The companies and organizations below have all chosen to operate in Atlanta. Their stories demonstrate Atlanta’s position as a global supply chain leader and a place where you can successfully start and grow a business.
"When we relocated here back in 1995 Atlanta was already on its way to becoming the technology epicenter of the southeast. We saw this city as a place of tremendous opportunity both in terms of the recruitment pool with Georgia Tech right in our backyard and the centralized location for travel."
President and CEO,
Manhattan Associates: A High-Tech Growth Story in Atlanta
Manhattan Associates was founded in—and took its name from—Manhattan Beach, Calif. Executives, however, soon realized the location wasn’t ideal for a supply chain technology company. They canvassed the country looking for a place with good technology talent, as well as proximity and convenience to customers and potential customers. They chose Atlanta, which had the added bonus of being a logistics hub.
After five years in California, Manhattan Associates moved to Atlanta in 1995 and has become one of its adopted hometown’s success stories. Manhattan, named Logistics Company of the Year in 2008 by the Metro Atlanta Chamber of Commerce, provides supply chain software solutions to about 1,200 customers across the globe. The company employees a total of 2,100 people, half of whom are based at headquarters. Jobs, for the most part, are high-tech and high-paying. In 2008, Manhattan was the largest employer of Georgia Tech graduates.
Despite the current economic slowdown, CEO Pete Sinisgalli said he expects Manhattan Associates to continue growing, both by deepening existing customer relationships and acquiring new customers.
Manhattan got its start with solutions for warehouse management, and this specialty still accounts for about half of its revenue growth. However, the company has expanded its offerings and now offers solutions for every phase of supply chain management—planning and forecasting, lifecycle management, inventory optimization, transportation lifecycle management, and of course, distribution management (including warehouse management). There are a total of 28 products across these five categories.
The goal is to get more customers using multiple solutions, which soon will all be on the same technology platform. As companies become more focused on saving money during the economic slowdown, Manhattan is well-positioned to help them do that, said Sinisgalli. “This is a good opportunity for us to deepen our relationships with our existing customers,” he said.
Customers report that Manhattan has saved them 10 to 20 percent on labor costs, 10 to 20 percent on distribution costs and 5 to 15 percent on transportation costs. Customers are able to reduce inventory by up to 50 percent, Sinisgalli said.
Commitment to Research
Manhattan spends big bucks on research—about $200 million during the past five years. The company plans to spend an additional $50 million in 2009. Research is focused on creating new technologies for customers. One piece of the research program is the Science Advisory Board, made up of professors from schools like Columbia, MIT, Princeton and Georgia Tech.
Here’s an example of a problem these high-powered thinkers might work on. When oil was cheap, it was generally considered smart to keep inventories low. A company could justify a lot of trips back and forth in order to keep inventory costs at a minimum. With oil prices now more volatile, figuring out where inventory levels should be becomes much trickier. The professors have worked on algorithms that allow customers to make adjustments. “This is very complex math,” Sinisgalli said.
A Story of Growth
Since its move to Atlanta, Manhattan has enjoyed consistent growth, adding customers, increasing revenue and growing its workforce. In 1997, the company had revenue of $32.5 million. A decade later, in 2007, revenue was $337.4 million. Part of this growth has come from acquisitions, including Evant, ReturnCentral, Streamsoft and Logistics.com.
Manhattan Associates went public in 1998 and is traded on the Nasdaq undert the ticker symbol MANH.
Today, Manhattan Associates has several U.S. offices, including in California and Indiana, as well as international offices in Australia, China, France, India, Japan, Singapore, the Netherlands, and the U.K.
Manhattan claimed 14 straight quarters of double-digit revenue growth, a streak that ended in mid-2008. Sinisgalli expects the company to return to that growth rate in the future, as the overall economy improves. He hopes that much of the growth will come internationally. Currently, about 25 percent of revenue is generated overseas.
"We continue to make investments around the globe," Sinisgalli said, "even as we benefit greatly by being located in Georgia."
The story of Chainalytics is “really about filling a void in the market,” said founder Mike Kilgore.
Kilgore, always captivated by transportation and logistics, got an undergraduate degree in transportation/physical distribution from Auburn University and a master’s of science in business logistics from Penn State. He went to work at Ernst & Young to specialize in supply chain management, specifically focusing on designing networks of manufacturing and distribution facilities for companies. While Kilgore had great success applying supply chain software for his clients, the large consultancy took too much of a generalist approach – exposing him to a wide variety of services and industries, but limiting his specialization in supply chain analysis.
To further advance the way supply chain decisions were made, he left to work in the supply chain software industry in the late 1990s. After becoming frustrated with software’s pressure to “put a square peg in a round hole”, he decided to return to his roots of consulting. He knew that working at a big firm would offer the same impediments the second time around, so he decided to start his own firm specializing in supply chain analytics. He realized a need for a service that provided optimal, but practical analysis – one that would assist companies with their most important decisions like to move production overseas, switch suppliers, or relocate inventory.
"I knew we needed a highly experienced and skilled team to help executives make better decisions," he said. "And this idea became our business. We help companies make better decisions through analytics. We thrive on complexity. The human brain cannot handle that much complexity, so we use tools and techniques that allow us to sift through the complexity and make the right decisions obvious." Working with CEOs of Global 3,500 companies, Mike’s company has gone on to profitably deliver more than a billion in savings to its clients.
That was in 2001, and today Chainalytics employs almost 50 people around the globe with roughly one-half of the team in Atlanta. While its clients are national and even global in scope, Chainalytics has picked cities like Atlanta, Denver, and Chicago to lay its roots because of their ability to attract talent. Atlanta is an easy place to recruit people because of the good quality of life. That’s important, Kilgore said, because his company is so specialized that "when we find someone with the experience, knowledge, and skills we want, there are few substitutes."
Atlanta has also been a good home for Chainalytics because of the large logistics community – Kilgore jokingly refers to it as the “Atlanta Logistics Mafia” – that has been instrumental in Chainalytics’ ability to network and recruit the right candidates. This base of supply chain professionals is enhanced by the strength and focus of Georgia Tech’s industrial engineering program, which has a strong presence in supply chain.
Chainalytics, named a finalist for Logistics Company of the Year in 2008 by the Metro Atlanta Chamber of Commerce, has enjoyed roughly 40 percent compounded annual growth since its founding. Kilgore hopes to eke out a few more points of growth this year, despite the recession and a decline in the total market. These days, Chainalytics regularly competes against big consulting firms for business—and wins. "In 2009, if we just hold the line on revenue, we will gain market share from our competitors."
"Our differentiation is our expertise. There is no burn and churn in our business. We partner with our clients for the long haul and work diligently to help them uncover not only the optimal decisions, but also the ones with the lowest risk and highest return," said Kilgore.
Chainalytics still does plenty of network design, its flagship service in the early days. The firm also helps clients solve business problems related to other facets of supply chain, such as transportation management, transportation procurement, inventory management and portfolio management. Its Model-Based Benchmarking Consortium – that now contains over 70 companies representing over $15 billion in freight spend -- holds its annual summit in Atlanta each year.
Fast-growing 3PD got its start—and its money—in Atlanta
While working for Home Depot in the 1990s, one of Karl Meyer’s jobs was to improve the quality and efficiency of the professional customer delivery program. That meant figuring out how to make the average delivery less expensive for Home Depot.
Everything was being delivered on third-party flatbed trucks. It would be less expensive, Meyer knew, to deliver certain products, such as appliances, on box trucks. The problem is Meyer couldn’t find a national, professional box truck service with consistent customer service.
He got the idea to start his own, and in 2001, 3PD was formed. The new company specialized in dedicated fleets, with trucks bearing the name of its customers. At first, customers were local, including Dekor (started by another Home Depot alum Jim Inglis). Trained driver teams wore uniforms and installed and assembled products. The company handled only last-mile deliveries, allowing it to become the leader in this niche.
By the end of the first year, 3pd was big enough to bid (successfully) on Home Depot business. This paved the way for operations in Denver, Jacksonville, Portland, Phoenix, Salt Lake City, New York and other markets.
In 2002, more big-time clients signed on, including GE and Lowe’s. Growth continued, and by 2004, revenue was $100 million. The next year, it was $135 million. In 2008, revenue was close to $300 million. Along the way, 3pd raised money, first from a local angel investor and later from Arcapita, which has an Atlanta office. 3PD bought two companies and expanded its offerings. Nowadays, in addition to its core dedicated fleet business, 3PD offers so-called transactional business (when a retailer that doesn’t regularly do deliveries hires 3pd to deliver a large product such as a pool table).
3pd has 1,700 driver delivery teams, 600 support employees and 500 locations throughout the U.S.
Meyer, a native of metro Atlanta, said his hometown has been the right place to grow 3pd. There’s a good pool of logistics professionals for recruiting, thanks to Georgia Tech’s top-ranked industrial engineering program and other large companies with logistics focuses, such as Home Depot, UPS, Georgia-Pacific and Manhattan Associates. The quality of life in Atlanta makes it easy to woo employees from other places. He also said that when it comes time to raise money, Atlanta is as good a place as any outside of New York.
UPS Supply Chain Group
"UPS has a 97-year heritage of being a logistics and transportation leader. Atlanta has the heritage of being the center of commerce for the South and is continuing to grow as a center of commerce for the world. We are proud to make our home here."
Senior Vice President,
UPS Supply Chain Group
Created in 2002 by combining 19 companies that provide global supply chain management services, Atlanta-based UPS Supply Chain Solutions has become a global leader in supply chain management,international trade and transportation services. UPS Supply Chain Solutions, a unit of package giant UPS, offers more than 750 facilities ranging from regional logistics and technology centers to small strategic stocking locations and critical parts depots. The company has refrigerated and bonded distribution centers and is located in 120 countries. UPS Supply Chain Solutions offers transportation and freight services (ground, ocean, air and rail), freight forwarding, international trade management and customs brokerage.
About 120,000 shipments a day for 100 corporate customers leave the Supply Chain Solutions warehouses. And while employees there don’t wear the brown outfits of UPS truck drivers or help sort 900,000 air shipments a day like the package handlers at Worldport [in Louisville], the logistics workers represent a growing and increasingly important part of the UPS network.
"Supply Chain Solutions generates $2 billion a year in revenue — about 8 percent of UPS’ $33.5 billion take. It allows UPS to be a ‘single-source provider’ for a variety of business services,” said Solutions Senior Vice President Bob Stoffel. “We do much more than small package. We want the general public to think of us as a leader in global commerce,” according to The Courier Journal Louisville, Kentucky,“Logistics Unit Makes UPS More than a Shipper.” (2-29-2004)
UPS relocated its world headquarters to Atlanta in 1991 with 1,000 employees. It now boasts more than 355,000 employees worldwide.
Georgia Tech Supply Chain & Logistics Institute
"Atlanta is an ideal home for TLI. The region’s infrastructure, companies and expertise provide a vibrant real-world lab for Georgia Tech faculty and students. Through our programs, graduates and faculty we strive to continually develop and nurture logistics innovation and Atlanta’s global logistics environment."
Harvey M. Donaldson
Georgia Tech Supply Chain & Logistics Institute
The Georgia Tech Supply Chain & Logistics Institute (SCL) is the world’s largest research and education center focused on global logistics and supply chains. SCL is headquartered in Atlanta and is a unit of Georgia Tech’s School of Industrial and Systems Engineering – a world-renowned engineering program that has been ranked number one by U.S. News and World Report for 13 of the past 14 years. Georgia Tech is a natural home for an institute like SCL, which is devoted to advancing the design and application of new logistics technology and solutions. At the heart of the center is groundbreaking research that translates into educational and industry outreach programs.
Professional development and executive education courses on logistics-related topics are offered throughout the year at Georgia Tech’s new Global Learning and Conference Center. Since 1992, more than 6,000 logistics professionals, inclusive of 600 international attendees, have participated in SCL conferences, seminars and short courses. Georgia Tech’s School of Industrial and Systems Engineering also offers the Executive Masters in International Logistics (EMIL), a fully accredited masters degree program offered in a unique part-time format for high potential logistics executives.
Overall Georgia Tech offers the most comprehensive curriculum of logistics-oriented engineering degree and certificate programs in the world. These Georgia Tech graduates provide technical and executive leadership to the world’s logistics companies, consulting firms and government agencies. SCL also places significant emphasis on industry outreach and economic development activities. With programs like Leaders in Logistics and Supply Chain Executive Forum, SCL is partnered with more than 25 corporations and government agencies. Through these sustaining relationships, SCL sponsors a wide range of field-based research projects and industry conferences. Since 1999, SCL has also partnered with the Government of Singapore and the National University of Singapore to operate The Logistics Institute Asia Pacific in Singapore. They recently established the Sino-U.S. Global Logistics Institute in Shanghai, China in partnership with Shanghai Jiao Tong.