Rock Ledge Resources > Bill Driscoll > Representative Project - Transportation and Cost Alignment

Transportation System and Cost Alignment

Business Challenge

A $200 million food processor was supplying both fresh green product and refrigerated salads to the grocery and restaurant community. Its purchasing group had a standardized methodology for buying and transporting ingredients from various types of suppliers. When the processor acquired a new company and established it as a separate division, it inherited an unsophisticated transportation procurement process and control system. The new division offered more "made to order" product than the rest of the company and used a private fleet for part of its delivery system, making it difficult to integrate it into the company's logistical operations. The company decided to assess the new division's competencies and determine what improvements could be made.

Solution

A Rock Ledge Resources principal conducted an assessment of the division's transportation operations and costs, and was also able to identify not only transportation improvements, but also warehouse and IT system changes that could impact costs. It became immediately clear that new division could not accurately monitor costs. It was not accumulating costs uniformly, for either private fleet or purchased transportation, and the warehouse and carrier partner's data were incomplete and inaccurate, contributing to performance and cost deficiencies.

Results

Because he was quick to spot IT issues, the principal implemented IT changes, including a new basic bill of lading, to immediately improve customer performance. A warehouse RFP was generated and a new warehouse vendor selected. The new vendor provided the company with more timely and accurate information regarding inventory and outbound shipments. A recommendation was made to eliminate the private fleet, saving over $250,000 annually. A transportation RFP was generated and implemented, saving another $300,000. Internally, 12 logistical processes were defined and documented, with separate recommendations made that could save the company another $200,000 in shipping and warehouse coordination costs.

Relationships: Bill Driscoll | Operational Excellence | Manufacturing