Case Study: Short term Cost Reduction in Logistics

The Clients trusted long-term relationship with its accustomed warehouse operator and transport partner at HQ production site resulted in no real re-tendering and negotiations over the years.

Consequently, this has given rise to multiple production sites with independently functioning logistics operations, leading to a state of disarray in coordinating customer shipments.

The utilization of multiple transport partners across diverse production sites, coupled with the involvement of several external warehouses, has introduced a heightened level of complexity, unwarranted redundancy, and a multitude of disparate tariff structures. On top of that, the Main Logistics Partner overseeing both transportation and warehouse operations asked for tariff increase citing inflation and other pertinent factors.

Furthermore, the client has neglected any emphasis on the CO2 footprint in their logistics operations, indicating an oversight in addressing environmental sustainability. But the most pressing issue: our client faced significant quality problems in Warehouse Operations caused by their chosen 3^rd Party Logistics Provider.

Achieving the optimal consolidation of customer shipments has yielded substantial reductions in both transportation costs and CO2 emissions. By centralizing and consolidating logistic activities in both central and external DCs, logistics cost savings of an astonishing 19% have been realized, accompanied by a welcomed reduction in overall operational complexity and warehouse partners.

The strategic decision to insource Warehouse Operations has proven to be a triple win, effectively curbing costs, simplifying processes, and mitigating customer complaints. This move not only contributes to heightened customer service standards but also enhances operational flexibility, underscoring a commitment to efficiency and excellence in service delivery.