Pilot Pen's Supply Chain Supports New Business
Pilot Pen is a leading manufacturer of writing instruments that has relied on sales generating south of the border for nearly a decade. Popular products, driven by "back to school" seasonal peaks, include gel ink pens, retractable ball point pens, roller ball pens and permanent markers.
Pilot Pen Mexico, a business unit of Connecticut-based Pilot Corporation of America, distributes these items to big box retailers and brick and mortar stores, generating a few million dollars in annual revenue.
"When Pilot went into Mexico, we guaranteed our service. We always do," says Juan Estrella, director of supply chain for Pilot Corporation of America. "Our culture is; we're going to get the merchandise there, wherever the customer wants it."
The Challenge
Headquartered in Guadalajara, Pilot Pen relies on a 3PL to distribute its Florida-made goods throughout Mexico, without dedicating major corporate assets. Serving some of the most demanding retailers, Pilot Pen simply can't afford supply chain disruptions. But that's exactly what it had when its third-party logistics provider (3PL) filed for chapter 11. It needed a new outsourcing partner - fast.
"We didn't want to diminish customer service with interruption in service," Estrella says. "That's always the scary part: How long are you going to be down?"
The Solution
Pilot Pen wasn't down long at all. Shortly thereafter, Ryder System Inc. took over the lease on an inventory-handling facility in Guadalajara and signed new contracts with most of the former customers who moved merchandise through the facility, including Pilot Pen.
"Our relationship with Ryder actually began three years earlier, and when Ryder bought the warehouse, they wanted to expand our partnership," Estrella recalls.
In making the transition, Pilot Pen protected the short-term stability of its operations and the long-term visibility in its distribution cost structure in Mexico, Estrella says.
Ryder helped to maintain smooth shipping to key markets and melded its management information system and Pilot Pen's with minimal disruption.
"It was pretty much seamless," Estrella says.
Signing Retailers and Exceeding Expectations
One of Pilot Pen's biggest customers in Mexico, Office Depot, is a demanding retailer that insists on timely order execution.
"Office Depot doesn't accept back orders," Estrella explains. "With Ryder's help, we exceed that expectation with 100 percent fulfillment and 100 percent inventory control. We're also able to meet a very tight shipment delivery window."
In addition to ensuring timely deliveries and inventory storage and management for Pilot Pen, Ryder helps to manage order processing and customer service functions. It also handles motor carrier selection and billing, shipment tracking, and services related to importation of U.S.-made Pilot Pen goods in Mexico.
"We have our own broker," Estrella says, "but Ryder does the follow-up" such as ensuring that extra import documents are provided and that import duties are paid promptly so Pilot Pen products can quickly pass through customs.
Putting Ink to Paper and Signing New Business
Pilot Pen recently captured the business of another U.S.-based retailer in Mexico: department store operator Wal-Mart. It became an official Wal-Mart authorized vendor in early 2007.
"We've been approaching them for a couple of years," Estrella says. "Wal-Mart is currently going through a rationalization of product lines and we're hopeful they'll begin carrying Pilot product again in 2009."
In addition to signing new customers, holding down distribution costs in Mexico is critical to accelerating its growth, so Pilot Pen will continue to work closely with Ryder to develop more efficient ways to do business. One potential money-saving idea under consideration would let Ryder handle Pilot Pen order-taking in Mexico, replacing a current two-step process in which Pilot Pen takes orders and then forwards them to Ryder for processing.
That step would allow Pilot Pen to further delegate its distribution work in Mexico, freeing the company to devote more internal attention to other operations.
"It truly is a partnership, where Ryder is helping Pilot become more efficient and therefore more viable as a supplier in the tough Mexican economy."
Pilot Pen Mexico, a business unit of Connecticut-based Pilot Corporation of America, distributes these items to big box retailers and brick and mortar stores, generating a few million dollars in annual revenue.
"When Pilot went into Mexico, we guaranteed our service. We always do," says Juan Estrella, director of supply chain for Pilot Corporation of America. "Our culture is; we're going to get the merchandise there, wherever the customer wants it."
The Challenge
Headquartered in Guadalajara, Pilot Pen relies on a 3PL to distribute its Florida-made goods throughout Mexico, without dedicating major corporate assets. Serving some of the most demanding retailers, Pilot Pen simply can't afford supply chain disruptions. But that's exactly what it had when its third-party logistics provider (3PL) filed for chapter 11. It needed a new outsourcing partner - fast.
"We didn't want to diminish customer service with interruption in service," Estrella says. "That's always the scary part: How long are you going to be down?"
The Solution
Pilot Pen wasn't down long at all. Shortly thereafter, Ryder System Inc. took over the lease on an inventory-handling facility in Guadalajara and signed new contracts with most of the former customers who moved merchandise through the facility, including Pilot Pen.
"Our relationship with Ryder actually began three years earlier, and when Ryder bought the warehouse, they wanted to expand our partnership," Estrella recalls.
In making the transition, Pilot Pen protected the short-term stability of its operations and the long-term visibility in its distribution cost structure in Mexico, Estrella says.
Ryder helped to maintain smooth shipping to key markets and melded its management information system and Pilot Pen's with minimal disruption.
"It was pretty much seamless," Estrella says.
Signing Retailers and Exceeding Expectations
One of Pilot Pen's biggest customers in Mexico, Office Depot, is a demanding retailer that insists on timely order execution.
"Office Depot doesn't accept back orders," Estrella explains. "With Ryder's help, we exceed that expectation with 100 percent fulfillment and 100 percent inventory control. We're also able to meet a very tight shipment delivery window."
In addition to ensuring timely deliveries and inventory storage and management for Pilot Pen, Ryder helps to manage order processing and customer service functions. It also handles motor carrier selection and billing, shipment tracking, and services related to importation of U.S.-made Pilot Pen goods in Mexico.
"We have our own broker," Estrella says, "but Ryder does the follow-up" such as ensuring that extra import documents are provided and that import duties are paid promptly so Pilot Pen products can quickly pass through customs.
Putting Ink to Paper and Signing New Business
Pilot Pen recently captured the business of another U.S.-based retailer in Mexico: department store operator Wal-Mart. It became an official Wal-Mart authorized vendor in early 2007.
"We've been approaching them for a couple of years," Estrella says. "Wal-Mart is currently going through a rationalization of product lines and we're hopeful they'll begin carrying Pilot product again in 2009."
In addition to signing new customers, holding down distribution costs in Mexico is critical to accelerating its growth, so Pilot Pen will continue to work closely with Ryder to develop more efficient ways to do business. One potential money-saving idea under consideration would let Ryder handle Pilot Pen order-taking in Mexico, replacing a current two-step process in which Pilot Pen takes orders and then forwards them to Ryder for processing.
That step would allow Pilot Pen to further delegate its distribution work in Mexico, freeing the company to devote more internal attention to other operations.
"It truly is a partnership, where Ryder is helping Pilot become more efficient and therefore more viable as a supplier in the tough Mexican economy."