Distributor outsources risk, enjoys huge benefits
Key players from Cedric Millar Integrated Solutions worked with a hard goods distributor to double proposed cost savings and provide 95% on-time delivery. It’s proof that the strategic, data-driven services of a true 4PL partner can move a customer from shipping air to breathing easy.
The customer
A distributor of hard goods delivering to a network of 4,000 independent dealers across Canada.
The financial picture
Transportation costs were 14% of annual revenue and rising. Dealers covered only 7%, with no tolerance for increases.
The ask
Reduce costs and improve service levels, if possible, within a 6-month rollout. Keep current carrier.
The proposal
10% decrease in transportation costs.
The contract
Guaranteed cost savings and delivery standards or the customer could say
goodbye without penalty.
The results
20% decrease in transportation costs. 95% on-time delivery.
The details
The customer had two key problems: data and dealers. On the data side, the customer’s ERP wasn’t freight-friendly, so there was no visibility into transportation costs. There was no strategic supply chain expertise either in-house or at the 2PL carrier doing the deliveries, either.
On the dealer side, there was no tolerance for increased delivery charges and high delivery expectations in terms of frequency, timing, condition and diversity of product ordered. Ordering had large seasonal swings.
BEFORE
“Shipping air”
AFTER
“Breathing easy”
CUSTOMER BENEFITS
THE PROCESS
STEP 1
Research and refinement
4 months
On-site observations at distribution centre and cross-docks
Dealer survey
Interviewed key people at customer
RFQ for carriers
Network refinement
Recommended changes at carriers and customer to increase efficiency
STEP 2
Rollout
4 months
Month 1: Launched in Ontario
Month 2: Launched in western Canada
Months 3 and 4: Launched in Quebec and eastern Canada (not part of original contract)