Distributors and their role
These key players in the supply chain provide indispensable services not just in the commodity markets but in advanced material arenas as well.
By Sara Black, Technical Editor | March 2005
A global supply chain
Argosy International (New York, N.Y. and Shanghai, China) specializes in distributing high-performance qualified and certified aerospace materials from the U.S. and Europe to the Asian Pacific markets. Argosy represents Cytec Engineered Materials Inc. (Tempe, Ariz.), Akzo Nobel Aerospace Coatings (Chicago, Ill.), Airtech International (Huntington Beach, Calif.) and other major aerospace suppliers. "We're focused on increasing the productivity of our customers, and we do that by partnering with our suppliers and supplementing added-value services," says Argosy's Paul Marks.
Source: Argosy International
One of two Shanghai facilities owned by aerospace distributor Argosy International, with 25,000 ft2 of storage. Argosy also manufactures materials under license to support its Asian distribution.
To achieve cost reductions in a region where shipping can account for 30 to 50 percent of the price of material, Argosy bundles multiple offshore shipments whenever possible to reduce cost. Prepregs are shipped frozen in refrigerated sea containers from Los Angeles directly to the end-user or to multiple warehouses located in China, South Korea, Taiwan, Malaysia and Indonesia, all equipped with freezer capacity. The process is made more complex by the need to differentiate duty-free materials, used to make aircraft parts that will be exported, from materials that will become parts sold in the country, which are subject to value-added tax (VAT) and other charges. The far-flung enterprise is managed by "really good IT specialists," says Marks. Backup computer systems in several cities, including New York and Shanghai, ensure that a crash in one location doesn't bring the company's operations to a halt.
Argosy's services also include repackaging and kitting of prepregs and cores, to simplify fabrication. As a side business, and to support its distribution, Argosy has already established five Chinese plants, which produce woven goods, coatings, honeycomb core and specialty fabrics under license to several of its major suppliers, for both local delivery and export back to the suppliers. "Our converting and manufacturing businesses support our local distribution services," states Marks. "We have a full range of product types, but not a broad offering of suppliers, because of our exclusive partner agreements with a few firms."
Marks foresees Asian material suppliers eventually becoming qualified to manufacture materials for aerospace programs. "As more aerospace manu-facturing moves to the Asian Pacific region, the material supplies need to move as well," he says. As an example, there is ongoing development of carbon fiber manufacturing capacity in China, which could be online sometime in 2006.
On a smaller scale, Lavender CE Pty. Ltd. (Acacia Ridge, Queensland, Australia) supplies the Pacific Rim and Australia with high-performance advanced materials from a single warehouse, says managing director Rudi Steinbusch. Its product offerings include prepregs from Advanced Composites Group Ltd. (Heanor, Derbyshire, U.K.) and epoxy resin from French supplier Sicomin (Chateauneuf-les-Martigues, France). Principal customers are marine and motorsports fabricators. "Lead times are a big issue, particularly with materials shipped via sea freight," says Steinbusch. When supplying smaller orders of prepreg, air freight is typically used due to the large distances involved and to maximize shelf life.
Lavender adds value for customers by providing in-house engineering capability to do structural analysis, including finite element analysis (FEA) and computer-aided design (CAD), for composites as well as other materials.
De-Comp Composites Inc. (Cleveland, Okla.) exemplifies the distributors who have successfully carved a niche by supplying both aerospace and commodity markets, says general manager Rex Nutter. "Aerospace customers make up about 25 percent of our business, with the remainder spread across sporting goods, automotive, marine, electronics and infrastructure." Affiliated with resin supplier Resin Services Inc. (Sterling Heights, Mich.), the company supplies a complete line of both primary materials and consumables like sealant tape, breather, peel ply and vacuum bagging components as well as "a lot of tooling material."
Most shipping is done via common carriers and UPS. The company is continuously evaluating the need for additional warehouses. Currently, Nutter says the company is looking at the west coast for its next facility, to provide better service and minimize freight costs to Asia.
"The best distributors blur the lines between the supplier and the distributor, giving the customer seamless service," says Marks. Given the diversity of the composites manufacturing industry and the growing global economy, distributors will continue to play a key role in customer success -- far into the future.
