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Supply Chain Edge
34367 Heatherwood Avenue
Suite 105
Cleveland, Ohio 44011
(ph) 440.937.5151
About Us
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Success Story 2008 – 3rd Quarter
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THE CLIENT
Leading company in the vehicle remarketing industry with logistics expenses exceeding $90 million annually (U.S., Canada, and Mexico alone).
SUPPLY CHAIN EDGE (SCE) MISSION
Client required additional bandwidth to drive cost reductions in transportation, develop strategies to maximize transportation as a profit center, and redefine processes and policies that were driving up costs. Client margins were beginning to erode due to inefficient logistics cost drivers, strategies, and processes.
CLIENT LANDSCAPE/HISTORY and SCE APPROACH
Transportation costs, practices, and policies were initiated and performed independently at each site (over 25 sites) using three distinct modes of transportation (contract carriers, company owned trucks, and company drive away services). SCE analysis showed minimal potential for pure rate cost reduction (through a collective bargaining approach) due to limited areas of operation for each site with little or no overlap. Each site was serviced by local carriers.
However, the drive-away operations and the company trucks were less than efficient and became the major point of focus. Each site had a different mix of customer types requiring some level of “uniqueness” for each site’s solution. Sites were evaluated for the optimum mix of the three distinct transportation modes. Dispatching logic was developed along with tools for capturing and analyzing transactional data and for reporting results.
The optimal solution developed for each site included the best proportional mix of transportation mode types, defined operating radii or designated zones for each mode type, and the continual identification and elimination of practices and problems resulting in lost or nonproductive time.
BOTTOM-LINE
As SCE worked with each site to implement the recommended changes and the sites began operating using the SCE developed logic, savings were quickly realized. Savings at the various sites were as high as 40% where the average savings ranged from 18 – 22%!
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