seal clamshells protecting the GPS cartons.
CLOSING OPERATION. Station workers at ATC Logistics & Electronics seal clamshells protecting the GPS cartons.

Like many electronics marketers, TomTom’s navigation devices, as well as some accessories, are manufactured in China. Kit assembly on TomTom products also is performed in China. But being a mapping specialist didn’t help the company get its products from China to North American markets faster, especially during the fourth quarter of the year, when 55% of the electronic devices typically are sold. Complicating matters were product returns, necessitating shipping the units back to a Chinese original equipment manufacturer (OEM) for repair and refurbishment, and then returning them to the U.S. Furthermore, the time requirements for shipping products over great distances made last-minute software upgrades to the GPS devices nearly impossible.

As a first step toward lowering transportation expenses, TomTom hired ATC Logistics & Electronics (ATCLE, www.atcle.com), Fort Worth, TX, to handle its outbound shipping of packaged products. But the relationship quickly evolved into much more, requiring ATCLE to become TomTom’s North American “all-in-one” source for handling everything except manufacturing the units. The expanse of services that ATCLE provides has allowed TomTom to focus instead on its core competencies of creating, improving, and marketing GPS devices.

TomTom markets vehicle navigation systems that provide digital mapping and routing. Founded in Europe in 1991, the company has offices in Concord, MA, the Middle East, Africa, and Asia Pacific, employing more than 3,300 people. The company has realized phenomenal growth. Its market share for navigation devices in Europe has reached about 50%; in North America, the share is 25%. The 2008 acquisition of Tele Atlas adds detailed street-level and interconnecting road networks for 80 countries.

Distribution channels

TomTom’s products include Portable Navigation Devices (PNDs), fitted in-dash navigation solutions, and software for use on PDAs and smartphones. Through the Tele Atlas unit, the company also supplies digital maps that enable routing guidance. TomTom has a worldwide installation base of 20 million GPS units, and its navigation products are sold in more than 30 countries (in 20 languages), primarily through retailers, who buy from distributors. Some products and services also are sold online.

ATCLE, founded in 1994, specializes in third-party logistics (3PL) and supply chain services. The company, a division of ATC Technology Corp., Downers Grove, IL, performs both forward and reverse logistics services, product tracking throughout the entire supply chain, same-day fulfillment, kitting and packaging, and test and repair of high-tech devices. ATCLE handles 53 million serialized products annually, including 10 million that are kitted and packaged. In addition, five million products are tested and repaired each year. The company’s Fort Worth facility encompasses more than 1 million sq ft and employs 2,500 full-time workers, plus seasonal employees, when necessary. ATCLE’s fully integrated IT platform is provided by Red Prairie’s warehouse management systems and Oracle’s enterprise software.

Moving kitting on-shore

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