Client Profile
Transplace manages $55.6 million in freight spend and 30,000 shipments annually for an automotive replacement parts and accessories retailer and distributor in North America.
Overview
In order to achieve greater control over its supply chain, the retailer expanded its longstanding partnership with Transplace to include managing all inbound vendor shipments to the retailer’s eight distribution centers (DC) nationwide. By leveraging an inbound shipment program, the customer has been able to improve operational efficiency and realize significant cost savings.
Opportunity
For more than 20 years, Transplace has provided the auto parts retailer with transportation management services and logistics technology. Built on a foundation of trust and integrity, the partnership has continued to evolve and has led to significant operational and financial benefits.
With heavy volume of shipments going into the retailer’s facilities, there was tremendous opportunity to optimize inbound shipment costs and better manage vendor relationships using the Transplace Transportation Management System (TMS) they already had in place.
Solution
Building on its successful, long-standing relationship, Transplace was able to help the retailer establish a vendor shipment program that allows the retailer to take control of planning and executing inbound shipments from vendors using Transplace's TMS.
As part of this voluntary program, the retailer develops a profile for each participating vendor based on their annual shipment volume. Using business intelligence (BI) tools, Transplace examines the projected inbound shipments and runs an analysis to estimate the annual freight spend and identify further savings opportunities. The insight gained from this analysis is used to help with rate negotiations during procurement events – both annually and in the spot market.
In order to realize additional and immediate cost savings and further improve operational efficiency, Transplace converted carrier invoicing from “prepaid” to “collect” for all inbound shipments and consolidated loads by leveraging cross-docking capabilities through out a network of truck and rail lines between the customer’s distribution centers and retail locations.
Results
Expanding the partnership to have Transplace manage the retailer’s inbound shipments has led to significant operational and cost savings improvements.
Operational Excellence
- Greater control over inbound shipments – By allowing Transplace to manage inbound shipments, the retailer was able to have greater control over its supply chain and which carriers and lanes were used.
- Improved transit time – By consolidating loads from multiple vendors and leveraging cross-docking capabilities, transit time was improved, carrier costs were reduced, and there was significantly less congestion at the retailer’s docks.
- Increased supply chain visibility – Leveraging Transplace’s logistics technology along with its reporting and analytics capabilities increase overall visibility of the retailer’s network and transportation spend. The retailer is now consistently able to see total costs by lane, location and carrier, and identify opportunities for continual improvement.
Financial Performance
- Realized $2.1 million in annual bid savings – Having greater visibility of its network and being able to benchmark competitive rates, the retailer was able to achieve significant savings during procurement events.
- Significant overall cost savings – The retailer was able to realize significant savings by moving vendors from pre-paid to collect invoicing/billing system from their carriers. Additionally, by switching to collect, carriers are designated for shipping charges to be billed at the negotiated rate.
Confidence and Peace of Mind
- 98% on-time pick-up and delivery rate – Since assuming control of inbound shipments, the customer has consistently had a 98% performance rate for on-time pick-up and delivery.
- Stronger carrier relationships – With greater insight into carrier performance, each carrier is rated on their successful loads within each lane, and are rewarded when carriers meet and exceed expectations.
According to the retailer, “Since the beginning, Transplace has been able to successfully implement industry best practices that drive operational efficiencies and cost savings. The relationship has evolved from simply tactical execution to a true strategic partnership, which is evident by expanding Transplace’s role to including managing our vendor inbound shipment program. Transplace’s commitment to operational excellence and continuous improvement is what makes our long-standing partnership work.”