Look Before You Leap: Taking Stock of Knoll's Current Distribution Operations

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	- Ford Motor Company - General Motors de Mexico - International Truck & Engine Corporation - Knoll Incorporated (Case Study 1) - Knoll Incorporated (Case Study 2) - Mission Foods - Whirlpool Corporation

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Knoll knew a major shift in its transportation and distribution strategy would be no small task. They needed a third party logistics provider which was first willing to acquire a deep understanding of the company's current distribution operations and infrastructure. Furthermore, as the furnishings industry was entering an economic slump in 2001, Knoll needed a 3PL that could provide flexible, cost-efficient solutions.

"We could not risk the cost and customer implications of a blind change in our logistics strategy. Penske Logistics' willingness to understand every nut and bolt of our distribution processes was crucial to a successful change in our operations."
Rich Cirulli, Vice President of Logistics, Knoll, Inc.

Penske Logistics met these initial requirements and, once selected, hit the ground running. The first step was to conduct an in-depth analysis of Knoll's current operations. For nearly 14 months, Penske closely monitored product volume, transportation rates, delivery points and freight combinations. During this time, the unstable economy allowed Penske to acquire data representing the entire spectrum of productivity, while enabling Penske to theorize logistics strategies in a variety of economic conditions.

Penske's next step was to help Knoll develop benchmarks that would allow for the measurement of future success. Using a combination of Knoll and Penske financial specialists, the team analyzed previous financial statements to determine areas of high costs. The team quickly identified two key areas for cost improvement - transportation and labor. These areas would be closely measured throughout the change in Knoll's transportation and distribution strategy.

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