Streamlined Business Model Spurs Growth in LogisticsMon, 09/01/2014 - 12:08
The business model of Senator International (Senator) has been streamlined to facilitate quick decision-making, a factor that weighs down numerous other logistics companies, according to its General Manager, Luis Gómez. This focus on efficiency has been made clear in Senator’s warehouse management. Answering to the automotive industry’s insistence for on-time delivery, the company has strategically placed a warehouse in Mexico City’s airport. “Although the warehouse might seem small compared to competitors, high efficiency is maintained and a wide range of services is offered in order to comply with airline and carrier regulations,” explains Gómez. He attributes this efficiency to a series of strategic partnerships that help Senator to operate numerous segments including pick and pack, switch or break down pallets, and providing dunnage for sensitive and unstackable cargo. To further this streamlined model, the company decided to implement the Cargo-wise and Global Solutions software for its sales and marketing operations. “This new system enables a fluent communication between branches and partners operating within the automotive industry,” comments Gómez. Senator has set up a monthly review of its operations to keep track of performance and detect areas of opportunity.
Senator has identified the growing importance of reverse logistics as a core capability for companies in sustainably managing their operations. For example, it provides this service for customers that need to send machinery or parts to Europe for repair. Most of the cargo involved in reverse logistics is sensitive machinery and must be sent using isolated packaging. For efficiency purposes Senator contacts other packaging companies for support in creating special crates. Gómez illustrates that if the sensitive parts are sent to Germany, thanks to an extensive network, a specialized Senator team is present in Germany and can deal with this type of packaging. Senator is looking to replicate the success of its EU network here in Mexico. Although the automotive industry is building up its presence in the Bajio region, Gómez explains that constant communication with clients does not always require a company to move. “Although other logistics operators have been pressured to move entire operations to the Bajio, Senator has not seen this need as Mexico City’s airport is a hub for all airlines and offers many options. However, with the expected boom in the automotive industry, we will set up part of our operations in Puebla,” Gómez explains. Despite being the hub that Gómez describes, the saturation of Benito Juarez Airport has prompted a need for greater air connectivity in the country and speculations have begun about the possible building of a second airport in the municipality of Texcoco. Senator sees this possibility as having a positive impact on its operations and the company would consider a future investment in the new airport. “This forward thinking approach has allowed Senator to navigate the waves of reform that Mexico is undergoing. The reform generating a growing concern within the logistics and automotive industries is the introduction of a new VAT on IMMEX imports which will have an impact of around US$30 billion on these two sectors,” Gómez estimates.
Notwithstanding these concerns, Senator continues progressing in another of its roles: attracting investment to Mexico. Frequent concerns among potential investors are the quality of Mexican infrastructure and the crowded nature of Mexico City. To solve these, Senator points at the potential offered by alternative regions that are less crowded, and proposes industrial parks that match companies’ infrastructure requirements. When advising companies on where to establish operations in Mexico, Senator recommends the Bajio region as it is advantageously located, with access to railway and intermodal transportation. All these extra advisory services aim to meet one of Senator’s goals: moving beyond the forwarding of freight to become one of the points of reference that companies turn to when entering the Mexican market, in the automotive sector and beyond.