AirBoss’ supply chain team is adjusting well to industry challenges.
By Alan Dorich, Senior Editor at Knighthouse Publishing
AirBoss of America Corp. is in the business of helping its clients conquer their challenges. “As engineers, we help our customers solve their problems and discover superior rubber-based solutions that can improve their bottom lines,” Vice President of Corporate Supply Chain Kimberly Gallagher says.
Based in Newmarket, Ontario, and with locations in Kitchener, Ontario; Acton Vale, Quebec; Auburn Hills, Mich.; Scotland Neck, N.C.; and Landover, Md., the firm is one of North America’s leading custom compounding companies and manufactures rubber-based formulations and products. “We serve various industries, including automotive, heavy industry, construction and infrastructure, oil and gas, and defense,” she says.
Gallagher joined AirBoss as its vice president of corporate supply chain in July 2014. Although the company is constantly evolving, “Our main objectives as a service group have not changed,” she says.
Instead, AirBoss’ Supply Chain group remains firmly committed to supporting the needs of its business, achieving the best total cost from a right-sized supply base, establishing and maintaining positive supplier relationships, and ordering and transporting materials effectively. “The way in which we achieve each of these objectives may change, but our goals and level of service do not,” she asserts.
Like all companies, AirBoss is coping with supply chain challenges. “One of the most difficult issues we face is that approximately 80 percent of what we purchase is either commodities or are heavily influenced by commodity pricing,” Gallagher says. “This kind of market makes supplier cost reductions more difficult to achieve.”
However, AirBoss strives to treat its supply base fairly, regardless of market factors and looks for creative ways to reduce its supply chain costs. “We are working with our supply base on things like product improvements that can result in cost savings, and non-traditional cost reduction impacts like payment term improvements and inventory reductions,” she says.
AirBoss also strives to remain cost competitive and nimble, and accomplishes this by procuring material from across the globe. “Uncertainty with both NAFTA agreements and newly introduced and pending tariffs is adding a layer of complexity into the supply chain,” Gallagher says. “AirBoss is proactively working to identify and mitigate the associated costs as much as possible.”
The Perfect Storm
AirBoss is coping with freight challenges as well. “A variety of issues, including a robust economy, increased e-commerce, driver shortages, electronic log mandates and volatile oil prices have created the perfect freight storm,” Gallagher says.
But the company believes it is well positioned to mitigate these challenges to the extent possible. “We have positive and long-standing relationships with many of our carriers and strive to be a shipper of choice,” she says.
For example, AirBoss partnered with Penske Logistics to proactively take advantage of the firm’s logistics expertise and its own economies of scale. “Our goal is to preserve service levels and avoid disruptions while controlling costs in an unpredictable market,” she says. “In addition, we are implementing a TMS system so that we are able to automate our process and create a digital, connected and flexible supply chain.”
Gallagher is proud of her supply chain team at AirBoss, which includes professionals that have been with the company for more than 25 years, as well as new faces who introduce exciting innovations. “Each of our divisions has unique supply bases and my team is constantly interacting and establishing best practices,” she says.
“When I joined in 2014, creating a cohesive supply chain team was one of my main goals, and I am very pleased to see the benefits of a successfully integrated team,” she continues. “Someone I greatly admire once told me that their most lofty ambition was to build the kind of company that they would like to work at, and I try to remember that every single day and create that kind of environment for my team.”
Gallagher is also proud of the way AirBoss treats its supply base. “Our leadership team fully understands that if we do not have strong, positive relationships with suppliers, we simply cannot be successful. In the same way that we strive to be supplier of choice, so must we be a customer of choice.”
Going forward, AirBoss will continue focusing on improving the bottom line and its value to shareholders, as well as its supply chain. “One of the things that we’re trying to focus on is more advanced purchasing than reactive purchasing,” she says, noting that the company aims to continually identify additional technologies or product improvements from its current suppliers or new suppliers.
AirBoss strongly focuses on its environmental performance. “We strive to meet or exceed all federal, provincial and municipal guidelines for emissions and water discharge,” Gallagher says.
The company also has made progress in reducing the amount of waste it sends to landfills. “Scrap rubber, our single largest waste material, is routinely sent to developing nations where it is re-purposed for use in footwear and other items,” she says, noting that it also recycles packaging waste, wood, metal and glass.