A - The domestic organization is centralized. It is made up of four principle groups-transportation, field operations, estimating and planning, and distribution systems group. Field operations are comprised of outlying, regional distribution centers and the central distribution center, which takes the finished product direct from manufacturing.
Our company was founded in 1892. We've been around for a long time; we've actually kept some of the old covered wagons. We started as a piano and household furniture mover. Today we operate five companies, all located in the same city. We own two public warehousing operations, a commercial moving company, and two trucking companies, a union short-haul carrier, and a long-haul common carrier. Everything we do is involved with distribution. We don't sell; all we sell is the distribution service. Our eventual goal is to win people over to a distribution point of view-to handle their freight from the time it is manufactured to the time it is in the consumers' hands. This means that if you made a product anywhere in the United States, I could send a truck to your plant, pick the material up, bring it to my warehouse, unload it, place it in storage, hold it until I hear from you, and when I hear from you I can then assemble your order and ship that portion of your stock to the customer. From the public ware houser's point of view, we feel that's as close to total service as we can get.
Starting from the top we have the director of materials control, who oversees all materials distribution and shipment, all materials planning personnel, and all production planning personnel. Reporting to the director of materials control is the manager of warehousing and distribution services, to whom two superintendents report, including myself. A number of foremen, managers, and operations people report to me. Our organizational plans focus on a segment of international geography and then by function, be it warehousing, product handling, transportation, customer service, product planning, and so on. For example, in the Latin American region, there are basically ten locations in which we have marketing companies. Each of those companies has a distribution organization that consists of all the traditional functions.
Generalizing warehousing and the place it occupies on the organizational chart is very difficult. Warehousing might be found under a distribution group, as a separate entity in itself, or as part of a customer distribution and service group. What system works best for one company may not work for another.
Describe some of your responsibilities.
I have the responsibility for ensuring that space is available where and when we want it, so that we can get our products to the customer. Simply speaking, I provide a place to put the product between when it is made and when the customer needs it. There are an awful lot of steps in between.
My responsibilities are to develop directional plans, contingency plans, and operating plans for all the field units on an international scale. Those units report directly up through local management, so my efforts are to coordinate all the distribution activities among the general managers of the various geographic regions.
We prepare operating direction plans that give us a focus on new product programs and the nature of the support required. The operating plans provide a considerable amount of data. Consequently we do a lot of data collection.
My responsibilities here include sales, customer service, and operations. For instance, I do all the labor negotiations with the various unions involved with us, all the office administration, and the data processing. Pricing is also in my area of responsibility. First of all, I determine the prices based on my cost of operating. I've got a mortgage on this building, so I know it costs me X number of cents per square foot to operate. In order for me to arrange for a product, I determine what the cost is in cents per square foot to break even. Then I take a look at the stacking and storing characteristics of the product-is it one that can be stacked on the floor or one that can't be stacked at all? Do I have to use a rack (which would increase the cost)? I determine what the cost is for the product, and I add a fair markup, so that I can make a profit on it.
We all try to get involved in planning. We have a lot of difficulty making a two-year plan, because by nature we're a thirty-day business. No customer in my warehouse is obliged to keep goods in my warehouse more than thirty days. We have some accounts that have been with us for twenty years, but even those accounts can decide to leave this warehouse after thirty days' notice. So it's very difficult for us to make long-range plans. Today I may receive a call from a major shipper who needs 200,000 square feet, and that can really alter my plans. Some people may call us firemen, and I guess it's true. We're putting out fires all the time. Because of these things, our planning is probably no more than a month or two at a time.
Company politics comes up quite often, and it is not just restricted to this field. People like to "empire build." I definitely like the politics the least. It bothers me, and there are actually times I sit back and think, "Oh, I would love to be president of this company for twenty-four hours, because there are a couple of people I would love to fire." Company politics can cost a company a lot of money.
If you want cheap warehousing, you can find somebody with a barn who will let you put your product in it. It is up to me to evaluate the warehouses in an area, the services that are available, and the rates that they will give us in order to decide whether or not these people will represent our company's interest.
