Transportation and Distribution Network Analysis

Client Success Story

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

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.
  • 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.