FREIGHT

CASE STUDY: packaging and freight optimization

Industry:
Leading Building Components Manufacturer
Company Size:
2,000+
Project Location:
Mexico
Problem Statement:
As part of a cost reduction program, our customer decided to investigate the intercompany freight costs between their components plant in Mexico and their three US manufacturing and assembly plants. KPIs indicated that the costs of those daily transports per unit/mile were significantly higher than their outbound shipping costs to external customers. If our customer would not find the root causes for the high freight costs and not develop effective counter measures, the risk of continuously wasting money would remain and weaken our customer's competitive position.
STREAMLINERS’ Approach and Solution
Meeting:
High level understanding of intercompany traffic, especially modes, volumes and routings; define scope and pilot
Deep Dive:
Breakdown and comprehensive analysis of all parameters of freight costs (e.g. carriers, routings, mileage, modes, packaging, truck utilization, transit times, etc.); scoring of all freight parameters, gaps and inefficiency analysis
Hypothesis:
Our deep dive analysis revealed that the truck utilization for all intercompany shipments is $0.5 M.
Project:
1 consultant
12 weeks
Deliverables:
Secondary packaging optimized for double-stacking and higher truck utilization
New loading scheme developed and implemented
Loading staff trained on new packaging and loading process
Bottom Line Impact:
Truck utilization increased from <65% to >98%
Annul freight savings of >$0.6 M

Savings per Plant

 

Fees vs. Bottom Line Impact