Transportation and Distribution Network Analysis
The transportation and distribution analysis helped the global manufacturer stream operations and significantly cut costs.
- 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.
- 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).
- A detailed transportation analysis of the shipment profile revealed significant opportunity to reduce LTL freight costs and improve operational efficiencies.
- 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.