Situation
A major manufacturer had a suboptimal, two-plant network with an excessive number of miles on supplier routes. Transfreight's challenge was to reduce the mileage as part of optimizing the network to produce the lowest total logistics cost for the customer.
Solution
In a three-phase initiative designed to optimize the network within a six-month period, Transfreight combined routes and used its consolidation facilities, e.g., its Dayton Logistics Center (DLC), to reduce the total mileage and reduce inventory carrying costs. Key steps in that process included:
• Identifying commonalities in the supplier base to take advantage of integrated route opportunities
• Demonstrating cost savings and the positive potential of resource consolidation to the customer
• Efficiently designing routes based on maximized efficiency and added value
• Increasing frequencies and leveling orders
• Enabling customer to reduce leases on warehouse space, minimizing inventory
• Allowing crossdock inventory visibility and tracking through Transfreight website
• Reducing LTL by picking up suppliers on milk runs
• Monitoring and maintaining route integrity with the integrated model
• Executing integrated design requirements
• Standardizing scheduling to balance the workforce and workload align with inventory
Results
Transfreight’s solution, which significantly reduced mileage by combining two plants' suboptimal TL routing and LTL networks, creatively used our scope approach and optimization expertise, resulting in a satisfied customer and these specific results:
• provided the customer with an immediate 26% reduction in total mileage (comparing TL to TL) and 22% in transportation savings—one key step in helping the customer realize total annual transportation savings (on these and other routes) of more than 7% compared to their previous 3PL
• delivered significant cost savings through other crossdocking benefits, including reducing the large amounts of warehouse lease space and increasing efficiencies at the plant by creating a balanced receiving schedule with multiple deliveries per day of the same product.