Denis Reilly says that when the coronavirus pandemic emerged early this year, Kenco Group officials saw it had the makings of a big deal.
Reilly, chief executive of the Chattanooga-based warehouse and logistics company, said Kenco crafted a task force to manage the safety of its nearly 5,000 employees across the United States, including 700 locally, and the supply chains of its customers.
"While a lot of different businesses contracted, we had to keep running," he said. "We think we were very successful. We were able to keep the supply chains up and running and keep employees safe."
Reilly said 2020 is "a really interesting year to say the least," and one that marks the company's 70th in business, making it one of Chattanooga's longest continually operating ventures.
Kenco was started in 1950 by Jim Kennedy Jr. and his brother-in-law, Sam Smartt Sr. Today, Kennedy's daughter, Jane Kennedy Greene, is the company's chairwoman. Kenco calls itself the largest woman-owned third-party logistics company in the U.S.
- Kenco CEO Denis Reilly
Reilly, a Philadelphia native and University of Tennessee graduate who joined Kenco as CEO about three years ago, said officials aren't assuming the changes brought on by the pandemic are going away any time soon.
While employees on the corporate side have worked from home as in many industries, Kenco has brought back about 30% of those workers with plans to return more to their offices by year's end.
In terms of business overall, Reilly doesn't expect much to change until there's a coronavirus vaccine, and it will be six to eight months after that until enough people receive it.
"It won't play out until the end of next year. If it happens quicker, that's great. We're planning for the long game," Reilly said.
Despite the disruption created by the coronavirus, Reilly expects Kenco revenues and profits to finish the year up over 2019. He wouldn't provide specific numbers, but the company last year estimated revenues would hit about $650 million in 2019.
In terms of Kenco customers, Reilly said the food and consumer package sectors have done well so far in 202o. A number of its health care customers' product lines have accelerated, he added.
"We think that will continue, though not as dramatic as it spiked through the roof," Reilly said. "I think there's solid demand. People are staying home for the most part."
He said e-commerce and fulfillment has advanced quickly amid the pandemic, compressing five years of typical growth within about six months.
"We saw larger customers want to get there quickly," Reilly said. "That particular part of the business has taken off."
Kenco is adding multiple-tenant facilities, citing "the Amazon effect," he said. The company now has 90 distribution centers and 30 million square feet of space across the country.
"Everyone wants their product today or tomorrow. A lot of customers want inventory closer to customers," Reilly said. "It's making sure we have a solution to be successful."
That concept of listening to its customers is one reason why Kenco has lasted for seven decades, he said.
"We stay close to our customers," Reilly said. "So many things are changing. The speed is tremendous."
But, he said, Kenco's average relationship with a customer is 14 years.
Staff file photo by C.B. Schmelter / At a tour of Kenco's Innovation Lab late last year, LogistiVIEW CEO and founder Seth Patin, right, helps John Freeze, from the University of Tennessee at Chattanooga, as he demos a pair of augmented reality smart glasses. Kenco officials said the company invests a lot in technology."We get them and retain them," the CEO said. "We listen and we modify services."
Company officials have a mindset of continuous improvement, Reilly said, and they're thinking about getting better daily.
"We hire people who are entrepreneurial," he said. "We invest a lot in people and technology. It drives down costs and improves services."
For example, Kenco recently launched DaVinci AI, which it calls an innovative advanced analytics product for the supply chain. DaVinci AI can utilize both structured and unstructured data from non-traditional sources that impact the supply chain, such as weather and traffic information, officials said.
The analytics tool also can use simple files from traditional sources, such as Excel, to create predictive models to allow customers to proactively prepare and consistently deliver throughout disruptions.
According to Kenco, DaVinci AI has predicted highly accurate outcomes since the beginning of the pandemic and already produced over $1 million in annual savings within the company's customer operations.
Jason Minghini, vice president of supply chain solutions for Kenco Logistics, said customers achieve better agility, resiliency, and predictability in their supply chain planning and operational functions with DaVinci AI.
"We develop and deploy solutions designed for the unique needs of each customer that minimize complexity and enable them to deliver on their key service metrics," he said.
Reilly said that another reason for Kenco's longevity is that the company is "successful and relevant as a tough competitor."
"The owners are committed to retaining top-notch talent," he said. Kenco has "a unique culture" where employees are part of "a big family," Reilly said.
"We tend to win business based on culture," he said. "Companies want to do business with us because they feel we're honest and we care."
Reilly, who has 37 years in the industry, noted that when he worked for other companies he "never wanted to compete against Kenco."
Contact Mike Pare at mpare@timesfreepress.com. Follow him on Twitter @MikePareTFP.
Staff photo by C.B. Schmelter / Kenco President and CEO Denis Reilly says it has kept is customers' supply chains running during the pandemic while keeping workers safe.