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Although Kenco Logistic Services is Cummins chosen 3PL, a separate contract packager was still being used. Their low cost building in a high unemployment area gave them per-unit cost advantages. However, the cost to the supply chain was a ten-day cycle time and two-way transportation for parts. Based on the success of the consolidation project, Cummins made the decision to relocate the current New Parts packaging operation from Michigan to the Kenco-managed Memphis MDC. This process will require the addition of 140 new Kenco employees and a re-engineering effort at the MDC to accommodate the additional storage requirements. Some of the project highlights include:
- Six Million packs per year – 72 Million pieces per year
- $2.5 Million investment – $10 Million net savings
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