IT controls the world of third-party logistics firms

Robert Hopkins’ business card says he’s president and chief executive officer of Hopkins Distribution Co.

But he really considers himself the chief technology officer of the Reno-based provider of third-party logistics services.

That demonstrates the importance that technology plays in the success of the company, which provides warehousing and ships orders for about 30 clients from a 200,000-square-foot center in South Meadows.

Third-party logistics, Hopkins says, is more about technological innovation than it is about warehouse racking, forklifts and strong backs on the loading dock.

“IT controls the world,” he says. “It’s the way it is.”

And nimble use of technology provides a competitive edge for Hopkins Distribution as it woos potential clients.

Hopkins, who launched the company with his wife, Nancy, from a modest warehouse in north Reno 21 years ago, says third-party logistics is basically a simple business.

“They send us the order. We ship the order,” he says.

But the technological complexities start at the instant that clients send customer orders to Hopkins Distribution for picking, packing and shipping.

The orders — 1,500 to 2,000 of them on a typical day — arrive through a variety of technological channels. Some clients rely on e-mail. Others use FTP (that’s short for “File Transfer Protocol”) or Secure FTP sites to communicate with Hopkins Distribution. Some use older software; others are completely up to date.

When the orders arrive at Hopkins Distribution, however, they need to be converted into a standardized format that the company’s employees will use to pull together an order for shipping. Its staff ranges from about 40 to 100 workers, depending on seasonal demands.

As the order is prepared for shipping, Hopkins Distribution’s technology is analyzing shipping options — is a FedEx package delivery better than a less-than-truckload shipment on a common carrier to this particular destination? — and ensuring that hazardous materials are shipped properly.

Unlike workers at many distribution centers, Hopkins Distribution’s employees themselves load trucks that arrive at the company’s docks, and don’t turn that work over to drivers. The company, Hopkins says, wants to ensure that freight is handled properly until the moment that the truck pulls away.

As the order is shipped, Hopkins Distribution’s information technology is communicating back to clients, providing the data they need on a daily basis to prepare invoices. The Reno company also sends freight bills directly to clients without marking up the cost.

The technology demands on distribution companies have grown, Hopkins says, as major retailers require more information about each pallet, and each box on a pallet, that arrives at their stores.

Retailers often require that their vendors — including Hopkins Distribution clients — provide an electronically delivered advance shipping notice.

That allows retailers’ receiving departments to quickly move merchandise from docks to shelves — but it places fresh pressures on distribution operations to meticulously collect data about each shipment.

Some potential clients, Hopkins says, are turning to third-party distribution companies because they don’t want the costs and hassles of providing that level of data to retailers.

“Not everyone can deal with that level of complexity,” he says.

At its most basic, the technology used in distribution centers allows precise tracking of inventories. Hopkins says his company posted a 99.997 percent accuracy rate on clients’ inventories last year.

But as Hopkins works with Chris Kissinger, the managing partner of Top Speed Computer Services in Reno, to keep the company’s IT services on the cutting edge, he’s also focused on keeping things simple.

Hopkins says the company doesn’t want to become so reliant on its technology systems that it would be forced to shut down in case of a major systems failure.

“We can still do it with a piece of paper here,” he says.