The size-of-prize in transport development is often massive. It also has the added benefit of being highly tangible….greater DIFOT (Delivered In Full On Time) at a lower cost per case.
The reason that there is so much upside in transport is that service buyers usually buy on cost-per-case. They are rarely equipped to take on a holistic approach and understand the impact of:
- Product configuration
- Throughput volatility
- Vehicle sourcing and configuration
- Order processing and planning
- Origin and destination interfaces
- Routing and scheduling
Every transport project that LCA has undertaken during the last 5 years has resulted in an annual cost reduction of between 15% and 37%.
A leading FMCG manufacturer in Malaysia.
The client believed that their transport spend was higher than it should be – especially as they are a large scale buyer.
LCA spent two months comprehending transport operations, measuring performance and then designing a new approach.
We then spent a full year with the client, working with their people to change practices and to restructure the relationship with a raft of transport providers.
The overall thrust was to permit the client and their transport providers to:
- Operate the largest possible vehicles
- Achieve a high rate of fill (including backhaul)
- Keep the wheels rolling continuously (24/7)
These changes led to a 30% reduction in transport spend in the calendar year following the exercise.
Further savings (25% on applicable routes) were achieved the following year by the introduction of high-cube trailers.
- Financial benefits were sustainable
- Service levels were enhanced
- Transporter margins were protected
- Transport regulations were adhered to
- Corporate health and safety regulations were met.
The client received a national award for environmental benefits (primary for reduced diesel usage) and a transporter won a national award for innovation due to the introduction of high-cube trailers.