Client Profile
A family-owned global food company that produces baking goods, dessert mixes, pizzas and food service products in 40 countries globally.
Overview
After acquiring a competitor’s North American frozen pizza business, along with its production facilities in Atlantic Canada and New Jersey, the global food company sought to optimize its newly expanded transportation network. By partnering with Transplace, the company was able to gain greater visibility into its transportation operations and spend in order to establish pre- and post-acquisition network baselines and effectively implement a more efficient and cost-effective warehousing and shipping strategy.
Opportunity
After acquiring the North American pizza business, the global food company needed to examine its expanded supply chain – which now included customer locations across Canada along with a production facility in Eastern Canada – and identify opportunities to drive financial and operational efficiencies.
Solution
To achieve the optimization benefits it desired in the midst of a large supply chain transformation, the global food company needed a partner with deep industry expertise and transportation management capabilities to enhance network visibility and implement an effective solution that would deliver meaningful results. The company selected Transplace because of its understanding of the Canadian market and proven ability to execute.
Transplace worked collaboratively to map out the company’s pre-acquisition business, incorporating transportation and warehousing costs and other factors. They then developed a post-acquisition baseline by combining the company's pre-acquisition network with its expanded network, which included sourcing points in Eastern and Central Canada along with inbound shipments from Germany.
Establishing this future-state baseline enabled Transplace to develop a strategic plan for bringing people, process and technology together to increase operational efficiency and maximize financial savings. This plan included eliminating a warehouse in Western Canada and converting warehouses into merging centers, where they would consolidate shipments from various sources throughout Canada, as well as overseas, into full load and less-than-truckload (LTL) shipments delivering to customer locations. As part of this new approach, the merging centers would not carry more than seven days of inventory stock at any one time, compared to the 20 to 25 days of stock on hand at individual facilities previously, thus reducing inventory costs.
This merging center approach required a change in the ordering process, specifically designating certain days when customers could place orders based on their location. Establishing a dedicated shipping schedule brought consistency to the company's operations – reducing lead times, allowing them to successfully carry less inventory at its facilities and improving overall level of service. This also allowed Transplace to build dynamically-routed, multi-stop loads and significantly reduce the number of LTL shipments.
Key to the implementation of this new process was the clear communication with the company's retail customers to educate them about the new ordering process and explain why these changes were being made. Additionally, to ensure ongoing success and drive continuous improvement, Transplace began tracking weekly, monthly and quarterly reporting.
Results
By partnering with Transplace to optimize its transportation network, the global food company was able to gain a clear understanding of its pre- and post-acquisition business operations and develop a project and implementation plan that led to significant cost and efficiency gains, including:
Operational Excellence
- Optimized network – By establishing a post- acquisition baseline, Transplace was then able to remodel its supply chain network and establish merging centers in order to drive efficiency and reduce transportation and warehousing costs.
- Smarter scheduling – Establishing a defined schedule for customer orders and deliveries helped bring consistency to shipping operations while allowing them to utilize dynamically-routed, multi- stop loads and address the geographical challenges of shipping in Canada.
Financial Performance
- Reduced transportation costs by 7% –By consolidating freight, reducing inventory stored at forward warehouses and implementing a shipping schedule with dynamic load building, the company was able to achieve cost savings of more than 7%.
Confidence and Peace of Mind
- Process consistency – By establishing consistent order and delivery processes, the company was able to reduce lead times and deliver higher service levels to its customers.
- Continuous improvement – With an in-depth understanding of the company's operations and access to key metrics, Transplace is able to continuously identify new cost-saving opportunities and efficiency improvements.
According to the global food company, “By partnering with Transplace, we were able to gain much greater insight into our business operations, revolutionize our transportation network and develop a well-choreographed plan for implementation. Transplace’s role as a strategic partner continues to grow as we move forward and explore additional opportunities to drive further operational efficiency and improve financial performance."