Global Study on Logistics & Strategic Sourcing

Growing transportation expenses driven by the needs of a more service-focused customer audience.

The LVP team collected and examined the client’s supply base alongside existing transportation expenses. They discovered potential cost-saving areas and pinpointed several technical and organizational challenges hindering efficient performance.

• Held interviews with cross-functional teams in transportation and facilities management, gathering comprehensive data to benchmark costs.
• Spotted opportunities to collaborate with the supply base and railroads to enhance efficiency for incoming raw materials.
• Revealed management shortcomings in information access, freight audits and payment procedures, as well as transportation management sourcing and processes.
• Developed skill-focused training, a project plan, and timeline aimed at achieving savings.
• Conducted a thorough end-to-end supply chain analysis to outline the current network status.

To capitalize on cost-saving opportunities, LVP launched a strategic sourcing initiative focused on five key transportation categories: truckload, LTL, intermodal, small package, and rail.

• Defined data needs and addressed issues related to transportation provider negotiations.
• Reorganized the transportation department’s structure and provided guidance on job roles and qualifications.
• Equipped client teams with negotiation training to maintain long-term improvements.
• Questioned current trailer specifications to broaden the truckload supply base, resulting in further savings.
• Utilizing the CPLEX analysis tool, VMG created an optimal yet practical network design featuring hub-and-spoke models.

Cost reductions were accomplished by narrowing the client’s carrier base and enhancing the oversight of transportation service providers. These savings will continue thanks to a revamped organizational structure that has heightened management’s focus on transportation matters.

• Achieved savings exceeding $20 million
• Cut carrier base by 60%
• Implemented clear metrics for assessing external carrier performance
• Optimized processes for load tendering, shipment tracking, invoicing, payments, and audits
• Reorganized the national LTL program to leverage regional providers, resulting in over 30% savings
• Network optimization generated close to $5 million in cost savings