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case study Consolidation Efforts Lead to Significant Cost Savings for Leading Automotive Manufacturer

Client Profile

A supplier of power transmission components to the automotive industry.

Overview

By partnering with Transplace to consolidate LTL shipments from vendors located throughout the Midwest into full truckloads (TL), a supplier of power transmission components was able to improve network visibility, better manage inbound shipments and achieve significant cost savings.

Opportunity

As a supplier to the automotive industry with a strong presence in Mexico, the company received a large number of LTL shipments in Laredo, TX from vendors and other internal facilities located throughout the Midwest. The company recognized the opportunity to convert LTL shipments to full truckload (TL) but lacked the visibility and control to design and execute a standardized consolidation program.

Solution

The manufacturer selected Transplace to help implement a vendor consolidation program because of Transplace's optimization and consolidation capabilities, experience in cross-border and intra-Mexico shipping and strong logistics technology.

After analyzing the manufacturer’s vendors’ locations, freight volumes, weight and dimensions, Transplace identified Indianapolis, IN as the ideal location for establishing a consolidation center. Transplace then worked to identify the right carrier partner based on variables such as experience, solution offering, pricing, technology, customer service level and concentration of the market.

On-time delivery was critical, so Transplace worked closely with the manufacturer, its suppliers and the carrier to ensure the consolidation efforts and the sharing of information was smooth and on-time. To promote success, Transplace established a standard process and timetable for handling each shipment. Transplace would schedule the shipment one week in advance then contact each shipper to confirm the details and coordinate the pick-up. Vendor shipments would then go to the Indianapolis consolidation center where Transplace would combine them into full TL and send them to Transplace’s Laredo facility for customs clearance before going on to customer locations throughout Mexico.

By having Transplace also serve as the customs broker, the manufacturer was able to have a single point of contact for its consolidation, cross-border and intra-Mexico shipping efforts. Leveraging Transplace’s transportation management system (TMS) and customs portal increased visibility and control over the entire process, and helped ensure the program followed a standardized process and schedule.

After experiencing success with the initial consolidated shipments, the company’s efforts have grown significantly. Realizing the operational and financial benefits, Transplace and the manufacturer are opening a second consolidation center in the Southeast. They have also started working on multi-shipper consolidation at the Indianapolis consolidation center to take advantage of even greater cost savings opportunities.

Results

Partnering with Transplace to consolidate LTL shipments has led to significant operational improvements and cost savings, including:

Operational Excellence

  • Consolidated 91% of the weight shipped to Laredo – By establishing a pool consolidation point in Indianapolis, the manufacturer was able to consolidate 91% of the weight being shipped to Laredo into full truckloads.
  • Increased shipment and network visibility –Transplace’s TMS and reporting capabilities helped the manufacturer increase visibility of its network and better track shipments. Daily reporting provided greater transparency and intelligence around shipment status and overall performance.
  • Consistent processes and shipping schedule –Establishing standardized processes for vendor shipments into the pool center enabled the manufacturer to maintain a consistent weekly schedule –reducing the number of expedited moves needed –and maintain a high level of on-time service.
  • Reduced shipment damages – By having more control over shipments and fewer touchpoints, the company was able to reduce the amount of damage to its freight.

Financial Performance

  • Realized cost savings by consolidating LTL shipments – By strategically consolidating LTL shipments to TL, the manufacturer was able to significantly reduce its transportation costs. Additional savings is expected from multi-shipper consolidation efforts.
  • Competitive, technology-controlled pricing –Utilizing Transplace’s logistics technology allowed the manufacturer to streamline its transportation activities and achieve market competitive rates.

Confidence and Peace of Mind

  • Established certainty in supply chain – By increasing visibility and establishing greater control over its shipments to Mexico, the company was able to establish a seamless consolidation program and have peace of mind about its supply chain performance and service to its customers.
According to the manufacturer, “Transplace was able to develop a strategic, customized solution that met our specific needs then successfully implement and execute the program and have it deliver meaningful financial and operational results. The combination of Transplace’s industry expertise and logistics technology has given us greater visibility and control over our shipments than we had before.”

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