This national retailer had great success in its initial strategy to sell its products commercially through its brick-and-mortar locations across North America. As the retailer and its customers’ shopping preferences evolved, however, expanding e-commerce operations became its main focus and long-term strategy. It became apparent during the business model shift that service levels needed to be optimized without interrupting the transition.
In addition, while the retailer was in aggressive growth mode, it discovered that current shipping operations and reporting capabilities did not align to business objectives. Less-than-optimal information management clouded multi-year trend analysis, while invoice audit and payment protocols in place did not achieve a desired level of contract compliance.
An acquisition added complexity to the challenge of optimizing shipping operations as additional distribution points were added to a network that was already struggling to address efficiencies in transportation mode selection. Investment in technology improvements across company supply chain systems increased the need for integration across often disparate systems. Due to the retailer’s corporate initiatives – including improved store productivity, digital growth and expansion into new specialty markets – budgeting transportation costs and creating an efficient supply chain became a priority in order to support its business model shift and rapid growth.
Transportation Insight teamed up with the retailer to:
- Assess the retailer’s current landscape through detailed shipping data analysis
- Develop a clear understanding of the retailer’s financial goals, customer service initiatives, logistics requirements, fulfillment objectives and Key Performance Indicators (KPIs) and reporting needs
- Engineer a shipping program that reduced costs and, at the same time, increased revenue
- Optimize logistics operations to directly align with the retailer’s current and future business objectives
- Provide ongoing auditing services to further reduce expenditures, mitigate risk and ensure compliance within the retailer’s business practices
- Achieve greater shipping data visibility to make continuous operational improvement recommendations based on customer and market demand
Working as an extension of the retailer’s team, Transportation Insight became its trusted business-to-business (B2B) operations partner. The Enterprise Logistics Provider then helped lead the retailer’s transition to a more focused, efficient service to its business-to-consumer (B2C) e-commerce platform. Through deep data analysis and diagnosis, Transportation Insight helped the client implement multi-modal integration and optimization that achieved the following results:
- Implemented improved inventory distribution strategy to utilize existing brick-and-mortar facilities as online order fulfillment centers and reduce both time in transit and shipping expense, while improving the customer service experience
- Performed cadence analysis to set optimal store replenishment schedules based on sales volume and realize labor cost reductions through improved restock strategies
- Improved customer service as a result of added insight into service failures and operational performance gaps
- Reduced parcel and freight billing errors through rigorous invoice audits
- Ensured smooth transition from B2B relationships to e-commerce operations by leveraging industry knowledge, understanding the carrier network and knowing the retailer’s prior metrics
- Optimized utilization of parcel and LTL, a critical factor in selling commercially versus direct to the consumer
- Identified opportunities to reduce accessorial costs by utilizing parcel service instead of LTL in locations without loading docks
- Established ideal carrier selection services based on the retailer’s shipping profile
- Worked with the retailer to build a more favorable shipping program, with an emphasis on residential discounts allowing the retailer to pass savings along to the consumer
With the help of Transportation Insight’s continuous improvement mindset and its ability to collect manage and analyze large amounts of supply chain data, the retailer has developed an optimized shipping program, a competitive market position and total transparency into the shipping data. As a result of Transportation Insight’s engineering and auditing expertise, the retailer has realized more than $9 million in average annual savings – more than $30 million overall. An intimate understanding of the retailer’s operations enabled Transportation Insight to transition the cost and service structure seamlessly to the retailer’s new corporate direction.