Workforce outsource
BMW chose to partner with a third party logistics provider (3PL) to manage the labor in its Sequence Center, the warehouse adjacent to its Spartanburg, S.C. manufacturing plant. Jay Tee Tucker, BMW's department manager of logistics, shares why the automaker made this decision for its warehouse operations.
Staff -- Modern Materials Handling, 8/1/2003
MODERN: BMW owns the Sequence Center building and inventory, but hired TNT Logistics to 
manage the labor within the facility. TNT also provides transportation services to you. What prompted BMW to seek a partner for these tasks and how does that fit into your automotive production strategy?
JTT: We have a great need for flexibility in our operations. Our cars are very option-oriented based on our customer requirements. That means we have to do things a little bit differently from other automakers and be flexible to meet those option demands. We examined our core competencies and decided it was best to have a 3PL handle our logistics, which includes labor in the warehouse.
MODERN: You selected TNT Logistics. What did they offer to BMW?
JTT: We went with TNT Logistics because we had experience with them. TNT has been a transportation partner with us since the inception of the manufacturing plant back in 1994.
MODERN: What functions do they perform for you?
JTT: They handle our total transportation, including deliveries from our suppliers to our warehouse and to the manufacturing facility. They also bring materials from our off-site warehouse which holds larger parts not stored in the on-site warehouse. Then once items arrive, they bring the parts to the line in the manufacturing facility and manage all of the labor within the warehouse.
MODERN: What are the benefits of such an arrangement from BMW's perspective?
JTT: It allows us to focus on what we do best. We deal only with their management and not the individual warehouse workers. TNT is under contract to us and works to meet the deliverables of our agreement.
MODERN: Do you face the same challenges with staff turnover that other facilities face and how does that affect your operations?
JTT: Constantly within this market we have the challenge of retaining good people. For us though, that is TNT's job. They have their own human resources department, management and supervisors onsite here to deal with the entire labor operations.
MODERN: Do you ask them to find certain types of workers?
JTT: We want them to hire people who think about what they are doing. We want them to have their heads involved in their jobs, not just their hands and feet driving a forklift.
MODERN: Who is responsible for training, and is that a challenge considering the high degree of automation you have in this facility?
JTT: TNT does all of the training. BMW identifies the functional description of the work process and how all of the jobs fit into that. Then we work with TNT on the actual employee training.
MODERN: Has the arrangement with TNT met your goals?
JTT: Yes, there was a bit of a learning curve for all of us when we started up the warehouse. We had new processes that required specialized training. We had to rely on their expertise to get through it. What we have done is working well. We view it as a partnership with TNT. We have attained our targets.
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