Case Study: Transportation and Distribution Network Analysis

Challenge

• A global manufacturer and supplier of alternators and starter motors to niche markets for heavy-duty (trucks, bus, emergency, off-road) military and industrial applications was in need of new ways to maximize their distribution network analysis.
• To maintain a competitive edge, optimize distribution costs and enhance customer service levels, the worldwide corporation needed to perform a strategic distribution network and transportation assessment with the focus on distribution facility consolidation or relocation and streamlining of DC operations.

Tompkins' Role

• Phase I: Evaluated the relocation of the DC either to the same site as the manufacturing plant or to other probable locations using network analysis tools. Created a strategic cost-benefit analysis. Some focus areas were:
  • Benchmark total LTL freight spend with largest LTL carrier
  • Service and cost impact of utilizing non-contract carriers
  • Impact of month-end peak shipping period on carrier selection and freight cost
  • Shipping policy analysis
  • Analysis of freight spend by weight break, mode and carrier
  • Carrier performance, rate and service contract adherence
• Phase II: Facilitated an LTL freight bid and a Warehouse Strategic Master Plan (WSMP).

The Results

• A detailed transportation analysis of the shipment profile revealed significant opportunity to reduce LTL freight costs and improve operational efficiencies.

• The transportation and distribution analysis helped the global manufacturer streamline operations and significantly cut costs.

  Phase I revealed ample opportunity to improve order fill rate, optimize inventory levels, enhance existing DC capacity and layout and cultivate productivity measures.
• A practical routing guide was developed with a balanced mix of national and regional carriers.
• The projected savings were approximately 18% in LTL freight cost alone.
• The solution allowed for management of fewer carriers and a consistent focus of all supply chain partners on contractual performance measurement and continuous improvement.
  

More Tompkins Associates Resources:

• Transportation Services
• Distribution Network Design