Manufacturing leaders understand the need for an efficient supply chain as they seek to maintain and grow their profits. Changing economic conditions, domestic and foreign competition and fluctuating raw materials prices can pressure even the best companies as they seek ways to protect and expand their businesses.
Our clients in manufacturing are able to grow their businesses and increase competitiveness by combining their market expertise with our extensive experience, tools, and resources. By reducing transportation related costs, improving lead times to customers and increasing visibility to shipments in transit, manufacturers of products ranging from industrial components to food, furniture or chemicals gain a competitive edge through supply chain enhancement.
Shipping Mode Optimization Leads to Significant Freight Rate Savings
A client had moved their product from Mexico into the United States under the assumption that full truckload shipments are the most cost-effective mode of transportation. Thus, the client shipped full truckloads of freight relatively short distances to various points in the United States. Those truckload shipments were split into smaller shipments at LTL terminals for final delivery.
Transportation Insight, after analyzing the client’s historical data, mathematically modeled an LTL-only network to move the client’s freight. Transportation Insight then determined that an LTL-only network would be much less expensive and provide much better transit times than the client’s current network.
Within a few months, the client had modified their network and immediately began realizing substantial freight rate savings. The savings included a 9.2% reduction in transportation expenses and average reduction in transit times by nearly a full day across its entire network.
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Vendor Compliance Initiative Improves Client Profitability
A leading manufacturer of tractors experienced unnecessarily high inbound freight costs due to their vendors’ choice of carriers. Although the client provided basic carrier routing guidance to their vendors, the vendors still did not effectively determine the lowest cost carrier on a shipment-by shipment basis. The client’s purchasing department came to Transportation Insight for help in overcoming this challenge.
Transportation Insight—together with the client—placed a link on the client’s website that allowed client vendors to access a shipment routing application to determine the client’s preferred carrier for every shipment sent to the client. The site also provides a shipment confirmation number that vendors include on each bill of lading for the client and Transportation Insight to monitor routing compliance. Transportation Insight then sends weekly vendor non-compliance reports to the client’s purchasing department to support any freight charge-back policies the client purchasing department wants to implement.
As a result of this integrated technology solution, vendor selection of the least-cost carrier available increased from 57% to 83% in a three month period, leading to a 9.4% reduction in the client’s inbound freight costs.
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Transportation Insight Helps Client Determine Ideal Location for Additional Distribution Center
The client had three domestic manufacturing locations and one location in Mexico. Their facilities were overcrowded and land-locked. Their business was growing and they wanted help choosing an ideal location for their first Distribution Center (DC).
Transportation Insight Logistics Engineers consulted with the client to understand their near-term needs for a DC as well as their long-term strategy to shift additional manufacturing volume into their Mexico facility. By querying the data warehouse kept for the client by Transportation Insight, the Engineers were able to study the client’s historical shipping patterns in great detail. They then defined the current transportation costs, transit times, and service quality being experienced by the client. Next, they utilized unique knowledge of the carrier pricing landscape around the country and proprietary modeling techniques to model and evaluate several potentially favorable DC locations around the country with the client’s actual freight. Finally, the Transportation Insight Engineers provided specific DC location recommendations with associated transportation cost and transit impacts to the client.
As a direct result of the DC consulting project, the client was able to select an ideal location for their DC to meet near-term capacity needs as well as support their future plans for increased production in Mexico. The location of the new DC was so well placed that it also provided a more than 4% transportation cost savings opportunity for the client company on a spend of $3.5 million.
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