Streamlining Freight and Logistics
Our customer is a leading services company, looking to centralise and streamline their freight and logistics. They spend tens of millions of dollars each year on logistics, freight transportation and warehousing globally.
They used a wide range of services including warehousing, domestic package and parcel distribution, heavy haulage and international sea freight.
After being engaged to help centralise and streamline their logistics, we conducted an analysis of their costs and processes and identified specific areas for savings, opportunities to improve the visibility of goods in transit and ways to automate their processes.
The reduction in freight transportation costs and overheads was estimated to be in excess of $2m in year one.
Controlled tests were implemented via FreightDesk with minimal disruptions to ‘business as usual’ processes.
The trial generated over 30% in cost reductions for the period.
We are now rolling out FreightDesk to other parts of the organisation.
Fragmented Freight and Logistics Management
At the commencement of our engagement, our client had very strong logistics capabilities in certain areas, but there were no centralised processes or systems. Business unit negotiated rates and requirements on a case-by-case basis and they had contracted hundreds of suppliers. Very few were used in two or more areas of the business and there were large rate variances among suppliers for the same services.
SAP FICO was in use uniformly, but supplier management processes were complex and time-consuming. Some areas used SAP MM for inventory management.
We loaded all of the freight and logistics data needed for a detailed analysis into FreightDesk, including vendor invoices and rates. We were then able to benchmark freight and logistics costs in multiple geographies and identify strategies to reduce costs by over $2m by:
- Implementing a centralised freight management system,
- Consolidating suppliers across the organisation, and
- Optimising inbound and outbound logistics
Centralising Freight and Logistics
Over a period of four weeks, we implemented a trial version of the FreightDesk solution with ten users in a very low-risk area of the business. We monitored the costs incurred for the project versus the modelled ‘pre-implementation’ costs monthly. For the six months of the trial, the savings were in excess of 30%.
We are now in the process of rolling out the solution to the broader business.
Our client specialises in providing Logistics, Facilities Management and Construction services to the Resources, Infrastructure and Industrial sectors. They are in the process of developing a strategic Fourth Party Logistics (4PL) capability in parts of the business.