Send and Receive

As its name implies, GENCO Supply Chain Solutions specializes in warehouse management and in moving freight, managing 37 million square feet of warehouse space and providing $1 billion in freight services annually.

The Pittsburgh-based company’s efforts to offer total supply chain services has made it a market leader in reverse logistics, handling returned and unsold products. This aspect of its business in particular has meant that GENCO has become a large-scale generator of recyclables and a company that can play a large role in identifying recycling opportunities for itself and its allies in the recycling industry.

The roots of GENCO trace all the way back to the 19th century, when in 1898 Hyman Shear began using a horse and wagon to deliver commodities in the Pittsburgh area. H. Shear Trucking Co. was powered by horses until 1917, when Hyman Shear purchased his first gasoline-powered truck.

During the first half of the 20^th century, that single truck grew into a small fleet, and the service area expanded geographically. According to the GENCO Web site, Hyman’s son Sam began leading the company in the early 1940s and selected the name General Commodities Warehouse and Distribution Co. to describe a business that now included warehousing and distribution services.

Sam’s son Herb Shear represented the next generation of leadership, joining the company in the early 1970s. Father and son worked together to increase the company’s service offerings and to expand the company’s technology base.

In the late 1980s, Herb focused on the product returns process and helped develop a centralized returns process that is now frequently referred to as reverse logistics. The company developed its own in-house returns processing software and product liquidation capabilities in the early 1990s and offered this reverse logistics service to help customers both "manage and maximize the value of their returned products," according to the GENCO Web site.

The GENCO name was adopted in 1995 when the company consolidated its divisions and service offerings under the name GENCO Distribution Systems.

Through organic growth and niche acquisitions, the company has increased its business activities in areas such as transportation logistics, parcel negotiation and audits, damage research, pharmaceutical services and government supply chain services.

In 2007 the company changed its name to GENCO Supply Chain Solutions to better reflect what it calls its comprehensive range of value-added solutions.

The company remains based in Pittsburgh and now ranks itself as North America’s second largest third-party logistics company, working from some 130 distribution centers, return centers and offices in the United States and Canada.

With a client base that includes retailers, electronics manufacturers, pharmaceutical companies, food and beverage makers and other consumer products companies, GENCO serves a healthy percentage of Fortune 500 companies (as well as government agencies and military installations).

Some 7,000 GENCO employees help manage more than 37 million square feet of warehouse space and more than $780 million in annual sales.

The company’s reverse logistics and product returns service has also put it in a position to liquidate more than $5 million worth of merchandise daily, which is where GENCO’s ties to the recycling industry become particularly strong.

The wide variety of clients served by GENCO also means that a wide variety of products flow into its return centers and asset recovery facilities.

In the case of most of GENCO’s customers, especially ones such as electronics OEMs or retailers who sell high-value products, achieving the top resale or liquidation value can be a foremost consideration.

In other cases, such as with expired food and beverage products or lower-valued small retail items, disposing of products properly can be the highest priority for customers.

GENCO’s Director of Marketing and Communications Don Rendulic estimates that some 50 percent of what GENCO Supply Chain Solutions’ handles through its reverse logistics services it resells or remarkets through its extensive network of retail, online auction and distribution contacts.

Another 45 percent is eventually returned to the OEM so it can manage the last steps of the process itself, while some 5 percent is disposed of or, more commonly, recycled.

Throughout this decade in particular and across the full spectrum of customer sectors, an emphasis on recycling has grown steadily. "Some people have said that sustainability could be a ‘flavor of the month,’ but with many of our customers I don’t see that as being the case," says Tim Konrad, a senior vice president and strategic account manager with GENCO.

Recycling opportunities are prompted by many considerations, according to Konrad and Rendulic. "We’ve embraced sustainability as a company, and our customers have too," Rendulic says.

Surplus liquidation still largely involves finding new resale outlets for merchandise, but resale is not always an option for some of the company’s clients. This consideration is just one of several ways that GENCO is involved in the recycling industry:

Konrad and Rendulic note that GENCO takes a flexible approach to suit the needs of its different customers and that many of these service models continue to yield new recycling opportunities.

As it has grown during its 111-year history, the company that is now GENCO Supply Chain Solutions has continually added services to its menu.

Companies that recycle metal, paper and plastic can benefit when GENCO cooperates with a customer on a recycling initiative. Konrad notes that computer manufacturer Dell has worked with GENCO to ensure that the foam packaging that accompanies returned products and parts is recycled.

Another client company, Sears, is protective of its tools brand, which means that returned products are not to be re-marketed in any way, but rather destroyed and the metals and other materials recycled.

Recycling opportunities are likely to continue. Konrad notes that at the 2008 Reverse Logistics Association conference, he gave a presentation outlining the growing influence of sustainability, which he defined as "The ability to meet the needs of future generations at least as well as we meet our own."

Students hitting the workforce have sustainability as a priority, with 75 percent of MBA students surveyed saying they would accept less pay to work for a company they judged to be a more responsible company.

Konrad says he does not see that trend reversing. "I can see this attitude taking place in young people today, such as my 13 year old. They are being taught about energy savings and recycling—we know that education is taking place," he comments.

That is one of many factors leading Konrad to say he believes GENCO Supply Chain Solutions’ recycling involvement will only increase. "We’re getting pushed more and more by our customers to help them meet their vision of sustainability; GENCO has to help make their vision work."

With corporate CEOs being just one of four constituencies clamoring for sustainability—along with shareholders, consumers and employees—Konrad says of GENCO’s effort in the area of sustainability and recycling, "I think it’s here to stay."