$1M saved by testing fulfillment against the parent company's own network

Vendor & TMS Selection Truckload and LTL Consumer electronics
Carriers:
Network study, not carrier specific
60bba76173ead6f05eedf763ced084174d1a7d5a

WHO

Business model

A successful electronics company purchased by Amazon, whose old network and partners still existed after significant growth. Ships mostly FTL and LTL freight.

Industry

Consumer electronics, direct to customer, where half a day of delivery speed is a competitive difference.

PROBLEM

What they felt

The easy thing to do was to utilize Amazon's fulfillment and transportation services, but they wanted to see if another option was more suitable and economical.

What we found

Data was spotty and inconsistent.

  • High rates across the network
  • Over reliance on brokers
  • Little ingenuity in utilizing different methods to bring value and savings
  • Freight bill auditing done occasionally, and usually only on very large claims
  • No shipment-level visibility to support the delivery appointments

Aggregate numbers were accurate, but with very little detail. Then there were qualifying candidate third-party fulfillment partners that can deliver on what they sell.

WHAT WE DID

Prep and analysis

We looked past the price to what each 3PL actually runs. Older material handling equipment, out of date interconnectivity and out of date software all show up later as cost, and few fulfillment partners refresh those areas yearly. We ran a comprehensive cost and service analysis for each option and compared it against benchmarks.

Execution

We built the client a shortlist rather than a single recommendation. The best partner does not always have capacity in the optimal center, and many buyers assume service and transportation costs stay the same across locations, which is not true. Many potential 3PLs were eliminated because they did not have capacity in the desired locations or expertise in FTL and LTL. Others struggled with new technology and systems. Several still had manual operations, inhibiting flexibility and speed to deliver.

We built the baseline nobody would give us

The parent company was not going to hand over the detail, so we reconstructed it from what was available and validated it before a single provider was approached. Without that, every quote would have been compared against a number nobody trusted.

RESULTS

What they got

Over $1,000,000 saved, and delivery half a day faster

Comprehensive cost and service analysis, and broadening the net of potential providers, delivered over $1,000,000 in savings with an enhancement in service of 0.5 days faster.

They also got:

  • Faster delivery to customers
  • Lower total costsGreater flexibility
  • Enhanced operational visibility
  • Optimized transportation

How long it took

Completed over 4 months

How much are you leaving on the table?

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