How Do I.... Ship 600 Tubas
It's not so hard getting a tuba from Maryland to California. It's a little harder shipping five tubas to Texas, one flute to Florida and three sets of bass drums to Kansas. And don't forget the box of guitar picks.
But when you have 96 stores selling instruments, sheet music and more, 16 warehouses, 400 mom-and-pop retail affiliates and a primary chunk of your business is renting goods to schools across the country -- even Patrick Wiegand needs help.
He's the senior distribution manager for Music & Arts www.musicarts.com of Frederick, Md.
Although the firm uses UPS shipping services "to replenish goods that might be sold during a normal business day" to its network of stores, says Wiegand, "a unique part of our business is that we rent out a couple of hundred thousand instruments every year, all across the country. When someone in Littleton, Colo., wants a trumpet, we want to make sure we can get them a trumpet."
A unique challenge for the firm is that at least 60 percent of the instruments it ships are returned and usually all at the same time -- when school wraps for the year. And then the returns must get sent to special centers to get refurbished and then ship out again.
"We're a nice size company," Wiegand acknowledged -- he has 107 employees in the distribution unit alone -- "but we don't have the ability to hire an entire traffic company that routes freight and deals with claims and billing."
When Music & Arts was an up-and-coming company about eight years ago it hired TBB Global Logistics, of New Freedom, Pa., to help sort out its shipping cacophony. Music & Arts has since been bought by Guitar Center, which in turn is owned by Bain Capital Partners.
TBB is run by brothers Sam and Phil Polakoff, the third generation to run the family-owned firm. It was set up to help small and medium-sized businesses ship products domestically or globally. Most of its customers spend up to $300,000 a year on freight, but some much more and some much less.
"It's a tough economy now and a large business may see layoffs but instead of having 100 people in their supply chain division it may just have 70 while a small business probably has no one" to help it navigate how to ship goods efficiently, said Sam Polakoff, adding that a small firm likely doesn't have the money to dedicate to innovations in its supply chain.
TBB has morphed from its incarnation as the Transportation Bureau of Baltimore in 1946, when its founder helped clients navigate new, complicated trucking regulations to something of a technology company.
"We talk to small firms about how to do things electronically -- and we don't count using Excel and e-mail as going electronic," said Polakoff. "We want them to start issuing purchase orders, routing orders and more electronically."
Wiegand says TBB is able to negotiate the best shipping rates for Music & Arts because of its long-standing and broad relationships with many trucking companies. It also acts as a go-between. Like the time Music & Arts had a big truckload of instruments waiting to dock at a warehouse. "The trucking company tried to renegotiate our fee in the process of delivering and for us that's a big thing," says Wiegand. TBB put the kibosh on that.
Both TBB and UPS helped Music & Arts last year when Hurricane Ike pummeled Houston. "They tell us about the weather and help us anticipate some of it because once a hurricane hits, freight stops moving," said Wiegand. TBB helped Wiegand track his freight so it could get moving again, which he says was a big help especially since Ike cut the power and communications to many areas in Texas.
"Our product is expensive and needs a certain kind of care," he said.
Polakoff's firm is banking on new technologies to enable small firms to stay competitive with Fortune 500s: "They'll be able to get assistance finding vendors around the world, evaluating them, putting together purchase orders to client specifications, issuing purchase orders electronically.and be able to keep inventory in different parts of the world. We want to offer what large companies get, but scale it down in an affordable manner."
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