End to End Freight Management

Sector: FMCG - Major International Retailer of Consumer Electronics

Executive Summary

With continued growth of our clients retailing and distribution operations across Central & Eastern Europe, it became essential to partner with a logistics provider that could deliver consistent freight management practices for all shipments of their directly sourced product, from around the world.

It was paramount that the solution provided transparency across key milestones, in order to not only manage the effective flow of shipments at a day to day level, but also report on the key issues that could lead to incremental supply chain costs.

Success was to be measured by achieving a step change in both the operational platform & service performance, without an increase in the cost base. Complete visibility & tactical control from purchase order to delivery, across all operating countries, was also a key factor.

Client Challenge

Devise a series of objective selection criteria, to identify 3PL’s with capability best aligned to our client’s strategy. Develop an open market tender process.

The end to end process from tender to full operation was scheduled to take just over three months, with the implementation phase being just eight weeks.

Our Solution

Eight global 3PL’s were invited to submit their proposals within a tight three week period. The submission process included a further questions stage, lasting only the first week of the tender time-line.

The proposal document was tem plated to allow responses to be easily compared and contrasted.

Of the eight 3PL’s invited to tender three were short listed in the first week after the closing date. The short listed companies where invited back in the fifth week of the overall time line to present their solution to include; the implementation plan and proposed start & end date. It also provided an opportunity for key account personnel to meet operational and senior stake-holders of our client.

From these presentations the successful company was chosen and informed in the sixth week of the tender process.

The agreed solution process map consisted of the following key stages:

• The Implementation Project plan & Manager
• Key work-streams and leaders; Systems, Operations, Customs & Administration, Standard Operating Procedures
• Country Origin & Destination Reports, Scorecard / Dashboard & Key Performance Indicator development
• Weekly progress meetings (WPM’s) with work-stream leaders and stake-holders
• Issues log graded for high, medium or low impact, and reviewed at WPM’s, until resolved
• Vendor education seminars held at all origins, prior to “go live” date
• Destination education visits to all receiving countries, prior to shipment arrival
• Cut-over management and control from previous to new 3PL
• Weekly executive summary of all shipments and issues reported to up & downstream customers

Outcomes

• Transparency of all pre shipment port charges at origin – visibility for Vendors selling price (FOB – Free On Board)
• Accurate three month shipping forecast analysed by month, by Origin and by Destination
• Introduction of pre shipment advice stage allowing control over under utilised containers
• Introduction of consolidation of LCL (less than container load) shipments, by country – saving US$250,000 in first four months of start-up
• Allowing pre booking of all containerised shipments into Distribution Centres (DC’s) resulting in an 88% reduction in ‘on port’ demurrage charges at destination ports
• Proactive notification of late or inaccurate import documentation which had previously led to delays in Customs clearances
• Central control and payment of all freight invoices and landside charges
• Total accountability & real time visibility of the extended supply chain
• Fewer management hours spent administering shipments, allowing management by exception and the identification of emerging trends and vendor compliance issues.

This solution allowed our client to double it’s shipment volume with incremental direct sourcing, including Branded products purchased on a factory gate basis from it’s key volume branded vendor base. The solution also enabled the client to pursue its strategy of direct sourcing of branded products.