In 1989, the cell phone was an emerging technology with a limited market. Robert J. Laikin and three partners, all in their 20s, saw a future. Together, they founded Brightpoint, a global distributor and third-party logistics (3PL) provider of wireless devices and accessories located in Plainfield, Ind.

Back then, buying in bulk meant acquiring 1,000 units at a time to resell in Indiana, Ohio and Kentucky. "We had eight or 10 people working out of a small space in an industrial park," Laikin remembers. "The banks in town didn't know what to make of us, but we knew there was a great business to be built in wireless distribution."

Seventeen years later, Brightpoint has transformed itself from a regional reseller of cell phones to an international customized logistics company handling wireless devices for wireless manufacturers, retailers and service providers in 14 countries. In 2005, Brightpoint shipped 42 million wireless devices globally and had annual revenues topping $2 billion.

Twenty-four million of those devices were handled in Brightpoint North America with the majority in the company's 400,000-square-foot distribution center in Plainfield. The facility was designed from the ground up for high throughput, quick turnaround and mass customization. While cell phones are mass-produced by manufacturers, each of the 24 million units handled represents a unique serial number that is custom assigned to an individual customer.

In addition to direct-to-consumer and retail distribution, Brightpoint's facility also handles returns, repairs and value-added services in a virtual zero-defect environment.

To coordinate those activities, Brightpoint relies on a robust warehouse management system (Provia). The WMS is tightly integrated with the facility's transportation planning system and the automated materials handling systems.

The WMS not only directs the flow of activities on the floor, it also captures the unique serial number of every product shipped from the facility or received for repair. In addition, the overall system is designed to capture information in real time throughout the order fulfillment process.

"We know what happens to every phone or device that we ship, when we ship it and who we ship it to," says Phil Sheingold, Brightpoint's senior vice president of operations. "We're able to share this information in real time with our customers."

In addition to the WMS, the facility relies on very narrow aisle racking and wire-guided lift trucks to maximize storage space. A conveyor and sortation system automatically handles cartons.

There was a reason Brightpoint became interested in logistics. In the competitive world of electronics distribution, the margins in logistics were better than those in reselling and distribution.

"We're still a large distribution company," says Laikin, "but when we're handling someone else's product, we're providing customized services that include warehousing, software loading, custom packaging, managing credit and payment, reverse logistics and mass fulfillment. As volumes increase in this area, the operating leverage we can gain in logistics is even higher than in our distribution business."

Laikin says Brightpoint's transformation from reseller to logistics provider coincided with an expansion of the number of companies licensed by the federal government to provide wireless services in the mid-'90s. "There are some big players in the industry today who were brand new to the market then," says Laikin. "They didn't have stores or a way to distribute to consumers."

One of those new entrants was MCI Wireless. "We went to them and asked: If we build logistics capabilities, would you outsource your wireless business?" Laikin recalls. "We didn't really have the capabilities, but they told us that if we built the facility, they'd consider giving us the business."

Like a scene from "Field 0f Dreams," Laikin decided that if Brightpoint built it, the business would come. Built in 1995, that original facility was designed to last 10 years. Within a few years, however, Brightpoint needed three satellite facilities. At that point, Laikin challenged his operations people to design a best-in-class facility that would enable Brightpoint to be the most efficient logistics player with a specialty in the wireless area.

"My directive to Phil Sheingold and the guys who designed the facility was to be the Dell computer of the wireless logistics industry," says Laikin.

The result was the 500,000-square-foot office and distribution facility with 400,000 square feet of storage and processing space.

The first step toward building a best-in-class facility was to lay out and design materials handling and information handling systems that optimize the flow of inventory through the facility. "Our business has evolved from a pick, pack and ship operation to a customized solution," says Sheingold. "To do that, we needed a flexible and technically savvy delivery system that could do the customization required by customers, get it out the door quickly and at a reasonable cost."

While the facility employs automated materials handling equipment, like conveyors and sortation, flexibility and timely fulfillment are made possible by the tight integration between Brightpoint's transportation management system, warehouse management system and the warehouse control system that manages the automated equipment. Real-time automated data collection keeps the system up to date.

Because bar code labels are scanned at every step, Sheingold's team can look into the system to verify that an order has gone through every station before it is shipped.

Once the facility and systems were in place, the next step was to maximize the usage of those systems. "What we realized is that a profitable business logistics model is a function of how well you utilize your facility," says Laikin. "One of our competitive advantages is that as we get more capacity and find more efficiencies, we are able to pass the savings on to our customers."

A final step was to build even more flexibility into the system so Brightpoint can wait until the last possible moment to configure the product for the customer.

As an example, Brightpoint has convinced many manufacturers to employ a postponement strategy, shipping a product in a mostly completed state. "In the old days, manufacturers would ship us 500 phones in ready-to-ship packaging," says Laikin. "We've convinced some of them to stop the production line at 85% completion and ship us the phones in egg cartons." Brightpoint then waits for an order to program the phones and package them for the consumer. "We're now considered as the last mile of the wireless distribution channel," says Laikin.

The benefits: "We have a real partnership with our customers," says Laikin. "We have the leverage and we're helping our customers manage their business with less inventory. They're happy and we're happy."