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Network Hubbing Operations

During challenging economic times, one of the world's largest telecommunications companies asked R+L Global Logistics for help in designing and implementing a critical spare parts logistics hubbing program.

Problem

The most valuable technology asset in business and government today is telecommunications. Without it, businesses, government agencies, and service organizations would be unable to function. The use of wireless communications has never been greater, and it has become an essential part of our nation's business management and emergency response system.

In order for the global telecommunications giant to maintain its service standards, its network operations needed fast and reliable access to critical spare parts. The inability to meet this demand would result in lost revenues, and threaten business continuity, security, and emergency response management.

When the customer needed to reduce their capital expenditure on critical spare parts and began looking for a transportation and logistics provider, they outlined a number of essential requirements for the program to be a success:

  • The program would have to provide access to a variety of critical parts needed to make repairs.

  • It would be necessary to maintain approximately 150 of redundant critical spare parts at designated warehouses to supply each of the company's 80 switch sites.

  • Failed parts would have to be replaced the same day and within a two-hour delivery window, usually between the hours of 11:00 p.m. and 1:00 a.m.

  • The solution would have to lower operating and administrative costs, while preventing service interruptions by providing parts to technicians to be exchanged during "off-peak" hours.

Solution

Working in a collaborative effort with the company, R+L Global Logistics crafted a reliable, flexible, and predictable solution that was also cost effective. R+L Global proposed and implemented a plan that entailed the opening and management of 13 "hub" facilities that would be strategically placed across the country, providing ready access to each of the customer’s 80 switch sites within five hours drive time from the nearest hub.

Hubbing Chart

From each of its 13 hubs, R+L Global would be able to react in a timely manner to deliver replacement parts to any of the 80 switch locations that experienced a critical parts failure. A collaborative effort between R+L Global's VP of Sales and IT Director also resulted in the development of a secure website from which R+L Global could provide the company with real-time access to the inventory in any of the 13 parts hubs.

In the event R+L received a critical spare parts "case" shipment to deliver from its hub in San Francisco to the company's switch site in Santa Clara, CA, R+L Global would pull the parts from inventory and deliver them to the switch site within the company's prescribed delivery window (within a 1 to 2 hour period the same day).

As the critical spare parts were being shipped to Santa Clara, R+L Global would automatically replenish the San Francisco hub with a replacement part from the Central hub in Kansas City. The company would then automatically restock the R+L Kansas City hub with the necessary replacement part. The deployment of this program would greatly reduce the customer's capital expenditure by reducing the number of sites in which they stored critical spare parts from 80 to 13.

Results

Since beginning the critical parts hubbing program, R+L Global has performed approximately 1660 successful critical spares case shipments. There has been only one service failure which arrived 10 minutes late, and they have maintained a 99.993% on-time delivery. They have also maintained inventory at 13 hubs with 0% shrink and no damages. This solution has netted the customer more than $17 million in capital expenditure savings.

This Critical Network Operations Program is another example of how responsive, flexible, and dependable solutions benefit R+L Global Logistics’ customers.

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