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.
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.
Reduce costs and improve service levels, if possible, within a 6-month rollout. Keep current carrier.
10% decrease in transportation costs.
Guaranteed cost savings and delivery standards or the customer could say
goodbye without penalty.
20% decrease in transportation costs. 95% on-time delivery.
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.
Research and refinement
On-site observations at distribution centre and cross-docks
Interviewed key people at customer
RFQ for carriers
Recommended changes at carriers and customer to increase efficiency
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)