An operations audit that led to $15M in annual savings and 18% cost compression

Transportation Operations Audit Multi-mode Industrial manufacturing
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WHO

Business model

A multi-billion dollar developer of testing equipment that ships all modes of transportation globally, including radiologic material.

Industry

Industrial manufacturing, with a regulated freight profile. Shipping radiologic material narrows the carrier pool and raises the cost of getting the paperwork wrong.

PROBLEM

What they felt

They needed someone to review how they do what they do and correct any misalignments with carriers, pricing and service. The transportation operation had not been reviewed in years, and the client didn't know if their rates were competitive, carrier alignment was appropriate, or technology suitable for their needs.

What we found

As with many projects, data is difficult to obtain. This was no exception.

  • With this data we found:Rates were stale and not market competitive in all modes
  • Records were kept on paper and in spreadsheets, with no technology solution
  • Track and trace consisted of calling the carrier for an update on a shipment, and accuracy was less than acceptable
  • The freight auditing solution only addressed parcel, and did little in retrieving errors and identifying late shipments

WHAT WE DID

Prep and analysis

A three month process, which included extensive data capture and validation, comprehensive discovery interviews with stakeholders, and a thorough understanding of the current operation and vendors. Key targets were: carrier base change; rate improvement; operational optimization; and process improvements.

Execution

We tendered RFPs for ocean, air, full truckload, less-than-truckload, last mile, parcel, transportation management systems and freight auditing. We reviewed shipment processing, which led to a comprehensive RFP for a transportation management system, justified in less than 8 months. We introduced a comprehensive RFP establishing a multi-modal freight auditing and payment partner.

Carried through to the new network

The RFP projects secured transportation companies aligned with the freight, lanes and modes, and delivered technology solutions to assist with easy, reliable tracking of the freight. The result was a best-in-class transportation network, with lower cost, greater visibility, and carriers matched to the lanes that best suited their capabilities.

RESULTS

What they got

Savings in excess of $15,000,000 annually, at 18% cost compression

The RFP projects that followed the audit generated savings in excess of $15,000,000 annually, with cost compression of 18%.

They also came out with technology where there had been paper and spreadsheets, reliable track and trace where there had been phone calls, a multi-modal freight audit partner where parcel-only auditing had been missing errors, and a TMS business case that justified itself in under eight months.

How long it took

Three months of discovery and validation, then the RFP projects that followed. The TMS was justified in less than 8 months.

How much are you leaving on the table?

Get an instant calculation of your savings potential. Based on the database of carrier contracts we have audited and negotiated for 600+ clients since 1997, and on current benchmark data showing what companies with your profile pay today.

Ready to get started?

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