Business Case: Freight Cost Optimization
Customer Benefits
- Independent Freight Management System as SaaS solution with a short implementation time
- One-Click approval process after invoice checking
- Easy Claim Management via email process
- Complex rates are simplified accurately and transparently
- Administration of all contacts, rates and responsible persons
Measurable benefits in numbers
Business Case: Utilization Optimization
Ø-Utilization project start
Ø-Utilization after the project
Status-quo situation
- Many trucks shipped from factory to factory are under-utilized
- The average utilization of the intercompany transports is just over 60% and thus clearly in the red range
- Reasons could be retrieval of high/low order quantities, inaccurate forecast of finished quantities at the delivery date, etc.
Process
- Analysis of the utilization of the most frequent intercompany traffics
- Analysis of the product mix of the individual routes(different products, for example steel vs. light goods, require different target values)
- Analysis of the reasons for low utilization and deduction of actions for improvements
- Definition of target values and implementation of improvement actions
- Continuous measurement and monitoring of utilization development including corrective actions
Measurable benefits in numbers
- Utilization improved by 4 tonnes (+ 18%) from an average of 14 tons to 18 tons
- The number of full loads decreased allthough the total tonnage increased during the by 15%
- CO2 emissions could be reduced by over 15,000 tons
Business Case: RFQ-Support
Setup before the RFQ
The logistics network is designed for local distribution due to historical reasons. The delivery to the end customer is done from the respective production country. Cross-border transports are only used in intercompany traffic to warehouses and production sites. As a result, the routing is not distance and cost optimized. A change of the routing and allowance of cross-border supply of the customer can demonstrably generate significant savings.
Setup after the RFQ
In addition to cost reductions, the aim of the tenders is to optimize the logistics network. The customer collected, next to domestic rates, also rates for other countries in the European tenders. For example rates from northern Spain to southern France are requested. As part of the RFQ support, scenarios with alternative routings are calculated in the simulation. The calculation revealed potential savings of more than 10% for cross-border supply of the end customers.
Measurable benefits in numbers
- 8% freight cost reduction through optimized routing
- 5% reduction of freight rates by negotiation and standardized rate structure
- Optimizing the logistics network and reducing ton-kilometers and CO2 emissions
